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Sequester Replacement Reconciliation Act of 2012

Floor Speech

By:
Date:
Location: Washington, DC

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Ms. JACKSON LEE of Texas. Mr. Speaker, I thank the ranking member, and I thank the ranking member of the full Judiciary Committee, Mr. Conyers, who worked extensively to bring reason to this discussion.

I must remind my colleagues that this is a debate that is, of course, necessary, but it is not going anywhere. This is in essence to respond to the potential and pending sequestration and the deadlock of the committee, but the deadlock of the committee gave us an opportunity to work in a bipartisan manner.

My good friend who just spoke on the other side of the aisle talked about abundance and prosperity and talked about welfare. What I would say to the gentleman is that we're not talking about welfare. We're talking about investment in people, and we're talking about not having a siege upon our children.

On April 25, 2012, we were back in the Judiciary Committee again looking at medical malpractice for the umpteenth time. I wondered why we were there. It was because each committee was told to find a way to find money. So the directions of the Republicans for the Judiciary Committee were to oppress the sick and to be able to cap medical malpractice insurance on innocent victims such as women and children and the elderly when

the medical system fails us as it relates to medical devices and other elements.

We were told to eliminate for the children of America by limiting noneconomic damages, restricting punitive damages, limiting access to courts for poor victims of medical malpractice, shortening the statute of limitations for claims, eliminating the protections of children, and prohibiting joint and several liability. We were simply told to shut the courthouse door for children that needed to be able to have the opportunity to have their lives saved, just like a little boy who needed surgery in a hospital in San Antonio. They told the family it was a serious surgery and they needed to have a cardiologist on staff. He went into surgery, and, of course, things went wrong. There was no cardiologist there; there was a mishap; there was a fault; and that little boy died. They want to deny that poor family access to the courthouse. That is what that bill does.

When my friends begin to talk about what else it does, it cuts SNAP, the nutrition program. It cuts Medicaid.

Mr. Speaker, what I would say is that this bill is a siege on children. We should oppose it. It is not reconciliation. It is oppression. I would ask us to vote against it.

Mr. Speaker, I rise today in strong opposition to H.R. 5652, the ``Sequester Replacement Reconciliation Act of 2012'' This piece of legislation should really be entitled the ``Ryan's Replacement Sequester to Thwart the Bipartisan Budget Control Act of 2012''

Whatever anyone wants to entitle this measure, one thing will still remain true ..... this legislation is unfair. It literally takes money out of programs dedicated to serving low income families, children, seniors, the disabled, the most in need of our assistance. Why isn't the funding coming from war savings. There has been a consistent attack on the other side of the aisle on programs that are proven to be affective at combating the stresses associated with poverty, aging, and long term care. Before us is a measure that is a wolf in sheep's clothing.

In my lifetime, I have never seen such a concerted effort to ransom the American economy in order to extort the American public. While I support bipartisan efforts to decrease the debt and to resolve our differences over budgetary revenue and spending issues, I cannot support a bill that unduly robs average Americans of their economic security and ability to provide for their families while constraining the ability of Congress to deal effectively with America's economic, fiscal, and job creation troubles.

My colleagues on the other side of the aisle are trying to give the American people the impression that their sentimental and unbridled concern for the military means that it is necessary to take an ax to programs for seniors and low income that is not something that our military would be proud to be connected too. Why not use, instead, war savings and a small finite tax on income over $1 million dollars.

This unbalanced bill modifies last year's bipartisan Budget Control Act to cancel the sequestration of discretionary spending currently scheduled to occur in January 2013 in order to prevent cuts to defense. That is fine but Republicans have already voted twice this year to pass their budget to end the Medicare guarantee and increase costs for seniors while giving massive tax breaks to the wealthiest Americans.

While the U.S. economy is healing, the world economy continues to be in a fragile state and all economies are linked through trade and finance. In this environment, this bill sends the economy downward. However, over the last few years the economy has been steadily growing. We are not where the American people should be but the economy has gained jobs.

According to Secretary Solis she stated ``know where our nation's unemployment rate stands. I have to report it every month. But we've now added private sector jobs to our economy for 26 months running. Since President Obama took office, we've created 4.2 million new jobs. That's no small potatoes when you consider we were bleeding 750,000 jobs a month when this President took office. I know we've got a lot more to do. But we're making progress.'' During this time of progress, this is no time to cut the social safety net for those still unemployed--no time to cut food stamps, medicaid, or medicare.

The President signed the Recovery Act which invested in mass transit, roads, and bridges to build critical infrastructure and secure construction jobs. The Recovery Act also included strong Davis-Bacon and Buy American provisions, to stimulate local economies and create high-quality jobs. In total, the Recovery Act supported up to 3.5 million jobs through the end of 2010.

It is essential that we allocate the money spent on previous wars to programs to help expand opportunities for the American people.

Mr. Speaker, if you asked the typical American family what they would need to do to balance their family budget, they would respond: spend less. But they would also be quick to acknowledge that without a job, or in the case of the federal budget, tax revenue, the budget will never balance. It is critical to address both sides of the ledger. It is also imperative for the Republicans to place the President's jobs bill on the agenda to vote on and pass.

Sure, save money but cutting benefits but without additional revenue, the budget is doomed. Moreover, you surely would not find any family in Texas that would suggest buying luxury items, while struggling to balance the family budget is a sensible approach. But Republicans insist on advocating for tax breaks for the wealthy--the luxury class.

ECONOMISTS

Economists have long pointed to investments in ``human capital''--the productive capability that is embedded in people--as one of the most important determinants of economic growth. A large and growing body of literature has examined the returns to investments in human capital from both a societal and individual perspective.

In his book, Dangerous Half-Truths & Total Nonsense, Pfeffer writes: ``There is compelling evidence that when companies use Human Resources best practices based on the best research, they trump the competition. These findings are replicable in industry after industry, from automobiles to textiles, to computer software to baseball. ``We must use our Human Resources wisely.

ENERGY AND DEFICIT REDUCTION

And speaking of saving money and reducing the deficit, I have introduced H.R. 3710 which increases the acreage to 10 percent of what is already allocable under a proposal by Interior Secretary Salazar, as announced on November 8, 2011. In other words, more land will be available for exploration, in line with two objectives: decreasing our dependence on foreign sources for oil, and plugging our budget deficit.

The monies will be deposited into the DRES Fund and invested by the Secretary of the Treasury, until the money is transferred to the Coastal and Ocean Sustainability Health Fund (COSH). Annually, the Secretary of the Interior is required to lease 20 percent of the DRES. In addition, this bill will help foment job creation in an industry that is already responsible for 9.2 million American Jobs.

The bill also establishes the Deficit Reduction Energy Security Fund, housed within the United States Treasury Department, which will receive the accrued funds that are dedicated to deficit reduction. In order to ensure that the putative funds generated from the leasing activities which derive from this bill inure to the goal of deficit reduction, the legislation also sets up the aforementioned COSH.

This bill establishes in the Department of the Treasury, the COSH, which shall fund grants for addressing coastal and ocean disasters; and programs and activities that restore, protect, maintain, manage, or understand marine resources and their habitats, and ocean, and coastal resources, including baseline scientific research, and other programs in coordination with federal and state agencies. Monies will be deposited into the COSH fund from interest accrued on OCS royalties, rents, revenues, and fees that will remain, for the period of one year, in the Fund before moving the entirety of the principle in the general Treasury. The bill authorizes the Secretary of Commerce to make grants for such purposes. I look forward to working with members of this Committee and our colleagues to ensure passage of this legislation.

Simply put Mr. Speaker, my bill does not rob Peter to pay Paul but actually requires that money made from the hard work of drilling by our companies is rededicated to reducing our deficit--common sense fiscal and energy policy.

As called for by the House's FY 2013 budget resolution, it replaces the $98 billion sequester in discretionary spending with a $19 billion reduction in the discretionary cap for FY 2013 and with ``reconciliation'' savings from mandatory programs recommended by six House committees. These cuts hurt the American people, children and families.

It also eliminates the separate cap on defense spending for the year to allow for higher spending levels. The measure would modify mandatory programs to save $19.7 billion through FY 2013 and about $315 billion over 10 years, including by decreasing benefits and eligibility for the food stamp program, reducing and repealing elements of the 2010 health care law, and requiring all current and future federal workers to pay an additional 5 percentage points of this salary toward their federal pensions.

President Obama and Democrats oppose the GOP measure, and say that preventing the January 2013 sequester and replacing the savings that would come through sequestration should be done in a ``balanced'' approach in which revenue is part of the solution.

Republicans must abandon their ideological agenda and join Democrats to restore fairness, opportunity, and prosperity to our budget and our economy.

TAXES AND THE BUFFETT RULE AND TAXES

Mr. Speaker, the cloud looming over this Congress is an unintended ``triple-watching hour'' of tax increases that will take effect at the beginning of 2013.

The expiration of the Bush Tax Cuts, the end of the recently extended Payroll Tax Cut, and increases in capital gains and dividends taxation will shock the conscience and wallets of the American people. That is why Congress needs to enact bi-partisan legislation that helps lower the deficit but does not wreck havoc on the financial soul of the middle class. This is a moral document and frankly, the other side is getting more than a little fresh with the American people. It is May and we are voting on a vacuous budget that will likely pass but is doomed to failure in the Senate.

But again, tax reform that lowers the rate, reduces the deficit, and does not pick winners and losers is not easy, but let's not forget, if President Reagan and then-Speaker Tip O'Neill could do it in 1986, anything is possible. But this morning we are not doing a bipartisan dance, but participating in a roller-derby, a truly zero-sum game.

In the budget, the Administration calls for individual tax reform that: cuts the deficit by $1.5 trillion, including the expiration of the high-income 2001 and 2003 tax cuts. As a matter of sound fiscal policy, I am supportive of this effort. I recognize the economic benefits that many attribute to the Bush Tax Cuts, but we must ask ourselves are they affordable at this time.

The President's budget also eliminates inefficient and unfair tax breaks for millionaires while making all tax breaks at least as good for the middle class as for the wealthy; and observes the Buffett Rule that no household making more than $1 million a year pays less than 30 percent of their income in taxes.

The individual income tax is a hodgepodge of deductions, exemptions, and credits that provide special benefits to selected groups of taxpayers and favored forms of consumption and investment. These tax preferences make the income tax unfair because they can impose radically different burdens on two different taxpayers with the same income. In essence, Congress has been picking winners and losers.

THE HOPE AND PROMISE OF THE DEMOCRATIC ALTERNATIVE BUDGET

Preserves the Medicare guarantee and the Social Safety Net. The Democratic budget rejects any policy to end Medicare's guarantee of health care coverage for seniors and disabled workers, and ensures the social safety net remains intact.

Protects Medicare Beneficiaries. Rejects the Republican budget's proposal to end the Medicare guarantee. It supports reforms in the Affordable Care Act (ACA) to close the prescription drug ``donut hole'' for seniors with high prescription drug costs and ensure free preventive care. As a result of these measures, as well as provisions in the ACA to make Medicare spending more efficient, a person in Medicare will save an average of about $4,200 on premiums and coinsurance from 2011 through 2021. Medicare beneficiaries with high prescription drug costs will save even more--an average of nearly $16,000 over the same period.

Preserves Medicaid for Low-Income Families and Seniors. Maintains Medicaid to ensure that 57 million low-income people continue to get health care. Seniors and people with disabilities account for two-thirds of Medicaid spending, and children account for another 20 percent.

Preserves Supplemental Nutrition Assistance (SNAP). Fully funds SNAP and supports the President's proposal to continue certain benefits added because of the economic downturn. Nearly three-quarters of people served by SNAP are in families with children, and one-quarter are in households with someone who is elderly or disabled.

Protects Social Security from Privatization. Social Security is not responsible for our current deficits and should not be cut to reduce the deficit. However, many Republicans continue to advocate privatization, which would put retirees' financial security at risk and worsen the deficit for decades. Our budget affirmatively rules out privatization.

Helps Create More Jobs Now. Unlike the Republican resolution, our budget includes the President's jobs initiatives, including the following:

Transportation Jobs. $50 billion to fund jobs that address immediate surface transportation priorities and $10 billion to establish an infrastructure bank.

Tax Credits for Job Creation. A temporary 10 percent tax credit for new jobs and wage increases.

Tax Incentives for Manufacturing. Includes a number of incentives for domestic manufacturing, such as providing a tax credit for companies that return operations and jobs to the U.S. while eliminating tax breaks for companies that move opertions and jobs overseas.

Education Jobs. $80 billion to promote jobs creating the infrastructure to help students learn and create a better future workforce, including $30 billion to put hundreds of thousands of Americans back to work upgrading at least 35,000 crumbling public schools, and $25 billion to help prevent hundreds of thousands of educator layoffs.

First Responder Jobs. $5 billion to help states and localities hire police officers and firefighters and reverse previous layoffs.

Jobs for Veterans. $1 billion for the President's proposal to establish a Veterans Job Corps and employ at least 20,000 veterans.

Builds a Stronger America through Long-Term Growth. Our budget invests in research, education, and innovation that will create a globally competitive workforce for the future.

Education Investments. Follows the President's request for increased investment in education and includes his request for $6 billion to prevent the interest rate on subsidized student loans from doubling this July.

Innovation and Research Investments. Funds science and engineering workforce development and supports innovative manufacturing processes that will reduce costs by using less energy, improving product quality, and accelerating product development.

Small Business Investments. Provides additional resources for the Small Business Administration (SBA) to ensure that the lending volume for loan programs remains the same, rather than shrinking and denying many small businesses' access to capital.

Infrastructure Investments. In addition to short-term jobs initiatives for transportation, our budget includes the President's six-year surface transportation proposal to create construction jobs and fuel long-term economic growth. It also includes additional funding to maintain America's harbors, seaports, and waterways.

Reduces the Deficit through Shared Responsibility. Congress has already reduced projected deficits by more than $1 trillion through discretionary cuts for 2011 and 2012 and enacting tight spending limits for the next nine years. Our budget further reduces the deficit with policies that balance spending cuts increased revenue.

Gets Deficits Under Control. The deficit falls from 8.7 percent of GDP in 2011 to under 3 percent of GDP by 2015, and it remains there through the ten-year budget window.

Cancels Sequestration and Replaces it with Balanced Deficit Reduction. Replaces the $1.2 trillion in deficit reduction under the scheduled Budget Control Act sequestration with greater deficit reduction from targeted spending cuts and revenue increases.

Provides Tax Relief for Working Families and Ends Tax Breaks for the Wealthy. Extends the 2001 03 tax cuts for the middle class and rejects tax increases on the middle class. Accommodates expansion of incentives for low- and middle-income families to earn income, save for retirement, and attend college. To increase fairness and reduce the deficit, this budget ends unwarranted and fiscally irresponsible Bush-era tax cuts for millionaires, closes a variety of corporate tax loopholes, and establishes a ``Buffett Rule'' to ensure that working families do not face a higher tax rate than the wealthiest Americans.

RYAN REPUBLICAN ALTERNATIVE: HURT AND PAIN--PART II

Ends the Medicare Guarantee. The Republican budget ends the Medicare guarantee, giving seniors a voucher with an artificial price cap to purchase insurance and leaving it up to them to figure out how to keep their costs down as the value of their voucher fails to keep pace with projected growth in health care costs. This plan will raise health care costs for seniors and leave traditional Medicare to ``wither on the vine.''

Reopens the Medicare ``Donut Hole'' and Increases Costs of Preventive Care Services. The budget takes away important Medicare improvements for seniors and persons with disabilities by repealing key provisions of the Affordable Care Act. The budget reduces the prescription drug health by re-opening the coverage gap, or ``donut-hole,'' and it increase costs to seniors for preventive care services. Reopening care services. Reopening the donut hole alone will increase costs for Medicare beneficiaries with high prescription drug costs by an average over $10,000 over the next ten years.

Abandons American Workers. Putting Americans back to work is the fastest and most effective way to reduce the short-term deficit-in fact, the Congressional Budget Office estimates that slow growth and under-employment account for over one-third of the projected deficit for 2012. But the Republican budget turns it back on American workers, ignoring the President's proposals for new jobs for teachers, first responders, construction workers, and veterans involved in building a better infrastructure that will boost our economy now and in the future. Independent analysts have found that the Republican budget could lead to the loss of more than 2 million jobs over two years.

Transportation Jobs. Instead of investing in infrastructure, the Republican budget reduces transportation spending by at least one-quarter over 10 years. Next year, transportation spending would be barely one-half of this year's level, a steep cut that could delay or stop projects already underway. A failure to invest in transportation will also hurt businesses' ability to transport goods and supplies in the long run, weakening future economic growth.

Tax Breaks for Outsourcing jobs. The Republican budget boosts tax incentives that encourage multinational companies to ship profits, intellectual property, and thousands of jobs overseas while costing the American economy billions of dollars.

Makes College More Expensive, Undermining U.S. Competitiveness. The budget eviscerates funding for higher education, eliminating the $104 billion that Congress has already enacted to help sustain the maximum Pell grant award and to provide for yearly inflationary increases. It adds an average of $2,800 in higher loan repayment costs to more than 7 million low-and moderate-income college students by letting the interest rate on subsidized students loans double, from 3.4 percent to 6.8 percent. It also eliminate $47 billion for lower-cost loans for low-income students as well as repayment plans enacted and paid for by previous Democratic Congresses. It even rejects the President's proposal to extend a $2,500 tax cut to working families to help cover the costs of college, refusing to extend the American Opportunity Tax Credit beyond December. Overall, mandatory higher education funding is cut by $166 billion over ten years versus current law levels, and by $285 billion below the President's request.

Slashes the Social Safety Net. The Republican budget shreds the social safety net for seniors, low-income children, persons with disabilities, and families struggling to get by in a challenging economy, all while cutting taxes for the very wealthy.

Slashes Medicaid for Seniors and Low-Income Families. The budget slashes Medicaid by $810 billion and converts it into a block grant to states. ``Block-granting'' Medicaid is not entitlement reform it is entitlement destruction. This is simply code for deep, arbitrary cuts in support to the most vulnerable seniors, individuals with disabilities, and low-income children.

Block-grants and Cuts Supplemental Nutrition Assistance (SNAP). The budget slashes SNAP funding by $133.5 billion over ten years, harming the million who rely on this aid to feed their families. Nearly three-quarters of people served by SNAP are in families with children, and one-quarter are in households with someone who is elderly or disabled.

Abandons Fairness. The budget provides tax breaks for the wealthy and special interests at the expense of everyone else. Republicans' refusal to ask millionaires to pay one more penny in taxes leads them to place the entire burden of reducing deficits and debts on the shoulders of middle-income families and seniors. This budget dismantles the Medicare guarantee, cuts back and nutritional assistance for low-income children and families, and severely underfunds the crucial health care safety net for more than 56 million Americans provided by Medicaid. At the same time, it showers an additional $4.6 trillion in tax cuts (over and above extending all of the Bush-era tax cuts) that primarily benefit the wealthy. Overall, millionaries can expect an average tax cut of $394,000 in this budget, which includes $129,000 just from extending all of the Bush-era tax cuts.

Mr. Speaker, again I call on my colleagues to vote against H.R. 5652, an unrealistic, unpragmatic, and unPATRIOTIC so-called bill that is a punch to the gut of the most vulnerable Americans.

INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS, Washington, DC, May 10, 2012.
Member of Congress,
U.S. House of Representatives,
Washington, DC.

Dear Representative: On behalf of the nation's 300,000 professional fire fighters and emergency medical personnel, I write to express my strong opposition to H.R. 5652, the Sequester Replacement Reconciliation Act of 2012. This legislation would rewrite the bipartisan Budget Control Act of 2011 by placing greater economic hardships on working class Americans or vulnerable populations.

Although the IAFF is deeply concerned with the impact that defense cuts will have on our federal members employed at defense installations, we cannot support unraveling the Budget Control Act through the unbalanced and draconian approach of H.R. 5652. Balancing the budget on the backs of fire fighters without requiring those who are well off in our society to share more of the burden is simply inexcusable. To solve our fiscal challenges, we must have shared sacrifice from all members in our society. Instead of shared sacrifice, H.R. 5652 just leaves fire fighters sacrificed at the altar.

One of the main ways H.R. 5652 achieves savings in the federal budget is by shifting a greater burden for funding essential services to state and local governments. Over the past five years, states already have cut nearly $300 billion from their operating budgets as a result of the Great Recession. Even as the private sector recovers, state and local governments are still struggling to balance their budgets, leading to continued job losses among fire fighters and other public sector employees. Since April 2012, the U.S. economy has lost 584,000 jobs in the public sector. Further cuts in federal aid for essential government services will only exacerbate public sector job losses and undermine core functions of government such as fire protection and emergency medical treatment.

Specifically, H.R. 5652 would completely eliminate the Social Services Block Grant, saving the federal government $18.7 billion. Originally established during the Reagan administration, these critical funds help state and local governments provide essential services to 23 million seniors, children, and disabled Americans. Home-based services like Meals on Wheels, child-care services for low-income families, and programs to prevent child abuse and neglect all receive funding, in whole or in part, through the Social Services Block Grant.

H.R. 5652 would also cut $22.7 billion from the Medicaid program. Created along with Medicare in 1965, Medicaid represents an historic joint commitment by the federal government and our states and territories to provide essential health care to our nation's poor. Medicaid is one of our nation's core safety-net programs. As the depths of the Great Recession grew, so too did Medicaid enrollment, creating increased pressures on state budgets. The proposed cuts in H.R. 5652 to Medicaid will only add to state budget pressures. For example, nearly half of the cuts will come from a reduction in the state provider tax threshold. States can use the revenues generated from the provider tax to offset their share of Medicaid payments.

Eliminating the Social Services Block Grant and cutting Medicaid would have disastrous consequences for our local communities. State and local governments would be hard-pressed to fill the budget holes created by H.R. 5652. Without these funds, state and local governments may be forced to eliminate these programs or cut funding from other essential programs such as the fire service to balance their budgets. Either way, the consequences to our local communities would be devastating.

Furthermore, the IAFF strenuously objects to forcing drastically higher pension contributions from current and future federal employees. H.R. 5652 would require all current federal employees to contribute an additional five percent in pay toward their defined benefit pension plan, with no enhancement in benefits. Federal workers have already contributed $60 billion toward deficit reduction through a two-year pay freeze. Forcing greater economic sacrifices from federal fire fighters is particularly insulting, given the sacrifices these brave men and women already make on the job. The nation's federal fire fighters protect many of America's most vital national assets, ranging from sensitive military bases to Veterans hospitals. Federal fire fighters should not be treated like a piggy bank for Congress.

For these reasons, we urge you to reject H.R. 5652, the Sequester Replacement Reconciliation Act of 2012 when it comes for a vote in the U.S. House of Representatives. Thank you for your consideration of the views of America's front line domestic defenders.

Sincerely,

Harold A. Schaitberger,
General President.

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