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Mr. FRANKEN. Madam President, I wish to thank the Senator from North Dakota, Mr. Hoeven, for his courtesy of allowing me to speak now so that I may take the Chair and listen to his speech.
I rise today to urge my colleagues to support our economic recovery, endorse fiscal responsibility, and bolster the middle class by voting to extend tax cuts on income up to $250,000.
Minnesotans are still struggling, and we need to act now so people making under $250,000 can keep their tax cuts. Middle-class families need every bit of help they can get. At the same time, we need to make sure the richest 2 percent of Americans are paying their fair share so we can pay down the deficit. It would be irresponsible not to.
Thanks to the policies of the Recovery Act, we emerged from one of the worst recessions in generations and actually stopped it from becoming the second Great Depression. That being said, too many working families are still struggling to find work, pay their rents or their mortgages, find affordable childcare, and send their kids to college. By extending tax cuts to these families, we will be putting money in their pockets and, in turn, they will likely go out and spend that money in their communities, at their local small businesses, and further bolster recovery.
My colleagues on the other side of the aisle look at this a bit differently. They have put forward a proposal that would extend tax cuts on income over $250,000 for a year as well, which would cost us over $800 billion in revenue over 10 years. They argue if we let taxes go up on the richest 2 percent of Americans, we are inviting another recession and we are stifling growth. They can make that claim over and over, but there is no evidence of this. It would be more helpful to examine the facts and what recent history has taught us.
First, it is essential to clarify who exactly would get a tax cut under the Democratic proposal. Luckily, the answer is easy: essentially everyone. If we pass the bill proposed by the majority leader and extend the tax cuts on the first $250,000 of income, everyone who currently pays income taxes will get a tax cut extension.
If a person makes $50,000, our bill preserves that person's entire tax cut. If a person makes $100,000, this bill preserves their entire tax cut. If a person makes $250,000, it preserves the person's entire tax cut, and their tax cut is also a lot bigger than the guy making $50,000 or $100,000. That might not be clear from some of the rhetoric we have been hearing lately, but it is true.
People making over $250,000 would still get a tax cut worth thousands of dollars, and it would be larger than anybody else's tax cut. The only portion of their taxes that would increase--or it would stay the same as under the law we have now, which is to not extend the Bush tax cuts--would be on any additional income above $250,000. If a person makes $250,000 plus $1, that person pays 39.6 percent on that extra $1. That is a difference of 4.6 cents, a little less than a nickel. So for those people under this plan, they get the benefit of thousands and thousands of dollars in tax cuts, minus a nickel.
Secondly, claims that not extending the extra tax breaks for the richest 2 percent will cause harm to the economy are not supported by history. Let's take a look at President Clinton. When he proposed his deficit reduction plan in 1993, every Republican in the House and every Republican in the Senate opposed it. And what was their claim? Their claim was that it would hurt businesses and cause a recession. Every Republican voted against it.
What really happened in the ensuing years? Not only did we have an unprecedented expansion of our economy for 8 years, creating more than 22 million new net jobs at the very tax rate we are talking about now for people over $250,000, but, at the same time, we turned the biggest deficit in history into the biggest surplus in history. President Clinton handed President George W. Bush a record surplus. So the only time in the last 30 years in which we actually had the budget in balance was after we raised taxes on those at the top--the very level we are talking about now.
Between 1993 and 2001, this country created an unprecedented number of jobs--22.7 million net--and did so while benefiting everyone up and down the economic ladder. Not every individual but every quartile. There was economic growth in every quartile. We witnessed a decrease in the number of Americans in poverty, and we saw the creation of more millionaires and billionaires than ever before. President Clinton's deficit reduction plan not only reduced the deficit as planned, it eliminated it entirely. So not only did we create all that prosperity, President Clinton then handed off a record surplus. I think this needs to be said. He handed off a record surplus to incoming President George W. Bush.
In fact, when President Bush took office, we were on track to completely pay off our national debt with $5 trillion of surpluses projected over the next 10 years. In other words, we would have zeroed out our national debt last year--zero, no debt. But he cut taxes in 2001, and he cut taxes in 2003, after we went to war--unprecedented in our Nation's history.
The decision before us today is a fundamental one: Should we extend these tax cuts on income up to $250,000, preserving tax cuts for everyone, with the largest tax cuts going to those with incomes of $250,000 or more--they would get the largest tax cuts--or should we ask the
richest 2 percent to pay their fair share, to pay 4.6 percent extra on income over $250,000, which has been shown historically to create jobs? It poses a question about choices: We can choose to do the economically responsible thing or we can choose to provide additional tax cuts for people who least need them.
When everyone pays their fair share, our Nation can get back on a path to fiscal responsibility and, at the same time, invest in quality education, in infrastructure, in R&D for high-tech industries. These are the things which create prosperity. We can create good jobs in our manufacturing sector and other emerging industries.
In fact, investing in the middle class is a win for everyone. The buying power of the middle class is what sustains our economy, makes it grow. Our economy doesn't grow from the top down. If our experience over the last 30 years teaches us anything, it is that. It grows from the middle class out. President Clinton understood that and so does President Obama.
I have friends who have been very successful in the business world. I have enormous respect for them and what they have accomplished, and I do for almost every American who has been successful in building their businesses. There are some people who have taken some shortcuts and maybe don't deserve our approval, but they are a very small fraction. We honor, we celebrate people who have been successful.
This is what my friends who have been successful tell me. They say when the middle class is strong--when they have customers--they grow their businesses and can make more money. Believe me--I have had friends tell me exactly this--they would rather pay a 39.6-percent marginal rate on $2 million of income than pay 35 percent on $1 million of income. That is the difference between a booming economy and a stagnant one. How many times have we heard that the deficit is what is hurting our economy? We are talking about a difference of almost $900 billion to get our deficit under control. All this is just common sense. It is common sense and taking a little bit of a look at history over the last 30 years. Policies that support and grow the middle class benefit everyone and increase prosperity all along the economic spectrum.
So, in the end, we have a big decision to make today. Do we stand for our economic recovery and for middle-class families and for addressing the budget deficit with the Democratic proposal or do we continue to give extra tax breaks to the richest 2 percent of Americans instead of extending improvements in the child tax credit and earned-income tax credit affecting more than 13 million working families while adding hundreds of billions of dollars to the deficit?
Let's be clear. The Republican plan would raise taxes on 13 million middle-class and working-class families and get rid of the expanded earned-income tax credit to people who are working so we can pay for tax cuts for millionaires and billionaires. I hope we can show the American people that common sense still prevails in the Senate by acting in unison across the aisle to do what is responsible.
I urge all of my colleagues to extend the middle-class tax cuts and to vote for the majority leader's bill.
Thank you, Madam President. I thank my colleague from North Dakota, Senator Hoeven.
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