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Public Statements

Middle Class Tax Cut--Motion to Proceed

Floor Speech

By:
Date:
Location: Washington, DC

BREAK IN TRANSCRIPT

Mr. SANDERS. Mr. President, I rise this morning in strong support of the Middle Class Tax Cut Relief Act that would extend tax cuts for 98 percent of the American people while letting the Bush tax breaks for the wealthiest 2 percent expire at the end of this year.

I also want to express my strong opposition to the McConnell-Hatch bill that would provide tens of billions of dollars in tax breaks next year to millionaires and billionaires who today are doing phenomenally well.

Really, this is not a complicated issue. The United States now is seeing growing wealth and income inequality. The middle class is disappearing, poverty is increasing, the people at the top are doing very well at the same time that the effective tax rate of the millionaires and billionaires is the lowest it has been for many decades.

This country has a $16 trillion national debt. We have a $1 trillion deficit this year. I believe to give huge tax breaks to millionaires and billionaires makes no sense, and I believe it makes no sense to the American people.

Our Republican friends have made it very clear that when they say they don't want to raise taxes on anyone, that is just code for saying they don't want to raise taxes on millionaires and billionaires. I should add that if Governor Mitt Romney becomes President, he has proposed even more tax breaks for the wealthiest people in this country while at the same time cutting Social Security, ending Medicare as we know it, and slashing investments in education, transportation, child care, nutrition, and a variety of other programs that benefit working families and the middle class.

SOCIAL SECURITY

This morning I want to say a few words about Social Security. Let me be very clear. When we talk about Social Security, it is imperative that we understand that Social Security has not contributed one nickel to our deficit or our national debt. So when people say we have a national debt problem and that we have Social Security and they fuse the two together, that is simply incorrect.

As all Americans know, Social Security is independently funded through payroll tax contributions from workers and employers. Up until last year, it has received no funding from the Federal Treasury.

Despite the rhetoric we hear from Republicans and those on Wall Street, Social Security is not in financial crisis. Social Security has a $2.7 trillion surplus. According to the Social Security Administration, Social Security will be able to pay out 100 percent of promised benefits to every eligible recipient for the next 21 years.

Although the American people now take Social Security for granted, we should never underestimate the incredibly positive impact Social Security has had on our country. Sometimes we do forget it, especially when those people come up and say: Let's cut Social Security. Let's cut Social Security. But let's talk about what Social Security has accomplished.

Since its inception over 75 years ago, through good economic times and bad, through terrible recessions, Social Security has paid out every nickel owed to every eligible beneficiary with minimal administrative cost. This is an extraordinary accomplishment. Nobody has ever received a letter from the Social Security Administration saying: Sorry. We are in the middle of a recession. We have had to cut your benefits in half. Every eligible beneficiary has received 100 percent of the benefits owed to him or her.

During this 75-year period, Social Security has succeeded in keeping millions of senior citizens, widows, orphans, and persons with disability out of poverty. Before Social Security existed, almost half of America's senior citizens lived in poverty. Today, that number is still too high, but it is 10 percent not 50 percent.

More than 55 million Americans now receive Social Security benefits. I would contrast that record to the situation we recently saw on Wall Street when millions of Americans lost significant or all of their retirement savings because of the collapse of Wall Street and the financial crisis we went through. Despite this success, despite this incredibly strong record, my Republican friends, and too many Democratic friends, are calling for cuts in Social Security.

For example, we know where Mitt Romney stands on Social Security. Mr. Romney wants to begin the process of privatizing Social Security. I disagree with him because I think that would benefit primarily his friends on Wall Street, because if we privatize Social Security, where are people going to get their retirement benefits? From Wall Street. Those guys on Wall Street will end up making huge amounts of money by charging the average American a significant commission for their service.

Mr. Romney wants to gradually increase the retirement age to 68 or 69. I don't agree with that. At a time when 23 million Americans remain unemployed or underemployed and when the long-term unemployment for senior citizens is skyrocketing, tell me how many employers out there are going to say to a 68-year-old person or a 69-year-old person: We have a great job for you, especially if someone is in the construction trades or is a nurse or is somebody who stands on their feet 8 or 9 hours a day, such as a waiter or a waitress. I don't think those jobs are going to be there if we raise the Social Security retirement age. I don't know what those folks are going to be doing for income.

Finally, the Romney campaign has put on his Web site the following:

Mitt believes that [Social Security] benefits should continue to grow but that the growth rate should be lower for those with higher incomes.

What does that mean in English? While Mr. Romney has been somewhat vague about his intentions and has not spelled out the exact details of this proposal, some of my Republican friends in the Senate have provided what I believe is the roadmap Mr. Romney is talking about. Last year, Senators Lindsey Graham, Rand Paul, and Mike Lee introduced a bill that would, among other things, reduce the future growth rate of Social Security benefits for the top 60 percent of earners--60 percent of earners--by establishing what they call a progressive price index.

Who are these so-called higher income individuals whom my Republican friends are talking about? Under this Republican bill, a worker making about $45,000 a year today, retiring in 2050, would receive 32 percent less in annual Social Security benefits than under the current formula. How much is a 32-percent cut for this middle-class wage earner? It is about $7,500 a year, and that, my friends, is a lot of money for a retiree.

It should come as no surprise that Republicans in Washington and Governor Romney want to slash Social Security. The truth is, Republicans have never liked Social Security, and they have been attacking Social Security since its inception. That is not news. The question that millions of Americans are asking themselves today, however, is where President Obama stands on Social Security. Unfortunately, he has been largely silent on this issue since he has been in the White House and during the current 2012 campaign. He made a very strong statement recently, incorrectly attacking the Republican proposal--the so-called Ryan proposal--to move Medicare toward a voucher program. But unless I am mistaken, I did not hear a word from him on the future of Social Security, and that is a shame.

That is a shame because candidate Barack Obama, when he was running for President in 2008, made it very clear to the American people he would be a strong defender of Social Security. Let me remind the American people exactly what Barack Obama said on the campaign trail in 2008.

On September 6, 2008, Barack Obama told the AARP the following:

John McCain's campaign has suggested that the best answer for the growing pressures on Social Security might be to cut cost of living adjustments or raise the retirement age. Let me be clear: I will not do either.

That was then-candidate Senator Barack Obama. On April 16, 2008, Senator Barack Obama said:

The alternatives, like raising the retirement age, or cutting benefits, or raising the payroll tax on everybody, including people making less than $97,000 a year--

Which today would be $110,000 a year--

those are not good policy options.

On November 11, 2007, candidate Barack Obama said:

I believe that cutting [Social Security] benefits is not the right answer; and that raising the retirement age is not the best option.

In order to address the long-term financial challenges of Social Security, candidate Barack Obama came up with an idea that I believe hit the nail on the head. It was exactly the right approach, and I have applauded him for coming up with that idea. What he said is that he would apply the Social Security payroll tax on income above $250,000 a year to make sure a millionaire and a billionaire pay the same percentage of their income into Social Security as someone who today makes $110,000 a year.

The bottom line is we lift the cap on taxable income so billionaires and millionaires and those making above $250,000 a year start contributing into the Social Security trust fund. Recent reports have confirmed this would ensure Social Security would remain solvent for the next 75 years.

In 2008, candidate Barack Obama was exactly right. That is the solution to the long-term financial needs of Social Security, and that is why I introduced candidate Obama's concept into legislation. It was the right approach. I have introduced it into legislation and it now has 10 cosponsors.

Here is how the Economic Times reported on the subject back on June 14, 2008:

Barack Obama would apply the Social Security payroll tax to all annual incomes above $250,000, which would affect the wealthiest 3 percent of Americans. The Presidential candidate told senior citizens in Ohio that it is unfair for middle-class earners to pay the Social Security tax ``on every dime they make,'' while millionaires and billionaires pay it on only ``a very small percentage of their income.''

That is what Barack Obama said when he was running for President in 2008. I agreed with him. He was very clear. I suspect millions of Americans voted for Barack Obama because of the strong stand he made in defending Social Security. Unfortunately, since he has been in office, he has been much less clear about his position on Social Security. There were reports last year he was considering cutting Social Security as part of a grand bargain with the Speaker of the House John Boehner.

What I simply want to know, and I think what the American people want to know, is where does the President stand on Social Security? Is he going to keep faith with the American people? Does he continue to believe what he believed when he ran for President? Is he going to say to the millions and millions of seniors out there who are struggling every single day to keep their heads above water that we are not going to balance the budget on the backs of the elderly and the children and the sick and the poor; that we are not going to continue to give tax breaks to millionaires and billionaires who are doing phenomenally well and cut Social Security as part of some grand bargain when, in fact, Social Security has not contributed a nickel to the deficit situation?

As the Presiding Officer well knows, in terms of Social Security, there is a lot of discussion in the Senate about moving toward a chained CPI--a chained CPI. Nobody outside this room understands what a chained CPI is, but I will tell you what it is. A chained CPI is significant cuts in Social Security COLAs, and it rests on the theory, if we can believe it, that COLAs for seniors on Social Security are too generous.

When I tell this to the seniors in Vermont, I say: Please, don't laugh, but they always laugh. They say: Bernie, in the last 2 out of 3 years, while our health care costs have been going up, while our prescription drug costs have been going up, we haven't gotten a COLA at all. How could they possibly believe the formulation for coming up with these COLAs is too generous?

But that is what the billionaires and the millionaires want, that is what our Republican friends want, and that is what some Democrats want. They want to come up with a formulation which will cut Social Security benefits. It will mean, if someone is 65 today, that when they become 75, they will receive $500 a year less; and when they are 85 and are trying to get by on $15,000, $16,000 a year, they are going to cut $1,000 from their Social Security benefits.

I think--when this country has the most unequal distribution of income and wealth, when the top 1 percent owns 40 percent of the wealth of this country, when in the last study I saw 93 percent of all new income in 2010 went to the top 1 percent--we shouldn't balance the budget by cutting Social Security for people who are trying to survive on $14,000 or $15,000 a year. That is not the right formulation or the way we should go.

I wish to conclude my remarks by simply saying I am going to do everything I can to defend Social Security. I am going to do everything I can--given the fact our deficit is largely caused by unpaid wars and tax breaks for the rich and the recession, which was created by Wall Street greed--to fight any effort to cut Social Security, Medicare, and Medicaid.

Today, I think the American people know where the Republicans stand on Social Security. They know where Governor Romney stands on Social Security. But now is the time for the President of the United States to tell us where he stands on Social Security. Is he going to keep faith with the promises he made in 2008? Is he going to stand with the senior citizens of this country and say: No, we are not going to balance the budget by cutting Social Security?

I look forward to hearing what the President has to say. This is an enormously important issue to the seniors and the veterans of Vermont, and I am going to continue dealing with it.

With that, I suggest the absence of a quorum.

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