Small Business Additional Temporary Extension Act of 2011
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Mr. CONRAD. Mr. President, I want to thank the Senator from Indiana for his thoughtful presentation. There are parts of it with which I disagree, but the overall theme of what he has said is undeniably true.
I believe our country is in deep trouble. At the end of this year, we will have a debt that is 100 percent of the gross domestic product of the United States. We have had two of the leading economists in this country tell us, after a review of 200 years of economic history, that when a country reaches a gross debt of more than 90 percent of its GDP, its future economic prospects are diminished. And that is where we are. So I agree with the Senator from Indiana that this is the time. We must find a way to come together to craft a plan that deals with this debt threat.
Five years ago, the ranking Republican on the Budget Committee, Senator Gregg, and I came up with the concept of a commission. That effort led to the commission that was in place last year, and it came up with a recommendation to reduce the debt $4 trillion over the next 10 years, and 11 of 18 commissioners supported it. Senator Gregg and I both supported it. We had five Democrats, five Republicans, and one Independent. That is the only bipartisan plan that has emerged from anywhere. But we needed 14 of 18 to agree for it to come to a vote in Congress.
There were many parts of that plan I didn't like. I would have gone further than that plan. I proposed to the commission that we have a $6 trillion plan of debt reduction because we could balance the budget in 10 years with that kind of plan. But it was a step in the right direction. It was a big step in the right direction. So I supported it, along with the other 10 commissioners who did.
I want to say to the Senator from Indiana that I respect the presentation he just made because, in larger terms, it says what has to be said. We all have to be truth-tellers. However uncomfortable the truth is, we have to be truth-tellers. I believe the truth is that when the revenue is the lowest it has been in 60 years as a share of GDP and spending is the highest it has been in 60 years as a share of GDP, we have to work both sides of the equation. We are going to have to cut spending, and I believe we are going to have to raise revenue.
None of it is very popular. If you ask the American people, they will say to you: Well, yes, get the deficit and debt under control, but don't touch Social Security, don't touch Medicare, and don't touch defense. And by the way, just those three are about 80 percent of Federal spending if you add up all the mandatory programs and add up defense. That is about 80 percent of Federal spending. And if you ask the American people, they say: Don't touch any of them. On the revenue side, they say: Don't touch that. Well, do you know what is left? Twenty percent of Federal spending.
If you start asking them questions about the elements of that 20 percent, they reject every one except one--foreign aid. They say: Yes, cut foreign aid. A majority supports that. The problem is that is only 1 percent of the budget. Here we are borrowing 40 cents of every dollar we spend, and even if we eliminate all foreign aid, it does not make a material difference.
The other thing the American people support by a majority--the only other thing--is taxing the wealthy. Let me just say that I believe the wealthy are going to have to pay somewhat more. But that won't solve our problem because to solve the problem, you would have to have a top rate of 70 to 80 percent on corporations and individuals. What would that do to the competitive position of the United States?
So I believe we all are going to have to be truth-tellers, and before we are done, we are going to have to find a way to come together. I was part of that effort on the commission. I was part of that effort in this group of six, which is now a group of five because one of our members left. And there is this other effort under way that is a leadership effort with the White House being involved. At the end of the day, the White House has to be at the table.
What Senator Gregg and I had recommended was that the Secretary of the Treasury be the chairman of the commission and the head of OMB be one of the 18 members. That wasn't adopted by the Congress. We got 53 votes in the Senate for our proposal, but 53 votes doesn't pass things around here. You have to have 60. You have to have a supermajority. So here we are.
Let me just say again that I thank the Senator for his thoughtful presentation because that is what it is going to take. We are going to have to be brave. We are going to have to show some political courage here to do what is right for our country. So I appreciate the thoughtful remarks of the Senator from Indiana.
Let me make a brief review in response to some of what I have heard this morning because I have heard some things with which I strenuously disagree that I believe require a response. We all agree we are on an unsustainable path. We are borrowing 40 cents of every dollar. That cannot be continued.
As I indicated earlier, this is a 60-year look at the spending and revenue of the United States. We can see the spending line is the red line; the green line is the revenue line. The spending of the United States as a share of national income is the highest it has been in 60 years. The revenue is the lowest it has been in 60 years.
Some of our colleagues say it is just a spending problem. Factually, I reject that. The facts show it is not just a spending problem--although it is clear we do have a spending problem. When spending is the highest it has been in 60 years, clearly we have a spending problem. But as this chart reveals, revenue is the lowest it has been in 60 years. So, clearly, we have a revenue problem as well.
Yesterday we voted on the package that came from the House of Representatives. The package that came from the House Budget Committee was passed by the House of Representatives. Even though that package was defeated overwhelmingly and on a bipartisan basis here yesterday, again this morning we had colleagues come and talk about what a great package it was. I do not believe it was a great package. I think it was a terrible package, and here is why--and now I am quoting former economic adviser to President Reagan, one of President Reagan's economic advisers, Mr. Bartlett. He said, about the House Republican plan, the following:
Distributionally, the Ryan plan is a monstrosity. The rich would receive huge tax cuts while the social safety net would be shredded to pay for them. Even as an opening bid to begin budget negotiations with the Democrats, the Ryan plan cannot be taken seriously. It is less of a wish list than a fairytale utterly disconnected from the real world, backed up by make-believe numbers and unreasonable assumptions. Ryan's plan isn't even an act of courage; it's just pandering to the tea party. A real act of courage would have been for him to admit, as all serious budget analysts know, that revenues will have to rise well above 19 percent of GDP to stabilize the debt.
This is a former economic adviser to President Reagan commenting on the House Republican plan that we rejected on a bipartisan basis here yesterday.
Why does he say it is a monstrosity? He says it because even though revenue is the lowest it has been in 60 years, the first thing the Republican budget from the House did was cut taxes further, an overwhelming tax cut for the wealthiest among us after they already enjoyed very significant tax reductions over the last decade.
In fact, the plan that came from the Republican House would have given those who have over $1 million of income a year on average a tax cut of over $192,000. For those who are as fortunate as to earn over $10 million a year, the plan they sent over here would have given them on average a tax cut of $1,450,000. That is a fact. That is just a fact.
Does that make any sense at all when the revenue of this country is the lowest it has been in 60 years, that the first thing you do is dig the hole deeper, give another $1 trillion of tax cuts going to the wealthiest among us? It makes no sense.
It did not end there because the plan from the House also would permit a scam that is occurring to continue. The scam I am referring to relates to this little building down in the Cayman Islands, Ugland House. This little five-story building down in the Cayman Islands claims to be the home of 18,857 companies. Really, 18,000 companies are doing business out of this little five-story building down in the Cayman Islands? Please. Mr. President, 18,000 companies are not doing business out of this little five-story building down in the Cayman Islands. The only business that is going on is monkey business, and the monkey business that is going on is avoiding the taxes they legitimately owe to the United States.
You wonder why big companies making billions of dollars a year can announce they owed no taxes to the United States--none? It is because they are operating out of Ugland House down in the Cayman Islands where there are no taxes, and they show their profits in their companies down in the Cayman Islands.
When I was tax commissioner in my State I found a company that reported all of their earnings down in the Cayman Islands. They did business all across the country, but amazingly enough none of those companies showed any profits in the United States. They showed all their profits in the Cayman Islands where, happily, there are no taxes.
The Republican budget plan said: That is fine. Keep doing it.
That is not fine. It is not fair. We know from our own Permanent Committee on Investigations in the Senate that these offshore tax havens are proliferating. Here is a quote from our Senate Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations:
Experts have estimated that the total loss to the Treasury from offshore tax evasion alone approaches $100 billion per year, including $40 to $70 billion from individuals and another $30 billion from corporations engaging in offshore tax evasion. Abusive tax shelters add tens of billions of dollars more.
The Republican plan from the House says: No problem. Keep on doing it. In fact, we will go you one more. We will give you more tax cuts for the wealthiest among us.
I tell you, that plan cannot stand scrutiny. At the same time it says: You know, because we have the lowest revenue in 60 years, and because we are going to give even more tax preferences, more tax credits, more tax schemes to the wealthiest among us, we are not going to be able to keep Medicare.
I have heard colleagues say that these Draconian cuts to Medicare that are in the House plan are a way of saving Medicare. You don't save Medicare by destroying it. That is what the House plan does, make no mistake. It ends Medicare as we know it. Why do I say that? Let me just show you what it does.
Right now, under traditional Medicare, the individual pays 25 percent of their health care costs. That is how it works today. You pay about 25 percent. A senior citizen eligible for Medicare pays about 25 percent of their costs. Under the House Republican budget plan that they passed and sent to the Senate that we defeated yesterday by a bipartisan vote, they would increase what the individual pays from 25 percent to 68 percent, and they claim they are saving Medicare. It doesn't look to me like they are saving it. It looks to me like they are completely undoing it.
When we add it all up, what is most striking is that the House Republican plan, although it gives massive tax cuts to the wealthiest among us, another $1 trillion of tax cuts, even though it shreds Medicare and completely undermines Medicaid, which would mean another 34 million people do not have health care coverage in this country because they completely undo the coverage for health care passed last year so 34 million people are not going to have health care as a result of their plan--even with all of that and the other dramatic cuts--by the way, they cut support for energy programs to reduce our dependence on foreign energy, they cut that 57 percent; they cut education almost 20 percent--even after all that you would think at least they got the debt under control? No.
Amazingly enough their plan, according to their own numbers, would add $8 trillion to the debt. Wow. They shred Medicare, they cut education dramatically, they cut almost 60 percent of the funding for energy to reduce our dependence on foreign energy--they cut that 57 percent, and they still add $8 trillion to the debt. That is a good plan? I don't think so. I don't think that is a plan that can stand much scrutiny.
We also heard a lot of complaints from the other side that we have not gone to markup on the budget in the Senate. That is true. The reason we have not is because something is going on in this town that is very unusual. There are high-level bipartisan talks going on with the White House on what the budget plan should be to deal with our debt. This is something I have encouraged for years.
This year I have repeatedly called for a summit to deal with our debt, to get a plan in place to cut spending, and, yes, to raise revenue--hopefully without raising taxes but by eliminating tax expenditures, tax loopholes, this kind of scam we have just talked about of offshore tax havens and abusive tax shelters. That bipartisan leadership effort that is underway deserves a chance to succeed. If they reach a conclusion, they may need a budget resolution. They may need us to have a markup in the Budget Committee to implement their plan.
Some do not want to wait, they do not want a bipartisan agreement. But we simply must have a bipartisan agreement if there is to be any chance for success.
The House is controlled by the Republicans. The Senate is controlled by the Democrats. There is a Democrat in the White House. The only possible way that a plan is actually passed into law and implemented is if we work together. I did it for all last year on the President's commission. I have done it for months of this year with three Democrats, three Republicans, spending hundreds of hours trying to come up with a bipartisan plan to implement the recommendations of the committee. So I don't take a back seat to anybody with respect to being serious about trying to get a plan to get our debt under control because it is a fundamental threat to the economic security of the United States.
But here is what the Republican leader himself said about the effort that is underway, the bipartisan leadership effort:
[T]he discussions that can lead to a result between now and August are the talks being led by Vice President Biden ..... that's a process that could lead to a result, a measurable result. ..... And in that meeting is the only Democrat who can sign a bill into law; in fact, the only American out of 307 million of us who can sign a bill into law. He is in those discussions. That will lead to a result. That is why we have not gone to a budget markup, because we have the patience to wait for the outcome of these bipartisan leadership talks. The top Republicans are represented in the Senate, the top Republicans in the House are represented, as are the Democrats in the Senate and the House, led by the White House.
The Republican leader said this as well about the talks:
We now have the most important Democrat in America at the table. That's important. He is the only one of the 307 million of us who can actually sign a bill into law. And I think that's a step in the right direction. And the Biden group is the group that can actually reach a decision on a bipartisan basis. And if it reaches a decision, obviously we will be recommending it to our members.
That is the point. Why would we go to a partisan budget markup and refuse to wait for the leadership negotiation that is underway to succeed, when we know if they do succeed in all likelihood they will need us to do a budget markup to implement what they decide?
I have the patience. I have spent 5 years working, first, with Senator Gregg, the ranking Republican on the Budget Committee, then with all 18 members of the fiscal commission, now with the group of six--three Democrats and three Republicans--trying to put together a plan to implement what the commission recommended to get our debt under control.
I have the patience to wait a few more weeks to see if the combined leadership of this country, Republican and Democrat, working with the President of the United States, can come up with a plan to get our debt under control. We should all have that patience. We should all hope they succeed. But we are not going to be sitting and waiting. While we are hoping for a successful outcome, this Senator will continue to work with Republicans and Democrats to come up with a bipartisan plan to meet our debt threat. All of us have that obligation. All of us have that responsibility.
I thank the Chair and yield the floor.
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