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Public Statements

The Fiscal Cliff

Floor Speech

Location: Washington, DC

Mr. HARKIN. Mr. President, I was disturbed to read in the Washington Post this morning that some agreements were being made, that Democrats have agreed to raise the level from $250,000 to $450,000 and we would keep the estate taxes at the $5 million level at 35 percent.

All I can say is this is one Democrat who does not agree with that at all. What it looks like is all the taxes are going to be made permanent, but those items that the middle-class in America truly depend on are extended for 1 year--maybe 2 years at the most. I think that is grossly unfair.

We are going to lock in forever the idea that $450,000 a year is middle class in America? Need I remind people that those making $250,000 are the top 2 percent income earners in America? I know the President keeps saying he wants to protect tax cuts for the middle class, which is fine. I am all for that. If we go up to $250,000, that is a pill we can swallow because that covers everyone except the top 2 percent. Those who make $250,000 a year are not middle class. They are the top 2 percent of income earners in America.

What have we forgotten? Have we forgotten that the average income earners in America are making $25,000, $30,000, $40,000, $50,000, $60,000 a year? That is the real middle class in America, and they are the ones who are getting hammered right now. They are getting hammered with housing and rental costs, heating bills, kids going to school, and they have no retirement. Now there is talk about raising the retirement age on people who work hard every day. There are women who have been standing on their feet every day for 30 or 40 years. Are they going to raise the retirement age on them again?

If we are going to have some kind of deal, the deal must be one that truly does favor the real middle class. Those who are making $30,000, $40,000, $50,000, 60,000, $70,000 a year are the real middle class in America. Quite frankly, as I see this develop--and as I have said before--no deal is better than a bad deal and this looks like a very bad deal the way this is shaping up. I wish to make it clear I am all in favor of compromise. I have been here a long time, and I have made a lot of compromises. I am willing to make more compromises, but this is one point in time where decisions which are made on this so-called deal will potentially lock in what kind of country and society we are going to be for the next 10 years. So we better be darned careful.

If no deal is reached, then on the tax side we go back to the taxes that were enacted under President Clinton. All the Democrats who were here then voted for the Clinton tax bill in 1993. We heard all kinds of talk from the other side of the aisle of how this was going to be disastrous, kill the economy, and it was going to be awful. Not one Republican supported it, but we passed it. President Clinton signed it into law, and guess what happened. The economy took off. Unemployment came down, the economy started going, and we were paying down the deficit. We had 3 or 4 straight years of surpluses. CBO said if we continued down that path, we would pay off the national debt by 2010.

Then George Bush came into office. They looked at all the surpluses out there and said: Guess what. We have to take some of that and give it back in tax cuts, and that is what they did. That is what will end tonight. Those Bush tax cuts will end, and we will go back to the tax system we had under Bill Clinton. What is so bad about that? It worked pretty darned well. The economy was going well, and we were paying down the deficit. Things were going well under Bill Clinton and that tax system and that is what we will go back to tomorrow. What is so bad about that?

What has happened in the last 10 years is a lot of people have gotten very rich in this country and now they want to protect their wealth. That is what they want to do. They want to lock in this system on estate taxes and lower tax rates up to $450,000, $500,000, $1 million or whatever they want and they want to lock that in. I think it is time for them to start paying their fair share, as they did under the Clinton tax provisions we had in place at that time.

To go back to the tax provisions we had under Bill Clinton does not frighten me one bit, but now we hear the same song and dance from the Republicans: Oh, if we do that, the sky is going to fall, the world will end tomorrow, and the markets will go all to heck. We heard that in 1993, and they were wrong. We are hearing it again today about what will happen if we go back to the Clinton-era tax provisions. They say the sky is going to fall, and they are wrong again. They are just wrong again.

I, for one, do not fear going back to a system of taxation that basically worked very well for our country. It was the Bush tax cuts that messed everything up for 10 years and allowed a few people to get very rich but kept the middle class from advancing at all.

Again, this idea that somehow a deal is going to be cooked up and all these tax advantages people had over the last 10 years and have now in estate taxes will be permanent does not sit well with this Senator. Yet when we are talking about unemployment insurance, investments in other parts of our economy, the sustainable growth rate for our hospitals, doctors, and Medicare, that is only good for 1 or 2 years. But the tax side that lets those most privileged in our society continue to not pay the share that I think they should be paying is not a good deal. That is not fair, that is not equitable, and that is not just.

I hope those who are negotiating continue to negotiate. If there is a deal that could be made which truly does focus on the middle class and gets our estate taxes back where they were before--at some reasonable level and not at the level they are right now--then maybe we could live with something such as that. But from what I read this morning, the direction they are headed is absolutely the wrong direction for our country.

I yield the floor.

I suggest the absence of a quorum.


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