Intelligence Authorization Act for Fiscal Year 2007--Motion to Proceed

Floor Speech

INTELLIGENCE AUTHORIZATION ACT FOR FISCAL YEAR 2007--MOTION TO PROCEED -- (Senate - April 12, 2007)

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BUDGET

Mr. GRASSLEY. Mr. President, 2 weeks ago we passed the budget resolution in the Senate. One week after that, the House passed their budget resolution. So we are in a position of being conferenced between the House and the Senate on a budget resolution, and I thought at this point I ought to give some updates, particularly as it relates to the work of the Committee on Finance, and particularly as it relates to the issue of taxes and an impending tax increase that is out there--tomorrow, almost--a few years away if we don't do anything to stop the biggest tax increase in the country, or that will be, in fact, the biggest tax increase in the country.

So as the budget resolution slowly works its way through Congress, one especially important issue wrapped up in this whole great big budget resolution and document is the longevity of the bipartisan tax relief that was enacted in 2001 and 2003, and this very day those tax decreases for working men and women are still in place and will be in place through the year 2010. It has always been my goal, when you have Chairman Greenspan saying that this tax relief for working men and women is the reason the economy has rebounded, that we should continue this tax relief into the future, because if it is the goose that laid the golden egg of 7.8 billion new jobs being created since the recession, then we ought to keep that golden egg working for the American taxpayer.

Some people may not give the contents of a budget resolution much consideration since it does not get signed into law by the President but is merely a set of guidelines for tax and spending decisions that apply to Congress as we make permanent law and as we make decisions on tax policy for the future. Those tax and spending decisions must go to the President for his acting on them and then become law.

For this reason, along with anyone who supports tax relief, we are very concerned about the budget resolutions passed by the Democratic majorities in the House and Senate that are now in conference. Yes, this is a Republican Senator. I am in the minority now since the last election. So I want to raise these concerns as a responsibility of the majority and to alert the American people about what the majority might be up to, or if they are not up to it, what the consequences are if nothing happens.

This concern is derived from the fact that the two budget resolutions--the one in the House and the one in the Senate--do not provide for the extension of tax relief beyond 2010. What does it mean when I use the words the budget resolutions do not provide for ``the extension'' of tax relief beyond 2010? That means, if Congress takes no action, we will have the biggest tax increase in the history of the country, and we will have that tax increase without even a vote of the Congress.

For the first time in more than 6 years, Congress is sending a message, then, that there is no guarantee of continued tax relief. In fact, the Democratic budget resolutions say the very opposite. The budget resolution passed by the Senate only provides 44 percent of the revenue necessary to extend these popular, bipartisan--and let me emphasize bipartisan--tax relief bills of 2001. Mr. President, 44 percent is not enough, but that 44 percent is more than the big fat zero percent in the House-passed budget resolution. The House-passed budget resolution provides no revenue room for the extension of tax relief, meaning that the majority of the House of Representatives right now is taking a position on the budget to let the biggest tax increase in the history of our country go into effect without a vote of Congress.

What does that mean, besides the biggest tax increase in history? It means things such as no tuition deduction for people sending their kids to college, no teacher deduction for the supplies the teacher might buy out of their own pocket. Those are just a couple of popular items that would expire at that particular time that would be a small part of the biggest tax increase in the history of the country, happening without the vote of the people.

I would like to think that I am an optimist, but in conferencing two resolutions, which cover 44 percent on the part of the Senate and zero percent on the part of the House, I am doubtful of reaching a number greater than the already inadequate number of 44 percent provided in the Senate. This stands in stark contrast to the budget that the President submitted this February and to the budgets the President has submitted over each of the last 6 years. All of those budgets provided the revenue room to make bipartisan tax relief permanent. In other words, the President is asking Congress to take action so that the biggest tax increase in the history of our country would not happen; and if it did happen, it would happen without a vote of the people. He thinks that Congress making a decision for tax relief for working men and women provided the incentive, according to Chairman Greenspan, for the economic recovery--and we have now created 7.8 million new jobs--and ought to be made permanent tax policy. In other words, don't kill the goose that has laid the golden egg.

The Democratic budget resolutions can be best represented by a chart that I have here which shows that in terms of the guaranteed tax relief proposal, they amount to a big goose egg for the American taxpayer. We have it right here on the chart. That is a big fat zero. If they are lucky, I suppose college-bound taxpayers could sell this goose egg back to the Democratic leaders in the House and Senate because they will need the money if they are not able to deduct the cost of tuition.

What is even more inexplicable than the Democrats' failure to extend the popular and bipartisan tax relief enacted in 2001 and 2003 are some of the reasons given. The chairman of the Budget Committee this year basically said that since the Republicans wrote that law--forgetting that it was bipartisan in 2001; how clever to ignore that fact--it is our problem. The leftwing of the blogosphere has echoed that message of the Democratic leadership.

In regard to the left side of the blogosphere, I will briefly describe two posts my staff found on the Internet. The first comes from a scholar of government who posts the Daily Kos under the name of ``piec.'' I may be mispronouncing that, and if so, it is unintentional.

According to piec's analysis, the Tax Increase Prevention and Reconciliation Act of 2005, which was signed last May by President Bush, was a ``poison pill'' designed to sabotage the economy to increase the prospects of Republican candidates in 2012. The argument seems to be that having popular and bipartisan tax relief from 2001 and 2003 all sunset at the end of 2010 would cause such an economic mess that the Democrats, assumed by the blogger, piec, to be in power at that time, will take the blame and suffer at the polls.

Wouldn't it have been nice if I could think as chairman, when we wrote that bill, that I was smart enough to see ahead from 2001 to 2012? Thank you, piec, for giving me that credit. But I didn't know that. We passed it because of the rules in place at that particular time. It had to sunset.

Another observer of Government posted comments under the name of ``Blue Bunting'' to the ``Care2 News Network.'' In a posting titled ``The Monster Republican Tax Hike,'' Blue Bunting says that the ``Republican Congresses chose not to make their tax cuts ..... permanent.'' Her argument seems to be that Republicans put sunset clauses in a bill solely to improve the long-term budget projections and that responsibility for the expiration of tax relief rests completely with the Republicans, even though the Republicans are in the minority. The implication is that by lowering taxes, Republicans are responsible for a tax increase that would occur when the Democratic majorities control both Houses of Congress, even though taxes coming in from all the taxes that the Federal Government collects run to a 50-year average of what they have been, 18.6 percent of GDP. If it has been that way for 50 years, what is the problem?

Now, these blogs I have just referred to, these commentaries, are available to anyone if you want to read them online. But to make it easier, I ask unanimous consent that they be printed in the Congressional Record.

There being no objection, the material was ordered to be printed in the RECORD, as follows:

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Mr. GRASSLEY. To begin with, it is completely ridiculous to suggest that President Bush and Republicans in general did not intend or desire the permanence of tax relief. President Bush and my party generally have favored permanence of tax relief--not just because it brings in less money, but because permanence of tax policy--when investors and laborers can depend on the tax policy, you are going to get better planning long term. It is better for the economy.

Mr. President, you need to look no further than the budgets to which I have referred. The administration and the Republican Congress have budgeted for an extension of the bipartisan tax relief provisions. That action has affected the bottom lines of these budgets. And as we heard over and over again, the Democratic leadership, the liberal think tanks, and sympathetic east coast media have criticized the bottom lines of those budgets. So the Democratic leadership, the liberal think tanks, and the sympathetic east coast media cannot have it both ways. We are not going to let them have it both ways. They cannot shut off the bipartisan tax relief, take credit for the supposed deficit reduction, and also claim that there is tax relief in this budget that passed the Senate 2 weeks ago and the House a week ago.

Getting back to the blog I referred to, the Daily Kos, one posted as ``Ortcutt'' agrees with this point. Ortcutt, however, incorrectly identifies the purveyor of the phony logic. The blogger puts it on Congressional Republicans and President Bush. As the hard, cold numbers in the Democratic budget resolutions and floor debate in the Congressional Record show, Democrats claim that expired tax relief is not a tax hike. Let me emphasize that.

Are we going to let people get away with that, when they know what the law is on December 31, 2010, and the biggest tax increase in the history of the country is going to happen, without a vote of the people? And when that happens, they are saying it is not a tax hike?

Surely, they don't think the American people are that stupid. The Democratic leadership are the folks trying to claim that their budgets, which don't provide the revenue room for expired tax relief, don't contain tax hikes. Hogwash.

I ask unanimous consent to have printed in the Record the Ortcutt comment.

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Mr. GRASSLEY. Mr. President, responding to another criticism, it is completely off the mark to say the tax relief bills were written by Republicans. It is almost as if the Democratic leadership is saying that tax relief was passed by a National Republican Congress and not by the Congress.

The 2001 bill was written by a bipartisan majority and was opposed by a partisan minority led by the Democratic leadership. The conference report to accompany the law that was entitled the Economic Growth and Tax Relief and Reconciliation Act passed the Senate on May 26, 2001.

I ask unanimous consent that the information pertaining to that rollcall be printed in the Congressional Record so we can show it was a bipartisan rollcall.

There being no objection, the material was ordered to be printed in the Record, as follows:

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Mr. GRASSLEY. Mr. President, the 2001 tax relief bill passed the Senate with 58 yeas. At that time, the Senate was evenly divided--50 Republicans and 50 Democrats--with the Republicans technically having control because of the Vice President's vote. However, not every single Republican voted for that tax relief measure. Those 58 yeas included 12 Democrats, nearly one-quarter of the 50 Democrats sitting in the Senate at that particular time. If all of those Democrats had voted against the conference report, it would have failed.

Clearly, it is ridiculous to say this was purely a Republican bill. Given the experience the Democratic leadership has had with cloture votes in the past few months, I would expect them to appreciate the necessity of working on a bipartisan basis in this body. This is the only political institution of our system where minority views are protected and must be respected because of no limit on debate, called a filibuster, and it takes 60 percent, a supermajority, to overcome a filibuster to get to finality. That is where Democrats were protected when they were in the minority for the last 6 years. This is where Republicans are going to be protected for the next 2 years--and hopefully no longer than 2 years--as a minority.

It takes 60 votes to get permanent tax relief. The bottom line is, we didn't have the 60 votes in 2001 and 2003 for making these bipartisan tax relief plans permanent. And with a couple exceptions I will discuss shortly, over the last 6 years, we haven't had the 60 votes for permanent tax relief.

So tax relief in 2001 was not made permanent because the Democratic leadership and the liberal core of the Democratic caucus have refused to support permanence, and that is apparent now more than ever with the budget that is in conference between the House and Senate.

Of course, last November, the Democrats won control of both Houses of Congress. I wonder if the House Democratic leadership will be sending over any bills to make tax relief permanent. I doubt it. Even if the House Democratic leadership did send over such a bill, I would not expect the Senate Democratic leadership to take it up. When in Republican hands, the House regularly sent over bills to provide permanence for various components of the bipartisan tax relief bill which they couldn't get through the Senate.

Senate Democrats are clearly capable of working with Republicans to make tax relief provisions permanent if they like what they want to make permanent. And we have done it in the past. The Holocaust Restitution Tax Fairness Act of 2001 repealed the sunset of a provision originally contained in the 2001 tax relief bill that allowed Holocaust survivors and their heirs and estates to receive restitution payments tax free. Making this provision permanent was absolutely the right thing to do, and the fact that it passed the Senate by unanimous consent proves that, and it passed it during a period when the Democrats controlled the Chamber, indicating the level of cooperation that occurred between Senate Republicans and Democrats when Democrats want to make a provision of the tax law permanent law.

As I go through these examples, everyone needs to remember that holding the majority in the Senate is not a ticket for either party to force its agenda down the other party's throat. Senate rules encourage cooperation by giving the minority many opportunities to check the majority, and this becomes even more evident when those majorities are very slim as they are right now--51 Democrats, 49 Republicans. And they have been very slim for the last several Congresses.

I say this to point out that the Holocaust Restitution Act became permanent because Republicans and Democrats worked together to make it permanent, and it would not have been sent to the President if one side or the other wanted to block it.

I will give one more example that occurred last summer as part of the pension reform bill. We call that the Pension Protection Act of 2001. It passed the Senate 93 yea votes and made permanent--now here we have bipartisan cooperation to make permanent other parts of the tax bill--the retirement security provisions of that 2001 tax bill. Even if every Republican supported the bill, a united Democratic caucus could have held back the five additional votes needed for final passage if they chose.

Clearly, Democrats have a record of working with Republicans to make tax relief provisions permanent when they choose to do it. So why not work in the same way to make the rest of that tax law of 2001 and 2003 permanent so we don't have the biggest tax increase in the history of the country without a vote of the American people, so we will have permanence of tax law, so working men and women can plan on the future, so investors who create jobs can plan on the future as well? That is better for the economy.

Let me return to the present day. The House and Senate, then, as I have said so many times, passed separate budget resolutions, now in conference, but currently would end up subjecting Americans to the largest tax increase in history, and the Democrats have responded by basically declaring it is not their responsibility. How can a majority so avoid the responsibility of being a majority?

The Democratic leadership and the liberal core have the power to make these provisions permanent. I assure my colleagues we will be there working with them as we did on the retirement portions of the pension bill, as we did on the Holocaust relief bill, to make sure it becomes permanent law.

I think they should, but I realize they may not agree with me. However, if they do let tax relief expire, they have to take responsibility for letting that happen. They have to take responsibility for the biggest tax increase in the history of the country happening without a vote of the people when they would have had the cooperation of Republicans to make sure it was permanent and to make sure this biggest tax increase doesn't happen.

Several times since November, I have heard that elections have consequences, and one of those consequences is for the winner having increased responsibility. Since Democrats have made tax relief provisions permanent in the past--and I have given only two examples--they can likewise do it again, and they will have Republican cooperation to make it happen.

One of the bloggers I cited earlier points out the economic calamity that would befall our country if all tax relief was allowed to expire at the end of 2010. On this specific point, he is correct, and I gave a speech to this effect right here on this floor on March 1 where I cited a study done by the Wall Street firm of Goldman Sachs.

If something is not done to extend or make permanent tax relief before the end of 2010, American families, working families, will be hit with a wall of tax increases that is currently built into the Democratic budget resolution.

I have a chart. This chart shows, according to the U.S. Treasury, not according to this Senator from Iowa, a family of four with $40,000 of income will be subjected to an average tax increase of $2,052 all at once. The Democrats, now in the driver's seat, need to decide whether they are going to let that wall go up, whether that wall is going to stand between this taxpayer and more money for them to spend instead of more money for me to spend for them, or are they going to take advantage of the opportunity we give them to cooperate to prevent that big tax increase of 2,000 and more dollars to go into effect for a family with an income of $40,000, as though there is something about being rich making $40,000 a year.

I want to conclude with a reference to a story about a man who cared a great deal about the typical taxpayer, President Ronald Reagan. During the Cold War, while in West Berlin, President Reagan challenged Soviet President Gorbachev to tear down the Berlin Wall. I challenge the Democratic leadership to tear down the wall of tax increases built into their budgets. I hope my liberal friends in the core of the Democratic caucus will urge the Democratic leaders to tear down the wall of tax increases they have built. This is not a wall Republicans built. This is a wall Democrats through their budget built because they have the power, they have a minority that is willing to cooperate with them, as we have on two other instances I have given in these remarks. Join with us in the Republican conference and tear down the wall of tax increases that has been built.

I yield the floor.

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