American Recovery and Reinvestment Act of 2009
Floor Speech
AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 -- (Senate - February 04, 2009)
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Mr. CORNYN. Madam President, I understand there are roughly 10 amendments pending. There is understandable concern about calling up additional amendments at this time. If I am mistaken, I am more than happy to call up my amendment. Failing that, for the time being, I would like to talk a little bit about it.
I believe it is important we pass a true stimulus package quickly. Across the Nation, we know millions of families and small businesses are suffering from the economic crisis in which we find ourselves. Many of these small businesses feel like families, and they are faced, of course, with tough choices.
Yesterday the New York Times featured a story about a small direct mail firm in Bellaire, TX, just outside Houston. Fewer orders combined with rising health care costs will force this firm to cut staff or cut benefits unless the economy turns around soon. So we must act quickly, but we must act wisely.
I don't believe the pending bill on the floor today meets that latter part of my criteria, a wise bill. The most recent Gallup poll I have seen said only 37 percent of the people in the polling sample believe the current bill would actually help stimulate the economy in a positive way. In the meantime, we would see in excess of $1 trillion of additional new deficit spending passed on to our children and grandchildren.
We have to not only act quickly, but we have to act wisely. We have to deliver a stimulus plan that will immediately benefit America's families and small businesses. We have to avoid, as well, repeating mistakes of the past that failed to stimulate the economy--and I will talk about that more in just a moment--and we have to resist the temptation, which is all too common in Washington, DC, of trying to fund everybody's wish list. We know that wish list goes on and on without end, and we need to set the right priorities, the same thing families have to do every day.
I believe one of the best ways we can stimulate our economy is to provide true tax relief to everybody who pays taxes. Rather than reprocessing those tax dollars by having Washington redistribute them to the winners and losers in the political process, why not let the people who earn the money keep more of it. We know that is a lot more efficient.
As we have seen, the new chairwoman of President Obama's Council of Economic Advisers, Christina Romer, along with her husband, did a study--she is a real, live economist. We hear economist for this, economist for that. Many are nameless and faceless. I thought how interesting it would be, instead of citing unnamed economists, if you just plugged in the word ``lawyer'' or let's say ``veterinarians.'' Veterinarians believe this, lawyers believe that. We wouldn't accept that at face value. We would want to know what it was and whether it was credible and what they are talking about.
Because we know there are economists who disagree with each other, and it is plain silly to suggest that among economists there is any consensus on these unprecedented times we find ourselves in.
But there are two economists--Christina Romer and her husband, she being the most recent chairwoman of President Obama's Council of Economic Advisers--who found in a study they published in 2007 that a tax cut of 1 percent of GDP generates real output by about 3 percent over the following 3 years, a 1-to-3 ratio. Now, that strikes me as a lot better than some of what I have seen in terms of the stimulative effect in spending, which is roughly for every $1 spent, you may get a 1.5-percent increase in growth.
AMENDMENT NO. 277 TO AMENDMENT NO. 98
Mr. President, I just received a note from staff that indicates it is all right to go ahead and call up my amendment.
Let me pause, Mr. President, and call up my amendment No. 277 and ask for its immediate consideration.
The PRESIDING OFFICER (Mr. Burris). Is there objection to setting aside the pending amendment?
Without objection, it is so ordered. The clerk will report.
The legislative clerk read as follows:
A Senator from Texas [Mr. CORNYN] proposes an amendment numbered 277 to amendment No. 98.
Mr. CORNYN. Mr. President, I ask unanimous consent that further reading of the amendment be dispensed with at this time.
The PRESIDING OFFICER. Without objection, it is so ordered.
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Mr. CORNYN. Mr. President, simply stated, the amendment I offer today is based on the experience of what works. We have been presented all sorts of economic theories, some of which I have even bought into because I thought the smartest people on the planet knew more than I did, and perhaps I had to have faith in some of these smart people. But we know based on experience, not just based on faith, that this amendment will work to stimulate the economy.
This amendment cuts the income tax rate in the lowest tax bracket from 10 percent to 5 percent, so it will immediately help some of the people who earn the least amount of money in our society, and it will in fact help all working Americans immediately. Currently, married couples pay a 10-percent tax on income up to $16,050, which is roughly $8,000 for a single tax return. They pay a 10-percent tax on that now, and my amendment would cut it to 5 percent. That would put about $500 per year back into the family budget, or roughly the same amount as the provisions in the current bill known as the ``Making Work Pay'' refundable tax credit. And I will talk about that in a minute. But this amendment would provide meaningful tax relief to more than 105 million Americans--to everyone who must file a tax return by April 15.
This amendment would provide an immediate economic stimulus and jolt to our economy and would show the American people and the global financial community that we are serious about delivering an economic stimulus that will actually work. Isn't that the first question we ought to ask: Will it work? This one will work, because experience proves it. This amendment will cut the size of this $1 trillion bill by about $25 billion because it replaces the so-called ``Making Work Pay'' refundable tax credit.
Now, the refundable tax credit, so everybody understands, is not like the usual credit against income. This is cash money paid by the Federal Government to a person whether they pay income taxes or not. In fact, what it amounts to is taking money from people who do pay taxes and giving it to people who don't necessarily pay taxes. It represents a huge transfer of wealth. But even worse, in this bill it represents a repetition of the failed stimulus bill that we voted on roughly 1 year ago.
I am sorry to say now I was one of those votes in favor of that stimulus bill. That is in the category of what I described earlier, where I believed the smartest people on the planet were telling us we had to spend this $150 billion-plus. And we had bipartisan support for the bill. We borrowed $150 billion or so from our children and grandchildren. In other words, we added it to the Federal deficit. You know what kind of impact it had? It had zero, zip, nada, no impact on the economy, other than to rack up another $150 billion in debt for our children.
So this refundable tax credit, if passed in its current form, represents a repetition of what we know will not work and which will in fact make our economic situation worse. It will represent a $46 billion transfer of wealth to folks who don't pay income taxes in the first place. We should provide tax relief in a straightforward and transparent way to all taxpayers who owe income taxes. In other words, this amendment is about providing tax relief for taxpayers which, according to Ms. Romer, is the most efficient way to get our economy moving again, and one that will not pick winners and losers here in Washington, DC, after Congress takes its cut, but allows it to be kept by the people who earned it in the first place.
I ask my colleagues to support this amendment when we have an opportunity to vote on it later on. This is, once again, amendment No. 277, and I urge my colleagues to support it.
Mr. President, I yield the floor.
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AMENDMENT NO. 277
The PRESIDING OFFICER. Under the previous order, there will now be 2 minutes of debate equally divided prior to a vote in relation to amendment No. 277 offered by the Senator from Texas, Mr. Cornyn.
The Senator from Texas is recognized.
Mr. CORNYN. Mr. President, my amendment reduces the 10-percent marginal income tax bracket to 5 percent--10 percent to 5 percent--in 2009 and 2010. Currently, the 10-percent tax bracket that was created in 2001 by the Economic Growth and Tax Relief Reconciliation Act applies to the first roughly $8,000 that a single taxpayer earns and $16,000 for a joint tax return. My amendment provides broad-based relief to more than 105 million taxpayers, including every hard-working American with an income tax liability.
My amendment does not add to the bill's total. Instead, my amendment is paid for by striking the refundable making work pay credit which picks winners and losers by providing relief to only a select group of taxpayers. It also, I might say, repeats a mistake we made last year, or earlier--I guess last year, last January--when we spent $150 billion of our children's and grandchildren's money to try to stimulate the economy, and everybody agrees it did not work.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. CORNYN. I ask my colleagues to support the amendment.
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