American Jobs and Closing Tax Loopholes Act of 2010
Floor Speech
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Mr. THUNE. Mr. President, the amendment I offer is cosponsored by Senators McCain, McConnell, BOND, COBURN, ISAKSON, and ROBERTS. It is an alternative to the legislation that is under consideration by the Senate today. That is the tax extenders bill that was the subject of some debate last week, that we will continue to do this week, perhaps into next week. I am not sure exactly when it will conclude.
What my amendment does is present an alternative because the amendment under consideration that has been offered up by the Democratic majority here in the Senate adds almost $80 billion to the Federal debt, it raises taxes by $70 billion, and increases spending by $126 billion.
To put that into proper context, it is important to remember that we have a current $13 trillion debt. The amount of publicly held debt is $8.6 trillion, but if you include the amount of debt owed between intergovernmental agencies, intergovernmental debt is $13 trillion that our government owes and is in debt.
What has been proposed by the other side is in direct contradiction of some legislation that we passed here a few months ago that suggested everything we were going to do around here, or almost everything, was going to be paid for. It was called pay-go. We passed the pay-go rules. It was highly touted at the time. There was great fanfare associated with the passage of pay-go rules that would insist when there is new spending or tax cuts that those be offset by some spending cuts or some combination of tax increases that would make sure there was no net impact on the deficit.
What is happening here is the exact opposite of that because what we are seeing happen with the legislation that is before the Senate today is, if in fact this bill were enacted and became law, it ends up being about $200 billion in new debt, debt we have added to the public debt since pay-go has been enacted.
I appreciate the Senator from Nevada, the majority leader, yielding back time so I can continue to speak about this amendment. I understand the process for consideration of this legislation will now be somewhat truncated if in fact cloture is invoked. I suspect it will not be long now we will be having a vote on that. But I hope my colleagues will defeat the motion to invoke cloture until such time as we have had an opportunity to debate many of these important amendments.
Clearly I believe the amendment I am discussing right now is one we need to vote on. I suspect there will be others of my colleagues who will want to offer amendments that I hope we will be able to debate and vote on before this legislation moves forward.
The point I wanted to make is this. Since the enactment of the pay-as-you-go rules here in the Senate, about $200 billion, if the current legislation on the floor today is enacted, will have been added to the Federal debt. That is $200 billion which we hand to our children and grandchildren to pay, notwithstanding what we have said publicly here in the Senate a few months ago, that all these things are going to be paid for and we are now going to be serious here in the Senate and in the Congress about making sure we are not piling more and more debt on future generations. That is completely contradicted by the legislation we will be voting on here in the near future on this tax extenders bill because it does increase the debt by almost $80 billion and, as I said earlier, raises taxes by almost $70 billion.
What I offer is an alternative to that approach. What this alternative does is, rather than increasing and raising taxes, it reduces taxes by $26 billion, it cuts spending by $100 billion, and it reduces the debt by $55 billion. So instead of more spending, more taxes, and more debt in the middle of an economy that is trying to get back on its feet and create jobs, my alternative and the one I will offer on behalf of my colleagues--who, as I mentioned earlier, are cosponsors of this amendment--will in fact reduce spending, reduce taxes, and reduce debt.
I think that is a good deal for the American taxpayer. I think it strikes at the very heart of what we ought to be focused on, which is job creation. We hear the other side talk a lot about job creation, but when it comes time to create jobs, you cannot find many policies coming out of
Washington, DC, today that actually are additive when it comes to job creation. In fact, as I said earlier, it is just the opposite. You have a massive new health care entitlement that, when it is fully implemented, will cost $2.5 trillion over 10 years, which in my view will add enormously to the Federal debt because of all the double counting that was used to understate the true cost of that legislation; you had a trillion-dollar stimulus bill passed a year ago which was totally put on the debt for America's future generations; you have now discussion of a new energy tax in the form of some cap-and-trade legislation that could come before the Senate in the next few months--and you just go down the list. At every turn, what this Congress has done in the last several months, in the last year and a half since the new administration came to office, is to increase taxes, to increase spending, to increase debt, and to increase the size and the scope of government. We continue to see this effort to expand government. When we expand government, obviously it takes more revenues to fund that government, create new bureaucracies--which is what we will see with regard to the health care legislation--and in the end takes more and more of those dollars out of the private economy where the real permanent job creation should be occurring.
Instead, what we should be focused on is creating incentives for small businesses to create jobs. Rather than creating more government, expanding the size of government here in Washington, DC, we ought to be looking at what we can do to provide incentives for the economic engine in our economy--and that is our small businesses--to go out there and do what they do best, which is create jobs.
But what you hear from small businesses not only in South Dakota but all across the country is there is so much policy uncertainty coming out of Washington and there is so much concern about the spending and the debt and the taxes, that a lot of the small businesses that might be making investments that would create jobs--hire new personnel, hire new people, buy a new piece of equipment, make capital investment--are sitting on that investment for fear the next policy to come out of Washington, DC, could be a new energy tax, it could be higher taxes. We all know starting next year you are going to see higher taxes on dividends, higher taxes on capital gains, higher taxes on marginal income, unless Congress takes steps to extend some of these expiring tax provisions.
That being said, what we are doing here today is we are going to make matters that much worse. If you are a small business person in this country, if you are someone who is in this economy and is concerned about Federal debt, is concerned about Federal spending, is concerned about taxes, then the legislation that is before the Senate right now, if adopted, is going to add, as I said earlier, another almost $80 billion to the Federal debt, will raise taxes by $70 billion, and increase spending by $126 billion.
There is a better way. That is why I offer this amendment. This amendment does a number of things. It reduces spending in a number of areas. It deals with some of the provisions of expiring tax law that everybody here agrees needs to be fixed. There are things both sides agree on. Both Democrats and Republicans here in the Senate believe it is important that we extend unemployment insurance for those people who have lost jobs in the economy. Both Republicans and Democrats think it is important that there are certain expiring tax provisions that need to be extended--a research and development tax credit, for example, is one thing that comes to mind. But there is a whole list of these expiring tax provisions that need to be extended that both sides agree should be done.
The difference in how we go about doing that is I think what is going to be the difference in the amendment that I offered versus the underlying legislation. Again, what I will do is reduce Federal spending and address the expiring tax law, the need to extend unemployment insurance in a way that does not raise taxes, add to the debt, and increase dramatically Federal spending in this country.
What does the amendment essentially do? Very briefly, it includes all the major priorities that both parties want to accomplish but it drops the spending that has been rejected by the Senate. It would eliminate the $24 billion that is in the Senate bill that was not in the House bill that deals with the bailout for States around the country. It does offer, by the way, an additional year of the so-called doc fix. There has been a lot of discussion here about extending the doc fix into the future.
And the underlying bill the Democratic majority has put forward does extend the doc fix. The reimbursement physicians receive under Medicare would drop dramatically if nothing is done by Congress to address that, and both sides agree that needs to be addressed. Frankly, it should have been done during the health care debate, but it was not. So the underlying bill, the majority Democratic bill before the Senate, would extend the doc fix through the end of 2011.
What my alternative amendment would do is extend the doc fix through the end of the year 2012. So you get an additional year for the doc fix. That is something physicians around the country are interested in, and I know for a fact that it is because my physicians in South Dakota--and I am sure most of my colleagues hear on a regular basis from their physicians around the country.
It drops all the tax increases in the bill, including carried interest, the tax on professional service S corps, the international provisions, and the increase in the per-barrel tax that funds the Oil Spill Liability Trust Fund that will raise gas prices for consumers around the country.
The alternative amendment I filed is fully paid for with spending cuts. It offers more than $100 billion in savings by actually doing what the American people want; that is, reducing spending. Every American is dealing with a tough economy. A lot of Americans have lost jobs. A lot of Americans certainly have lost income. A lot of Americans have seen their net worth plummet as a result of the economic circumstances in which the country finds itself. So they are all making hard decisions. They are sitting around the kitchen table and they are having these discussions with their family about what part of their budget to cut or what they are going to have to do without. The only place where that hasn't been true is here in Washington, DC. Why shouldn't we, as the leaders of this country, be willing to make the hard decisions that every American family is having to make?
Well, this legislation does that. It takes $37.5 billion of the $50 billion in unobligated stimulus funds and uses that to extend existing tax and benefit provisions. It cuts money from the government by reducing congressional budgets right here close to home. We ought to have to do what every American family and what every American business is having to do right now; that is, make some hard decisions and reduce our own spending. So it does reduce congressional budgets.
It rescinds unspent Federal funds, those funds that have been appropriated but not spent. It requires the government to sell unused land and auction off unused equipment. So it generates some additional revenue that way.
It imposes a 1-year freeze on the salaries of Federal employees and eliminates their bonuses, and it caps the total number of Federal employees at current levels. In other words, the Federal Government can't continue to grow and expand at a time when we see a lot of our businesses around this country having to lay workers off or cut back their hours. It collects $3 billion in unpaid taxes from Federal employees.
It encourages responsibility and prioritizing by requiring a 5-percent across-the-board discretionary spending cut for all agencies except the VA and the Department of Defense. So 5 percent across the board for all agencies except VA and DOD. And we think, again, that is an important step to take if we are serious about getting our own spending under control and addressing what is a very serious problem for the future of this country; that is, the ballooning Federal debt, the continual growth of government and spending and taxes.
It saves $5 billion by eliminating nonessential government travel, and it eliminates bonuses for poor-performing government contractors.
Finally, it adds a new deficit-reduction trust fund where rescinded balances and money saved through this amendment will be deposited for the purposes of paying down the Federal debt.
This amendment ought to be a no-brainer for all of our colleagues in the Senate because it reduces the deficit by over $50 billion; it cuts spending by over $100 billion; it extends the existing tax law, the provisions we have all talked about that both sides think are important; and it provides 6 more
months of stimulus unemployment benefits for those who have lost jobs in our economy.
As I said earlier, that is the exact opposite of the approach taken by the Democratic majority, which is, as I said before, the way they finance all of these things is through $70 billion in new taxes. Again, many of those taxes are going to hit squarely on our small businesses, which are the economic engine and the job creators in our economy and are going to hopefully lead us out of this economic malaise and get us on to times where we are growing and expanding and creating more and more jobs. And it adds $80 billion to the Federal debt, which, as I mentioned earlier, is at $13 trillion. If you include all of the Federal debt--that amount held by the public, held by foreign countries, held by people here in this country--and then you add in the government, the intergovernmental debt that is owed to various agencies of government, we are at $13 trillion and counting.
In fact, if you look at the trajectory going into the future, we are talking about doubling and tripling that debt, doubling it in 5 years and tripling it in 10. And we are going to get to the point where over 4 percent of our entire economy is spent just paying interest on the debt.
Think about that. Over 4 percent of our entire economy--we have a $14 trillion economy--would be spent just paying for interest on our Federal debt. There is going to come a point, 10 years out from now, when the amount of money we have to spend to finance our debt, to pay for the interest on the debt, exceeds the amount we spend on our military. Think about that. We would spend more financing the debt we owe, spend more on interest payments on the debt we owe, than we actually spend on our national security. That is a staggering thought, if you think about it. That is what we have to try to avoid. The only way we do that is by getting serious and starting here and starting now.
My colleagues on the Democratic majority side have said that because they passed pay-go, now we are on a different path; it is a different set of rules, a new sheriff in town; we are going to deal with these issues differently. But unfortunately what we are seeing is the same pattern, the same old way of doing things, which is to declare everything an emergency, borrow the money from China, and hand the bill to our children and grandchildren. It is time that stopped. This amendment gives us an opportunity to do that.
To put things into perspective because I think sometimes these numbers get to be very abstract, and you listen to politicians get up and talk about debt and spending and deficits and that sort of thing, and it is hard to kind of comprehend, if you will, the dimensions we are talking about--I mean, $13 trillion. It is hard to even contemplate what $1 trillion is. So just to put that into proper perspective, if you were to equate a dollar to a second, how much is 1 trillion seconds?
I spoke at Boys State a week ago or a little over a week ago now, and I asked the Boys Staters to sit down and do the arithmetic and to figure out how much 1 trillion seconds is because I think it helps put into perspective how much $1 trillion is. It is hard to even wrap your mind around what $1 trillion represents. But if you equate that to 1 trillion seconds, 1 trillion seconds is 31,746 years--31,746 years. That is what 1 trillion seconds represents.
Well, we are not $1 trillion in debt; we are $13 trillion in debt. How much is 13 trillion seconds? Over 412,000 years. Over 412,000 years. If you were to help people understand and put it in a certain perspective, that is the amount of money--the $13 trillion that we now owe, that is today. As I said before, if you look at the publicly held portion of that, we are expected to double that in 5 and triple it in 10 years.
It took us 200 years of American history to get to $1 trillion, and we have exploded that. If you look at the trendlines and where we are headed as a nation, it is a very, very scary thought. It should be scary to all Americans, and I know it is. It certainly should be scary to the Members of this Chamber. That is why, every time we deal with a major piece of legislation, foremost in our mind ought to be, how is this going to impact the fiscal balance sheet of this country? How is this going to make the next generation--how is it going to improve their standard of living, their quality of life? What is it going to do to them? Are we going to be the first generation to bequeath to the next generation a lower standard of living and a lower quality of life because we haven't been willing to make the hard choices and to make the hard decisions that are so essential if we are going to get our country on a fiscal path?
This amendment does address the issues on which both sides agree. It addresses the issue of extending expiring tax provisions that many people on both sides care about. It extends unemployment insurance until the end of the year. It does extend the doc fix beyond what the base bill does. The base bill extends it through the end of the year 2011. What this amendment would do would be to extend it to end of the year 2012.
So we have an opportunity for Senators to take a vote and to let everybody know, let their constituents know whether they are serious about getting spending under control; about making sure we are doing everything we can to create the right economic conditions for job creation, and by that I mean keeping taxes low on small businesses, not raising taxes by $70 billion, which is what this bill does; and whether we are serious here in Washington, DC, about listening to the American people and what they are saying with regard to spending. They want us to cut federal spending. They want us to do what they are having to do in their family budgets and in their small business budgets. What every American is now having to deal with is becoming more fiscally responsible, dealing with austere measures that will keep them from having to go deeply into hock or into bankruptcy. We are doing that here--we are going into bankruptcy. We just have the luxury here in Washington, DC, of being able to continue to borrow and borrow and put it on the credit card and hand the bill to our children and grandchildren. It is time for that to stop. It can stop with this amendment.
I hope that as we continue debate on the underlying bill and get votes on those amendments, my colleagues in the Senate will do the right thing for the future of this country and start to get spending under control and start to pay for what we continue to borrow for so that we are not piling more and more debt on future generations.
I yield the floor, and I suggest the absence of a quorum.
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