Federal Aviation Administration Extension Act of 2010--Continued

Floor Speech

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Mr. THUNE. Mr. President, I also wish to join with my colleagues today before I speak to the issue of the day and express my appreciation to Senator Gregg for his great service to this institution and to our country. I think it is fair to say there is nobody quite like Judd Gregg. He truly is one of a kind.

I remember when I first got here, I thought he didn't like me, and maybe he didn't like me, but I concluded that part of that was just his serious demeanor. He is a guy who means business. Once you get to know him, you not only appreciate that side of his personality, but you also gain an appreciation for the incredible wit and sense of humor he also possesses. I have had the opportunity to experience that on many occasions.

I think what the institution is going to miss the most--he is certainly someone who cares a lot about this country's future and the policies we put in place--is his abilities, his great skill and his great talent. It will be a real loss to the Senate because Judd Gregg has a mind like a steel trap. He is able to analyze with great effectiveness the issues of the day and to explain them clearly. He is someone in whom I have tremendous respect. He has been a great mentor, a great leader, and someone, as I said before, we are going to miss around here.

I can't say enough about how much I appreciate his service and the service and the sacrifice his family has made. He has served in public life for many years, both as a Congressman, Governor, and a Senator. His wife Kathy, similar to many of our wives, puts up with a lot of things. Judd, similar to me and many of my colleagues, I think, I would say probably married over his head or, as one of my friends said, outpunted his coverage. But we are grateful to his family.

We are going to miss the many contributions he has made, but probably none more than the passion with which he approaches this job and the passion with which he approaches building a brighter and better and stronger and more prosperous future for future generations. There has been no clearer voice on the issue of fiscal responsibility, no clearer voice when it comes to the important task we have in front of us, to insist that we take steps and we put policies in place that will make the country stronger and better for future generations.

So I wish to compliment as well my colleague from New Hampshire. I have heard from folks from other parts of the country. As someone who comes from the Midwest, I wish to say how much I appreciate Judd Gregg, the incredible contribution he has made, and I, similar to so many others, will miss him greatly.

Mr. President, let me, if I might, speak to the issue before us today. We are debating a tax proposal, and on January 1 of 2011, just 17 days from now, families and small businesses across this country are going to see their taxes go up if Congress doesn't take action on the tax relief proposal that is currently before the Senate. There are elements of this proposal I don't like. I think it is fair to say there are a lot of us here who, if we were able to write this, certainly wouldn't have written it in the fashion we have in front of us today. But letting the perfect become the enemy of the good will result in one thing and one thing only; that is, higher taxes across America in 2 weeks.

It is easy to stand on the sidelines and to criticize this proposal, and it is perhaps even politically expedient to stand on the sidelines and criticize this proposal.

But let me make one thing very clear. Advocating against this tax proposal is to advocate for a tax increase, and that is something we cannot and the American economy cannot afford.

It would be great if we could wait a few weeks, until we have a changeover in the Congress. Frankly, I would be very happy to see a bill written a few weeks from now when the newly elected Republicans are going to be sworn in. But that is a luxury that doesn't exist because of this reality that we have--this deadline looming in front of us. If we wait for the perfect proposal, the perfect agreement, then American families and small businesses are going to pay higher taxes just 2 weeks from now. That is not a scare tactic, that is not political posturing, that is simply a fact.

Taking action now to prevent this tax increase would do a number of things. First, it would protect 21 million households from being hit by the alternative minimum tax in the year 2010. It would preserve relief from the marriage penalty. There are many provisions of the Tax Code today--some of which have been addressed in previous tax law, expiring tax law--that lessen the impact of being married. Ironically, in the Tax Code, we punish people for being married in this country. Taking action now would prevent job-killing tax increases on many of our small businesses across this country, and it would protect farmers and ranchers from the death tax that would confiscate over half the value of the family farm.

What happens if we don't pass this tax proposal? Well, according to a number of economists, we would see a drop in the gross domestic product from somewhere between 1.7 percent to 2 percent. That is according to a number of private economists. Even the Congressional Budget Office suggests we would see about a 1.4 percent negative impact in our economy, in the gross domestic product, if we don't take the action necessary to prevent these tax increases.

Failure to act now, according to the Tax Foundation, with regard to my State of South Dakota, would cost the average family in South Dakota about $1,700 a year in higher taxes. The average American household would be faced with higher taxes to the tune of about $3,000. If we don't take the steps that are necessary to address the death tax on January 1, the death tax kicks back in at $1 million--a $1 million exemption--and everything above that would be taxed at 55 percent. So imagine the impact on a farmer, a rancher, a small businessperson in this country, who is trying to pass on that operation to the next generation, and what this would mean in their ability to do that.

As I said earlier, this is not a perfect agreement, but no compromise is. The fact we are dealing with Democrats, who still run both the House, the Senate, and the White House, if we want to stop taxes from going up on everyone, then we are going to have to figure out a way to get that done. And if we stand around trying to debate the perfect, then taxes are going to go up on families and businesses and our economic recovery is going to stall out.

I think it is also important to note that it will send a negative message to the financial markets. If we don't take action to address this crisis looming in front of us on January 1, we can expect the 9.8-percent unemployment rate could go significantly higher.

I would simply argue that inaction is not an option, and advocating against this proposal is no different than advocating for higher taxes. I hope that my colleagues will see their way to support this today and to support it in big numbers. It will go from here to the House of Representatives, and they will look closely at the vote coming out of the Senate. I think it is fair to say, if and when it gets to the House of Representatives, it will pass provided the Senate sends a very strong message--a message I think consistent with the will of the American people. In fact, according to public opinion polls, one as recent as this morning, 70 percent of Americans believe and agree this tax proposal ought to be enacted and signed into law.

The real issue that I think affects our fiscal situation in this country isn't the fact we don't have enough revenue, it is that we spend too much. If we look historically--and it is an empirical fact--at what happens when you lower taxes--look at John F. Kennedy, at Ronald Reagan, and George W. Bush in recent history--anytime you lower marginal income tax rates, taxes on investment, you get more revenue, not less revenue. That is an empirical fact. You also get a growing economy. When you have a growing economy, it is obviously creating more jobs, and that is what we want to see happen. We want to get this 9.8-percent unemployment rate down.

I would argue that the issue we have in front of us with regard to spending and deficits and debt doesn't have to do with the fact we don't have enough revenue, it has to do with the fact that Washington spends too much, and that is where we ought to be targeting and focusing our efforts.

Historically, if you look at the last half century, I think the amount we spend for our government as a percent of our gross domestic product hovers somewhere in the 20 1/2 percent range. Today, it is about 24, 25 percent we are spending on government as a percentage of our total economy.

We have complicated and added to that burden by enacting major legislation in this last year. The massive new health care entitlement program, when it is fully implemented, will cost on the order of $2.5 trillion. We have lots of other legislation that has moved through here. The stimulus bill passed earlier this year was $1 trillion of borrowed money, which didn't have the desired impact. The one thing we know with certainty is that--at least based on history--when you raise taxes, you get fewer jobs; when you lower taxes, you get more economic activity, more jobs for the American people and, frankly, more revenue. That helps to deal with the issue of the deficit and the debt.

In this particular proposal there is some new spending. There are unemployment benefits included. I would like to have seen that offset. I had an amendment that would do that, that would pay for the additional spending in this bill. We are not going to have the opportunity to offer amendments, but there will be a couple of motions offered by my colleague from Oklahoma, Senator Coburn--motions to suspend the rules and pay for the additional $56.5 billion in new spending as a result of extending unemployment benefits in the bill. I think that is important for us to do.

Since we got into this recession, we have spent, I think, about $124 billion, borrowed from future generations for these extensions that we continue to pass for unemployment benefits. This particular one would take us up to almost $180 billion in borrowed money to pay for these benefits. It makes sense, in my judgment, when you are spending new money, you should offset or pay for that. Frankly, I would like to see that as part of this proposal. It is not in there. As I said, I have an amendment to rectify that, which won't be considered because we are not being given the opportunity to offer amendments. But I will support the motion to suspend the rules and pass a pay-for for the unemployment benefit extension the Senator from Oklahoma will offer later.

All that to say again the real issue here, in my judgment, comes down not to an issue of revenue but it comes down to an issue of spending. I think the American people recognize that. I think that is why there is such broad public support for this tax proposal, because the American people recognize that you can't raise taxes in the middle of a recession and expect the job creators in this country--our small businesses--to create jobs. It is counterintuitive and it defies all empirical knowledge and experience that we have to suggest otherwise. On the other hand, the American people do believe that government has gotten too big, that it is growing too fast, and it needs to be reined in. That is where we have to attack the spending side of this equation. I believe when the new Congress is seated next year there is going to be an intense focus on this issue of spending, and it is high time that happen, because it is high time we get the debt and the deficit issue that will plague future generations under control. The real issue doesn't have to do with revenue, it has to do with spending.

So I would urge my colleagues to support this proposal. As I said earlier, it is not perfect--certainly not in my estimation, nor I think in the eyes of many people who have looked at this. But on the other hand, it does prevent us, on January 1, from seeing a massive tax increase--the largest tax increase in American history--start to hit American families and American small businesses. That is why I hope we will pass it out of the Senate with a big bipartisan vote.

Mr. President, I yield the floor.

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