Extending the Payroll Tax Deduction

Floor Speech

Mr. DURBIN. Madam President, there was a question raised this morning by the Republican leader about where we stand in the closing 2 weeks before the holiday recess. We have a lot of important issues left. One of the most important is the payroll tax cut. Here is what it means. If you have a job in Illinois, an average job in Illinois that pays about $50,000 a year, currently you have a break on your payroll taxes that are collected of about 2 percent. So what that means for those families is that they have an additional $100 a month to spend.

For some Members of the Senate and the House of Representatives, $100 a month might not make much of a difference, but for a lot of families struggling from paycheck to paycheck, $100 can make a big difference. When gasoline prices go through the roof, you can fill the gas tank in your car or pickup truck and make it to work. You might have a little extra money left for a utility bill when the natural gas prices and oil prices go up during the course of a cold winter. You might be able to afford some Christmas gifts for your kids, maybe even some clothes for them to go to school, a warm jacket for cold weather. So $125 dollars is important.

If we do not act, and act before we leave at Christmas, as of January 1 that payroll tax will go up 2 percent on working Americans, and they will have less money to spend. As they spend less money, our economy struggles. When they buy things, goods and services, it creates more economic activity in businesses small and large and creates profitability and jobs--job opportunities we desperately need with our high unemployment.

Now, we have taken a position with Senator Bob Casey's bill here when it comes to the payroll tax cut that it is not unreasonable to ask that the wealthiest people in America, the top 0.2 percent in America, pay a little bit more in taxes so that we do not add to our deficit with this payroll tax cut.

There were times in the past, as the President noted yesterday, when the Republicans actually argued: You never have to pay for a payroll tax cut or a tax cut. Now they have taken a different position--it has to be paid for. Well, we do pay for it. We pay for it with a surtax on millionaires. Unfortunately, some Republicans opposed that.

Senator Kyl said yesterday on the floor, in a statement relative to an exchange we had, that it is hard to say the rich are not paying taxes. I am not arguing that point. They are paying taxes. But, frankly, under our system of government, with a progressive tax system, those who are well off--Members of Congress and the Senate--those with high salaries should pay more than those who are struggling from paycheck to paycheck.

The people we are talking about, the top 1 percent wage earners in America, will have an average annual income in 2013 of $1.4 million a year--$1.4 million a year. By my calculation, that is a paycheck of $28,000 a week. To say that those people cannot afford to pay a little more in taxes is hard for most families to understand--it is hard for me to understand. The Bush tax cuts, incidentally, which the Republicans support making permanent have been very generous to those people. If the Bush tax cuts for the wealthiest Americans are extended, those in the top 1 percent, making more than $1.4 million a year, are going to see a tax cut in the year 2013 of $68,000--a tax cut at a time when we have Federal deficits and needs in our country to get beyond this recession.

These people in the top 1 percent control almost 25 percent of the income in America--1 percent of the population, more than 25 percent of the income. That is up from 12 percent just 25 years ago. They control 40 percent of all of the wealth in the United States. They are comfortable. In 1986, they only controlled 33 percent. In fact, we can say that in the last 25 years, the wealthy in America have become even more comfortable, and to ask them to make even a small sacrifice for the good of this Nation is not unreasonable.

Senator McConnell came to the floor and suggested that what we are dealing with on the floor here is political showmanship. Well, last week we went beyond showmanship and we actually called a vote. We had a proposal--Senator Casey's proposal--to reinstitute this payroll tax cut and pay for it, as I mentioned, with a surtax on the wealthiest people in America. At the end of the day, out of 53 Democratic Senators, 50 voted yes, and 1 Republican Senator joined us. We had 51 votes in favor. It took 60 votes to pass, so it did not prevail.

Then Senator McConnell had his chance. He brought to the floor the Republican alternative. They would extend the payroll tax cut by eliminating jobs--over 200,000 jobs in the Federal Government at a time when, frankly, we need more workers in veterans hospitals and we need more people working on medical research at the National Institutes of Health and we need more involved in law enforcement to keep America safe. But Senator McConnell said that the way to pay any tax cut for working families is to eliminate Federal jobs. They called it for a vote. There are 47 Republican Senators on the floor. So how did the vote turn out when the Republicans called their proposal to extend the payroll tax cut? If I am not mistaken, only 20 Republican Senators voted for that proposal. In fact, Senator McConnell was the only Member of the Senate Republican leadership who voted for the proposal.

So you have to ask, when it comes to the competition of ideas, who won that exchange? The answer is, no one won because at the end of the day we did not extend the payroll tax cut.

Back home in Chicago this last week, I had a press conference with a lady, a single mom, three kids, struggling with three jobs, with an annual income--combined income of less than $25,000 a year. I cannot imagine how she gets by. But she said that $50 more a month--that is what the payroll tax cuts means to her--would be significant--$50. That is how close so many people live to the edge.

It is time for us, in the closing days of the session before Christmas, to reach a bipartisan agreement to make sure the payroll tax cut is extended, to make sure the unemployment benefits that are needed so desperately by so many people out of work are there to help them and their families. The only way we can achieve that is in a bipartisan agreement. We now know that the notion of just cutting away at Federal jobs has been rejected soundly, even by the Republican side of the aisle. Let's come to a reasonable conclusion on how to pay for this in a manner that does not add to unemployment but adds more jobs to the American economy, something which most Americans agree should be our highest priority.

I yield the floor, and I suggest the absence of a quorum.

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