Moving Ahead for Progress in the 21st Century Act

Floor Speech

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PAYROLL TAX CONFERENCE REPORT

Mr. WARNER. Mr. President, let me rise today to speak about the conference report that it appears we will be voting on tomorrow regarding the issues of the payroll tax, unemployment benefits, and the so-called doc fix. Let me first of all acknowledge that I know that many of my colleagues have worked long hours on the payroll tax deal that was apparently reached late last night.

I have been briefed on pieces of this deal and I've also seen many of the press reports that have described this deal as a new sign of bipartisanship. As a new Member of the Senate, I know, like the Presiding Officer, we believe that we do our best work here in Congress when we can have bipartisan solutions, when we can find ways to reach common ground.

All of those factors make it doubly difficult for me to now rise and say I will be voting against the conference report when it comes before this body tomorrow.

Now, let me acknowledge on the front end that I think there are worthy reasons in this recovering economy we have got right now, it makes some sense to maintain some form of payroll tax holiday for a limited period of time.

I know the Presiding Officer feels that one of the most important issues our country confronts right now--I would say the most important issue and the one that overhangs everything else we debate here--is our inability to come to grips with our debt and deficit.

I know, as we try to nurture this growing recovery, one of the ways we take on that debt and deficit is by having a growing economy.

But I also believe it is terribly important that we show progress on this issue. Our national debt now exceeds $15 trillion. Every day that we fail to act, we add $4 billion to that total. None of this becomes self-correcting. It will not correct itself until and unless we act.

I, for one, believe there is no action this body could take that would be more stimulative to our economy, that would be a better jobs program, that would do more to restore the trust of the business community and the public than to show bipartisan collaboration and cooperation on a long-term debt and deficit deal. So let me share with my colleagues the five reasons I will be voting against the conference report tomorrow.

First and foremost, the payroll tax cut that has been proposed isn't being paid for. It will add $100 billion to the debt.

Second, I think the compromise that has been put together turns some of our traditional policies on their head. By taking this action of saying tax cuts somehow don't have to be paid for, we are advancing a policy I believe will come back to haunt us later this year when the Bush tax cuts expire.

As a matter of fact, while I have only been a Member of this body for 3 years, I know it has been a tradition that in moments of economic crisis, the Congress will sometimes extend unemployment benefits, particularly for those States that have been hardest hit. In those moments of crisis, the unemployment benefits sometimes go unpaid for. Well, in the compromise in this conference report, we turn that policy on its head in that there was a requirement to pay for the extension of unemployment benefits but no requirement to pay for the $100 billion of additional debt taken on by the payroll tax cut.

I know in this body, as we have had debates about debt and deficits and economics, we have discussed the economic theories of a whole host of thinkers and economists--John Maynard Keynes, Frederick Von Hayek, Milton Friedman, Paul Krugman. I somehow feel as though this conference report we will be voting on tomorrow may reflect the thinking of a more obscure individual, but someone I recall as a child growing up, and that was Wimpy, who was a cartoon character--Popeye's hungry pal. Wimpy used to always say, ``I will gladly pay you Tuesday for a hamburger today.''

Well, it seems on this economic policy we are talking about today, of deferring payment for this payroll tax policy, that Wimpy once again has won out.

Let me cite the third reason I will be voting against the conference report tomorrow. As I acknowledged at the beginning of my comments, I believe extension of the payroll tax holiday makes sense in this recovery, but it just needs to be paid for. So I could have very easily supported a number of the proposals put forward by my colleagues on the Democratic side, including a 1-percent increase of the taxes on those of us who make more than $1 million a year--a defined benefit for the defined pay-for.

If we couldn't breach the gap on that, I could have looked at means-testing the payroll tax holiday.

If we are trying to make sure these dollars get into the economy as quickly as possible over this coming year, then clearly a payroll tax holiday for folks who make less than $150,000 a year or $250,000 a year or $500,000 a year or $1 million or less a year--it didn't make sense to say that regardless of one's income. This payroll tax holiday--going to folks like me, who are doing pretty well--is not going to have a stimulative effect, I just don't think economic theory bears that out. So if we had paid for this or put some restraints on it, I would have been happy to support this conference report.

The fourth reason I can't support the conference report is because I am concerned this payroll tax holiday--which goes into the Social Security trust fund, is supposed to end at the end of this year. But we have no metrics placed on it. It scares me greatly that we will approach the end of the year and there will be some other reason it needs to be extended again.

I believe we should have put in place a requirement that this payroll tax holiday would start to ratchet back if we continued to see growth in the economy--perhaps ratcheted back one-third if we had seen GDP growth for the next 3 months or employment growth for the next 3 months, ratcheted back another one-third, ratcheted back another one-third--so we wouldn't have the cliff effect that is being proposed at the end of the year, again, a cliff effect that will come at the same time as the end of the Bush tax cuts, the imposition of the so-called $1.2 trillion sequester cuts, and the proverbial train wreck that is already being talked about.

So while I believe this payroll tax holiday is important, the price, the fact we are not paying for it, the fact we have put no restrictions or parameters around it and the fact that there's no guarantee it will actually expire because we have no metrics of how much economic progress we need to have before it expires are reasons I will be voting no.

Let me raise one other concern I have about the conference report. This is one more example of particularly our colleagues in the House saying the first place they go for any pay-for for any project seems to be our Federal workers--the same Federal workers, close to 2 million strong, who keep our streets safe, make sure we get those Social Security checks, try to take out terrorists, drug dealers, you name it. They are the same Federal workers who have had their pay frozen for the last 2 years and who have had to endure the prospects of two or three potential shutdowns over the last year and a half. To say we are going to come back to the well time after time on this group I don't think is fair or right.

As someone who has looked at the Federal pay and benefits, when we get to that issue of a comprehensive tax reform, entitlement reform, big deficit deal, all these items will need to be reviewed. But the notion the first place to come back to for any pay-for is our Federal employees, to me, doesn't seem fair nor does it seem right. So for these five reasons, I will reluctantly be voting against the conference report tomorrow. I believe it was, again, in the context of the debt and deficit particularly, Will Rogers who said: When you find yourself in a hole and you want to get out, stop digging. Well, in some small way, by voting no tomorrow, I hope I will send a signal that I--and I hope others will join me--will stop digging.

With that, Mr. President, I yield the floor, and I suggest the absence of a quorum.

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