Small Business Jobs and Tax Relief Act--Motion to Proceed
Floor Speech
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Mr. CORNYN. Mr. President, I have listened to some of my friends across the aisle talking about the vote in the House to repeal what has now come to be known as ObamaCare, which the official title is the Patient Protection and Affordable Care Act. But I think history has now demonstrated it is not the Affordable Care Act; it is the ``Unaffordable Care Act.''
My colleagues suggest the only way we can possibly protect people from preexisting disease exclusions under their insurance policy or make sure young adults up to 26 years old can remain covered under their parent's coverage is to pass this $2.5 trillion monstrosity. That is not the case. We could easily address these other issues as well as affordability if we were to take a step-by-step approach to try to make sure the patient-physician decisionmaking process is preserved, while making health coverage more affordable for more Americans.
But unfortunately that was not the approach taken under ObamaCare. In fact, under ObamaCare, there was almost no attention paid to trying to make coverage more affordable. The focus was on expanding coverage, an admirable goal but one that ignored affordability almost entirely. We now know ObamaCare was based, the vote in favor of and the public support, such as it is for ObamaCare, was based on a litany of what has now proven to be broken promises. The promise that if someone likes what they have, they can keep it, we know that is not true. More and more employers are dropping their employer-provided coverage for their employees.
The President himself said a family of four would actually see their premiums reduced an average of $2,500 a year. What has happened? Premiums continue to go up, roughly at the rate of 10 percent a year.
The President said, and I heard my colleague from Maryland just say, ObamaCare cuts the deficit. How they can spend $2.5 trillion and take $ 1/2 trillion more from Medicare, an already fragile, unsustainable program--unless we fix it--and that cuts the deficit is, I think, beyond the understanding of most Americans. Certainly, it is beyond mine.
I would like to ask my colleague this question: What we know is that now the Supreme Court has decided the constitutionality of ObamaCare. The Supreme Court has said--and under our system of government it is the Supreme Court that is the final word on these matters. It said the only way ObamaCare could be constitutional is for the individual mandate to be considered a tax--a tax. Indeed, it is a tax, a broad-based tax on the middle class.
I want to know how many votes in the House, how many of our colleagues in the Senate would have voted for ObamaCare if it had been called what it is, a middle-class tax increase--a middle-class tax increase. I think it is important to have a vote in the House today, and I think it is important to have a vote in the Senate, as Senator McConnell has proposed to do, to see whether, based on the fact that the Supreme Court has finally decided this is a tax on the middle class, whether it would enjoy the support across the aisle it did in 2009 and 2010.
But I wish to talk a moment more about taxes and indeed the challenges that face small businesses and working families across the country and the need for the Senate to stop contributing to the class warfare rhetoric and gamesmanship that seems to encompass us 118 days now before the general election and the importance of actually addressing taxes in a constructive manner, in a way that will helpfully get our economy growing again.
To that end, it is my sincere hope that the majority leader will allow an open amendment process on this piece of legislation and allow it to go forward and give Senators the opportunity to offer ideas about how to improve this legislation and help small business job creation.
What we do know for a fact is that unless Congress and the President act before December 31, 2012, American taxpayers will face the single largest tax increase in American history. Why is that? Because the tax provisions we passed in 2001 and 2003 and then again in 2010, under President Obama, will expire at the end of this year.
For example, in less than 6 months, the highest individual tax bracket will rise from 35 percent to just under 40 percent. I think it is important for everyone to realize we are just talking about Federal taxes. We are not talking about State taxes or local taxes. Many States--thank goodness not Texas but many States--have a State income tax which is added to the Federal tax burden. Of course, virtually everyone in the country pays some form of sales tax.
We need to think about, when we add to the tax burden of the American people, what that means in terms of their cumulative tax burden, including Federal, State, and local taxes.
Unless Congress acts, people in the lowest tax bracket will see a 50-percent tax increase. Indeed, the marriage penalty will increase, the child credit will be cut in half, and taxes on capital gains and dividends will increase.
Why are lower taxes on capital gains and dividends important? Well, on capital gains it is important because we want to incentivize people to make long-term investments, to create jobs.
Why is the lower dividend rate important? Many seniors who are retired depend on dividend income from their retirement funds in order to help pay their cost of living.
The bottom line is unless Congress and the President act before December 31--and I submit it is important to act sooner rather than later to send a signal to the markets and job creators about their tax burden on January 1--every taxpayer in the country will pay higher taxes.
Unfortunately, instead of engaging in a serious manner on this issue, the President earlier this week reverted to his old playbook of class warfare and gamesmanship. He advocated again another policy which has failed to pass the laugh test, if you think about it. The President previously proposed the so-called Buffet rule--named for Warren Buffet--and said if we pass the Buffet rule and raise taxes, our problems would all be solved.
Do you know how much revenue would be generated by the Buffet rule if it passed? It would be enough revenues to run the Federal Government for 11 hours--less than half a day.
Well, I have to admit the President's recent announcement that he wants to raise taxes on small businesses has left me scratching my head. I remember back in 2010, when President Obama said raising taxes during a fragile economic recovery ``would have been a blow to our economy.'' That is what President Obama said in 2010. But in 2012, he seems to be singing an entirely different tune. At the time, in 2010, economic growth was roughly 3.1 percent. That is when President Obama said raising taxes would be a blow to our economy. Do you know what the economic growth numbers are today? Our economy is growing at roughly 2 percent of GDP, gross domestic product. Instead of 3.1 percent, it is growing even slower right now.
Of course, as I mentioned, this tax increase the President and the majority leader are proposing is on top of the ObamaCare taxes. It is not just the individual mandate I alluded to earlier that will penalize people who don't buy government-approved health care, but that is on top of approximately 20 different other tax increases that are part of the ObamaCare legislation. Not only do these new taxes break the President's own pledge not to raise taxes on individuals who make less than $200,000 a year or families making less than $250,000 a year, but it also creates barriers to new investment and job creation.
Recently I attended a meeting downstairs with Bob Zoellick, head of the World Bank, and the president of the New York Federal Reserve office--a gentleman whose name escapes me. The president of the Federal Reserve in New York said: When talking with business people across the country, I ask them what is your attitude, your mood? Are you going to invest or sit back on the sidelines? He said almost universally the message is: We are done. We are not doing anything else until Washington--in other words, Congress and the President--figure this out.
Who in their right mind would want to start a new business with the uncertainty as far as taxes are concerned, or the burdens that are imposed upon individuals and small businesses because of ObamaCare? I mentioned that in addition to what the Supreme Court found to be a tax--the individual mandate--ObamaCare includes a new 3.8-percent surtax on capital gains, dividends, rents, and interest earned by many taxpayers. This new surtax goes into effect next year, in 2013.
Another thing I found amazing in terms of the audacity of those who supported ObamaCare in 2009 and early 2010 is that a lot of the taxes that were included in the bill didn't go into effect until after this next election. Isn't that an amazing coincidence?
Enacting this permanent tax hike was a mistake then, and it continues to be a mistake now. It will discourage savings and investment, reduce productivity, and it will depress wages and the standard of living for millions of Americans.
According to one nonprofit economic policy research and educational organization, a 2.9-percent tax increase would depress economic growth by 1.3 percent. You heard me a moment ago say our economy is growing roughly at 2 percent. This think tank says they estimate a 2.9-percent tax increase would depress economic growth by 1.3 percent, and it would reduce capital formation by 3.4 percent. Those are numbers that come out of, obviously, a think tank, but that means fewer jobs and a lower standard of living for many Americans. The damage to job creation and economic growth would be even greater from a 3.8-percent investment tax. You don't have to be an economist or a rocket scientist to figure out that higher taxes are going to depress economic activity. Indeed, it is all about incentives. If we create incentives for people to be productive, work hard, and make investments, then they will respond. If we raise the bar and make it more expensive and harder, they are going to do less of it. It is that simple.
Taxpayers, including small businesses, are already scheduled to get hit with the largest tax increase in history at the end of the year, as I have already mentioned.
I will close on this, as far as this subject is concerned: We know the key to job creation is to grow the economy and allow small businesses to flourish, invest, and create jobs. That is what we are missing now. Government has grown and grown and grown. It has spent money it didn't have under the stimulus bill passed early in the Obama administration. Do you know what the projection was at that time that unemployment would be today if we passed this spending bill using borrowed money? The President's administration said unemployment would be at 5.6 percent. Yet it continues to persist at over 8 percent. So we know that obviously didn't work.
I believe it is important that we put into place an insurance policy against any Senate effort to increase taxes on small businesses. For that reason, I have offered time after time a proposal that would require a supermajority to raise taxes on small businesses. The last time I raised this proposal, when we considered the 2010 budget--which is actually the last time the Senate passed a budget, but that is another subject altogether--the amendment passed with the support of 82 Senators, including 42 Democrats, many of whom still serve in the Senate.
Raising taxes on small businesses that represent the primary engine of job growth in this country is not the answer to getting our economy back on track.
I know about 400,000 small businesses in Texas that employ 4 million people especially cannot afford to pay higher taxes, particularly at this time. We know it is small businesses that create the vast majority of new jobs.
Given that the administration has said it is committed to creating jobs, I am left wondering why they would want to increase taxes on those we are depending upon to do just that. I know the millions of Americans who remain out of work are wondering the same thing today.
VOTER IDENTIFICATION
Mr. President, I want to make a brief comment about the voter identification debate. This is particularly important in my State, but it is important across the country, because many States have passed commonsense voter identification laws to protect the integrity of the ballot and prevent dilution of the vote for majority and minority members and everyone across the board, and to protect against voter fraud.
Yesterday Attorney General Holder spoke in Houston, TX, at a gathering of the NAACP. I am sorry to say his remarks were completely inappropriate and misleading. Mr. Holder knows--or he should know--that the Texas law that requires a photo ID in order to cast a ballot will be issued free of charge to any voter who asks for one--free of charge.
He conveniently ignores the fact that the Supreme Court of the United States has previously--in an Indiana case--dispositively held that voter ID laws are constitutional and necessary to protect the integrity of the vote. This is the low point of the Attorney General's remarks. He once again defamed my State and our State legislature by equating our commonsense voter ID law with a poll tax.
By invoking the specter of Jim Crow racism, the Attorney General is playing the lowest form of identity politics. Mr. Holder knows better. This rhetoric is irresponsible and a disgrace to the office of the Attorney General. Shame on him.
Mr. President, I yield the floor and suggest the absence of a quorum.
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