Middle Class Tax Cut Act--Motion to Proceed--Continued

Floor Speech

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Mr. DURBIN. Mr. President, in a short time we are going to vote on a tax measure that gives the Senate a very clear choice, and here is the choice: At the end of this year, a whole battery of tax cuts that were enacted into law years ago will expire, on December 31. The question is, What is going to happen next? If we do nothing, a very good thing will happen but also a very bad thing will happen. The good thing is that if the taxes go up on virtually all Americans for 10 years, we will reduce our deficit by $5 trillion--more than any group has been able to suggest or come up with a plan to achieve in any of the meetings in which we have been involved. That is $5 trillion in deficit reduction. It is an amazing reduction. There is another side to the ledger. On the other side of the ledger it says: If we start taxing families now while this economy is in recovery, it is going to slow down the recovery. Well, that is natural. People have less money to spend, and many working families living paycheck to paycheck will face a new hardship they don't have today. They reduced their spending, the economy contracts, and we see this recession hang on with high unemployment and businesses failing.

So it really is a very Faustian choice, a difficult choice--reduce the deficit dramatically, on one hand, by letting all the tax cuts expire but risk going into a deeper recession and maybe repeating what happened a few years ago, which devastated our economy.

The President said: Let's try to strike the right balance. When all of the tax cuts expire on December 31, let's focus on restoring the tax cuts for that portion of American families and workers who need a helping hand to continue. But let's not go all the way. Let's not restore the tax cuts for those in the highest income categories.

So the President says: We can have both. If we follow my plan, we will reduce the budget deficit because we don't give tax cuts to the wealthiest, and we will still help working families, and we will keep the economy moving forward.

He tries to strike that balance. The balance he strikes is that everyone will get a tax cut on the first $250,000 of income, even millionaires, but not beyond that.

The Republicans have a different approach. They will offer an amendment--extend all the tax cuts for everyone to the highest levels of income, well beyond $250,000, not just to the 98 percent of the Americans who make $250,000 or less but 100 percent, everybody. Well, their approach, by extending those tax cuts, will mean no deficit reduction. In fact, their approach would add about $900 billion to the deficit compared to the President's approach. So they are really basically throwing a bucket of red ink on this conversation and saying: We are prepared to add $900 billion to the deficit so that the top 2 percent of wage earners can get a tax break.

That isn't all. The Republican approach, which will be offered by Senator Hatch, the ranking Republican on the Senate Finance Committee, goes a step further. I don't understand this part of it. He wants to extend the tax cuts to the highest income categories, but then he very carefully excises or eliminates some of the basic tax breaks working families use.

Let me be specific. The Hatch-McConnell bill does not extend the earned-income tax credit, child tax credit provisions, and as a result here is what happens: The Hatch provision, which protects the wealthiest in America by saving their tax cut, would increase the tax on 11 million working families in America who currently are able to deduct the college tuition expenses for their kids. So while the wealthiest in America will get a break all the way through with the Hatch-McConnell Republican approach, 11 million American families will find their tax bills going up if they have kids in college.

What kind of message is that? Here the students are struggling to get through school, families are incurring debt, and we create a tax benefit to help those families get through, but the Republicans say: No, we are going to raise the taxes on 11 million working families.

That is not all. They also raise the taxes on 6 million other families, working families with three or more children, by $800 each on a change they refused to make on the earned-income tax credit and then turn around--and I think this is one of the worst--and increase the taxes on families with children. The child tax credit currently in the law allows a break for families with kids, a helping hand, because kids can be expensive. This is part of the Tax Code that helps these families.

So about 25 million American families will see their taxes go up with the Hatch-McConnell Republican tax approach that protects those at the highest level of income categories. I don't think that is sensible.

I have spent a lot of time in the last couple of years talking about this deficit. It is serious. I guess I come from the Democratic side of the spectrum, the left side of the spectrum. That is what my values reflect, and that is what my voting record reflects. But I will say this: This Democratic Senator understands that deficits are for real. We cannot continue to borrow 40 cents of every dollar we spend, even for the programs I love, let alone the programs I am not so crazy about. So we have to reduce spending, but we can't balance the budget with millions of Americans out of work. We need to get this economy growing, moving forward, and creating jobs.

People who are working and paying taxes make this a strong country and start to solve some of our deficit problems just by virtue of the fact that they are working, paying their taxes, and raising their families. So when it comes to these tax cuts, let me say that I am passionate about making certain working families get the break they need.

Pew Trust did a survey last year. Here is what they asked working families across America: If you had a family emergency and you needed $2,000 in 30 days, could you get it? Could you come up with $2,000 if there was a major car repair or a pretty routine trip to the hospital or to a doctor's office? That can run to $2,000 in a hurry if you have a broken arm. Consider the possibilities. So they asked all the working families how many of them could come up with $2,000 in 30 days. The answer was half of the working families. That means the other half can't. It tells us how close to the edge many people are living.

That is why the President's proposal--the Democratic proposal here--that gives the tax cuts and tax breaks to the working families makes a difference. Ninety-eight percent of Americans will benefit from the President's approach; 2 percent will pay more. I think 2 percent will pay their fair share.

The Republican approach means, for a person making $1 million in a year--and just some quick math: that is $20,000 a week in income--it would give them a $250,000 annual tax break. Come on. At this moment in time, when we are dealing with the deficit and calling on Congress for more spending cuts and saying we have to get it together as a nation, $250,000 a year in additional tax cuts for millionaires? I don't get it. I don't begrudge them their wealth. This country is based on successful people who have led us in business and so many other endeavors. But I also think those people, when you talk to them, are darned appreciative to live in this country and willing to help it move forward.

Then they make the argument that, well, wait a minute, if we raise taxes on people making $1 million a year, we are going to hit a lot of the ``business creators.'' Well, we looked at that. Ninety-seven percent of small business owners are exempt if we draw the line at $250,000 of income. I will concede that there are professional corporations and S corps, investment fund managers, some accountants, some lawyers, and some doctors who may be job creators. I don't doubt that. But are we really asking a great sacrifice from someone making $1 million a year not to get a tax break to the full extent they did before?

I think what we understand is that if we are going to help the middle-class and working families in America and if we are going to move the economy forward, we need a sensible tax policy.

I happen to be of the school that maybe not all the Democrats agree with. On the Simpson-Bowles Commission, I was the one who said that the only way to deficit reduction is to put everything on the table, including the programs that I think are critically important for America's future.

Medicare makes a difference in the lives of 40 million-plus Americans, and I want it to be there. I know it is going to run out of money in 11 years. Think about that. If we don't do a thing here and if we get caught in political gridlock, the Medicare Program that 40 million-plus Americans depend on is going to run out of money. What excuse are we going to come up with? There is no excuse. We need to sit down, look at this program, make sure that works, and make sure it is affordable for seniors. We have to do it sooner rather than later.

We hear so much about Social Security. Let's get the facts out. For at least the next 22 years, Social Security is going to make every promised payment to every retiree in America, with a cost-of-living adjustment, no questions asked. We can't say that about many, if any, Federal programs. But in the 23rd year, we will be in trouble. We will have a dropoff in revenue in the Social Security trust fund, and the payments would have to be cut about 30 percent.

If you are wealthy in retirement--and some people are--your Social Security check is like a little extra dividend, but for some people, it really determines whether they are going to get by for another month, and a 30-percent cut is unacceptable.

We need to look at Social Security. It doesn't add a penny to the deficit, but the Social Security trust fund needs to be stronger longer. We need a bipartisan approach to this. We did it 50 years ago, and we can do it now. We need to sit down and make sure it works. We shouldn't decide that this is out of bounds. That is something we need to consider.

It won't be voted on today, neither Medicare nor Social Security. We are just dealing with the tax side of this conversation. I happen to believe all of these things need to be discussed. When it comes to taxes, we are pretty basic on that. I want to make sure working families have a tax code that helps them.

Think about this for a second. Last week we had a bill on the floor of the Senate, and here is what it said. Currently the Tax Code creates incentives and rewards American businesses that want to ship jobs overseas. American businesses that want to outsource and ship jobs overseas, the Tax Code says, we will give you a break. They will pay less taxes if they send jobs away. That makes no sense at all. Why would we reward the export of American jobs? Why would we provide for the deductibility of moving expenses and other expenses related to moving their business out of America and hiring people in another country?

So last week Senator Debbie Stabenow of Michigan and Senator Sherrod Brown of Ohio came to the Senate floor and said: Let's eliminate the tax incentive to move jobs overseas, and let's turn it around. Let's create a tax incentive for businesses that want to bring jobs back to America. Sounds right to me, doesn't it, that we are creating jobs in this country and discouraging them from going overseas? In the end, we had all the Democrats voting for it and only 4 out of the 47 Republicans voting for it. That is not enough to break the Republican filibuster.

When we talk about a tax code, I not only want to help working families, I want to provide an incentive and reward for those good, home-based American corporations that are trying to keep good-paying jobs right here in the United States of America. Honest to goodness, if we want to walk into a store, pick up a product, flip it over, and see ``Made in the U.S.A,'' we better wake up.

Currently what is going on is unacceptable. This notion on the Republican side of the aisle that we shouldn't get in the way of business when they want to make their decisions,

I may not argue with that premise, but I don't think we ought to incentivize it, subsidize it, provide something in the Tax Code to encourage it, particularly when it costs American jobs. But last week, only 4--4--of the 47 Republicans would join us in that effort, so we came up short. This week, we have to get it right when it comes to our Tax Code in the future and tax cuts for the families across America.

One of the things that has worried me greatly as I consider the challenges facing families is their inability to provide for their kids the way they want to. I think we all know the expenses of raising children. We all know what families face when the kids are off to college and we know some of the challenges they face after college. We have come up with an approach which I think is sensible: a child tax credit for the young kids; a deduction of college education expenses for those who made it to that level of education; and then part of what some call derisively ObamaCare, which says that families can keep their kids on their own family health insurance until those young men and women reach the age of 26. That makes sense. How many young people coming out of college today
struggle to find a job and, if they find one, struggle to find a job with health care benefits?

I can tell my colleagues that many times I would call my daughter or son after they got out of college and ask them about health insurance, and my daughter used to say, Dad, I don't need that now. I will get it later. I feel fine. Well, she never knew and I didn't know what tomorrow would bring.

So if we are going to give peace of mind to families, let's make sure we think along the spectrum, along the continuum. Why would the Republican proposal today want to raise taxes on families with children, raise taxes on some 15 million families across America, including those with kids? If they can find room for a tax break for the wealthiest, shouldn't they be able to include those families with kids? They may not be the wealthiest, but they are, in many cases, the neediest, and they are, in many cases, the most important for our future. Yet the Republican approach--the Hatch approach--is going to raise taxes on middle-income families with children. That is something we should never allow to occur.

Let me say, this should be a simple vote for everyone in the Senate, across the political spectrum. We ought to agree on two things. First, we need to cut taxes for middle-income and working families. Second, we should be responsible stewards of the Federal budget and not leave a mountain of debt for our kids. Giving tax breaks to the wealthiest people and adding $900 billion to our national debt is not responsible.

Let's take this vote and show the American people we stand with them and their values. We stand for cutting middle-class taxes and putting our debt on a sustainable path to recovery.

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

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