Sportsmen's Act of 2012--Motion to Proceed
Floor Speech
BREAK IN TRANSCRIPT
Mr. CORNYN. I thank the majority leader for his courtesy.
LABOR FORCE PARTICIPATION RATE
Earlier this month, we received another big job report and along with it a serious disappointment.
The numbers speak for themselves. In August, a remarkable 368,000 Americans left the workforce. They gave up, bringing the labor force participation rate, as it is known, to its lowest level in more than three decades.
Fewer people are looking for work in America than at any time in the last 30 years. That is a national tragedy. The unemployment rate stayed above 8 percent only because they quit counting the people who have given up. But it had been above 8 percent for the 43rd straight month. If, in fact, the same number of people who were looking for work in January of 2009 are still looking for work today, the unemployment rate would be over 11 percent. That was the date President Obama took office, January 20, 2009. So if the same number were looking today as were looking for work then, it would be over 11 percent, to show you how those numbers don't reveal the true pain and the sacrifice of American citizens who are looking for work.
I don't know of anyone who could look at the August job report or the June or July job numbers and feel good about the economy. I also don't know how they could now support a tax increase when the economy is growing at a much slower pace, contrary to their position--including the President's position--in December 2010, when the economy was growing at roughly 3 percent of GDP.
Beyond our borders, the Europeans are mired in a debt crisis, the Chinese economy has slowed down dramatically, and the United States continues to face major economic headwinds. We can't afford any self-inflicted wounds.
All I am suggesting is that we maintain the current Federal tax rates until we can work together in a bipartisan way and adopt real tax reform. Yet the President occasionally calls that position extreme--ironically, the same position he, himself, held in December of 2010, as I said just a moment ago.
It seems the President does not always understand or appreciate the strong connection between taxes and economic incentives on small businesses and other people we are depending upon to create businesses or to grow existing businesses and create jobs and to put Americans back to work.
We need look no further than the 2010 health care law, the law that went to the U.S. Supreme Court. Two aspects of it were found unconstitutional but not the tax on middle-class Americans.
In addition to that middle-class tax increase, the law contains a new excise
tax on medical device manufacturers that will discourage companies from building factories and creating jobs in the United States. That is not just my conclusion.
For example, Cook Medical, which has roughly 4,000 employees around Bloomington, IN, recently announced it is canceling five new manufacturing plants it had scheduled to open over the next half decade. A senior official estimated the new medical device tax will cost his firm between $20 million and $30 million extra each year. That is why they are shuttering those additional five plants and killing those potential new jobs.
Another medical device company in another part of the country--New York--Welch Allyn, recently announced it will be slashing 10 percent of its global workforce in response to this new tax.
All of this is, sadly, predictable and it is common sense. Unfortunately, common sense doesn't seem, to most Americans, to prevail or to be all that common in Washington, DC, these days. But if we raise the taxes on these medical devices, it is only logical, it is only reasonable, it is only common sense to expect that these companies will produce fewer jobs and, in the process, less innovation.
The irony of this discussion over taxes is we now have a growing bipartisan consensus in Congress and in Washington, DC, about the need for commonsense tax reform that would broaden the base, lower the rates, and help grow the economy by creating the proper incentives.
That was the recommendation of the President's own bipartisan fiscal commission, the Simpson-Bowles Commission in December 2010--the President's own bipartisan fiscal commission--where Republicans and Democrats agreed this is a good place to start in reforming our broken Tax Code, paying down the debt, and getting our country and our economy growing again. It was also the recommendation of the Domenici-Rivlin panel, another bipartisan panel. Both recommended a more logical, more equitable, more growth-oriented Tax Code.
Why, we may ask, is tax reform so urgent? Earlier this month the World Economic Forum released its new ``Global Competitiveness Report.'' America is not alone in trying to create jobs and grow our economy. We are competing with other economies and other countries around the world. As recently as 2008, the United States was ranked the most competitive country on the planet.
In the latest index, we fell to seventh. We are heading in the wrong direction when it comes to competing in a global economy for the jobs so that Americans can work and provide for their families and put food on their tables and gain the dignity that goes along with working and providing for your family.
Harvard Business School also surveyed 10,000 of its alumni to find out their views of America's competitiveness. At Harvard Business School, one of the premier business schools in the country, alarmingly 71 percent of those who responded said America would become less competitive during the next few years. In other words, they were not optimistic about the direction of the country when it came to competitiveness and job creation. One of the biggest reasons for their pessimism is the bewildering complexity of our Tax Code. A large majority said the tax complexity is either ``much worse'' or ``somewhat worse'' in the United States than it was in other developed countries. That is why Americans now spend hundreds of billions of dollars on tax compliance, because of a broken, unnecessarily complex and impenetrable Tax Code--unless you have the money to hire armies of lawyers and accountants to help you figure it out.
One more point about our Tax Code. Over time, our Tax Code has become larded with special provisions and tax expenditures that represent what has come to be known as crony capitalism. In other words, the Federal Government just doesn't spend money, the Federal Government has a Tax Code that benefits certain industries and sectors of the economy. Some of them we would largely agree on--such as the mortgage interest deduction or the interest you pay on your home mortgage. There is broad support for that, although everyone realizes we need to get all of these on the table. That is what Simpson-Bowles recommended. Let's get $1 trillion or more of these special tax expenditures on the table and look at the ones that still make sense and the ones we should do away with. As long as the Tax Code is as complicated as ours is, it is a drag on the economy. It promotes a culture of corruption, where people come to Congress and they lobby for special tax provisions that are not available to the broad population that benefit them. It seeks favoritism and rent-seeking, with companies and industries that try to gain competitive advantages through tax subsidies.
If we want businesses to spend more time in productive activity and less time begging the government for tax breaks, we need to fix the broken Tax Code with a flatter, fairer, more transparent system which encourages working and saving and investing--not lobbying here in Washington, DC, for special breaks. If we want our tax laws to be respected and understood, they need to be clearer, simpler, and more equitable.
Given how much President Obama talks about fairness of the Tax Code, you would think he would be all over this. You might expect he would be an eager champion for tax reform. Instead, the President wants to use the Tax Code as an ATM machine to subsidize particular industries and interest groups while punishing others. We need to get them all on the table, bring them all out into the light of day and address all of these special tax provisions so we can simplify and make more fair our tax system, unleashing the growth potential of the entrepreneurial American economy to create jobs and prosperity that is sadly lacking now in the current environment.
Unfortunately, President Obama, rather than attack this issue of crony capitalism, has promoted it. During the long government-run Chrysler bankruptcy process, the company-secured bondholders received less for their loans--29 cents per dollar--than the United Auto Workers pension funds. They got 40 cents on the dollar. The UAW pension funds, mind you, were unsecured creditors, entitled to less priority than the bondholders, who were entitled to the highest priority, but because of the way this was manipulated, the bondholders got 29 cents on the dollar, the union got 40 cents on the dollar.
During the automobile bailouts President Obama let politics trump the rule of law. What do I mean by that? I believe that rather than let the rule of law apply, he injected politics and favoritism in the process. In his energy policy, which I alluded to a moment ago, he put politics before his fiduciary responsibility to the American taxpayer. We agree that the Federal Government has a role in funding, through the research and development tax credit and other ways, basic scientific research to promote innovation. But the President and Congress should not be using your tax dollars to make risky, politically motivated investments that benefit specific companies or industries at your expense.
Solyndra offers the most conspicuous example. This now bankrupt solar energy firm received a $535 million loan guarantee from the Federal Government. According to the Washington Post, the Obama administration ``remained steadfast in its support for Solyndra,'' even after being ``warned that financial disaster might lie ahead.'' Then, as Solyndra went bankrupt, the administration violated the law by making taxpayers subordinate to private lenders.
In other words, even though the taxpayers gave a $535 million loan guarantee to this company that went bankrupt, the ones who ended up taking it in the neck were the taxpayers rather than the private lenders who should have been subordinated to the taxpayers when it comes to getting paid. If President Obama is as concerned as he claims about dicey investments with taxpayer money, he should repudiate these kinds of boondoggles and let the market work to allocate capital. Washington should not be picking economic winners and losers.
Speaking of winners and losers, the Department of Health and Human Services granted a series of 1- and 3-year waivers from the annual limit requirements contained in the President's 2010 health care law. These waivers fostered the impression that certain companies, unions, and institutions would be exempted and given preferential treatment.
The health-care law thus highlighted an inconvenient truth about big government: Any dramatic increase in federal regulations and bureaucratic authority will lead to a dramatic increase in rent-seeking and crony capitalism.
Finally, a word about the 2010 Dodd-Frank law. Democrats argue that Dodd-Frank ended ``too big to fail.'' In fact, it codified too big to fail, because certain companies will now formally be identified as ``systemically important.''
Are we really supposed to believe that ``systemically important'' companies will be allowed to collapse? The more likely scenario is that these firms will be viewed as too big to fail--both by investors and by federal officials--the way Fannie Mae and Freddie Mac were.
As University of Pennsylvania law professor David Skeel has written:
The companies that are cordoned off as systemically important distort the credit markets, as a result of the Fannie Mae effect. Because these institutions can raise capital more cheaply than financial institutions that do not enjoy implicit government protection, they have a competitive advantage over smaller institutions. This may dampen innovation in the financial system and lead to inefficient allocation of credit to nonfinancial businesses.
In short, regardless of what Democrats may think, Dodd-Frank has actually strengthened the nexus between Washington and Wall Street.
The rise of crony capitalism under President Obama has led many people to question America's commitment to free markets and the rule of law. Likewise, the President's failure to revive our economy has led to widespread pessimism about America's future. I firmly believe we can turn things around and restore our global reputation, and I firmly reject the notion that our decline is inevitable. There is no reason we can't rejuvenate the Great American Jobs Machine and return to prosperity. But it won't happen until we get much better leadership from the White House.
I yield the floor.
Source