Senate Floor Statement on Cloture Vote on Tax Cuts
Monday, December 13, 2010
Mr. President, I believe that before this Congress adjourns we must extend unemployment benefits that are so vital to the economic survival of many American families and to our economic recovery. I also believe we must ensure that working families are not hit with a tax increase that endangers our recovery. But the legislation before us exacts a high price, and it should be amended to accomplish those goals without giving unwarranted benefits to the wealthiest Americans. Unfortunately, the procedure under which it is intended for us to consider it will apparently give us no opportunity to correct its shortcomings.
The tax cuts included in this bill, while they would benefit working families, are too skewed toward the well-off, and would exacerbate a growing trend of income inequality in our country. Today, the wealthiest one percent of Americans receive about one-quarter of total U.S. income. Thirty years ago, they earned only about 10 percent of total U.S. income. Not only have incomes for the wealthiest sector of the population continued to grow. Incomes for middle- class families have been stagnant and have actually fallen when adjusted for inflation.
This unconscionable inequality will only increase as a result of the estate tax provisions in the bill before us. The pending legislation would exempt the first $5 million of estates from any tax, and tax remaining amounts at 35 percent. This is far more generous to the wealthy than the $3.5 million exemption and 45 percent tax that was law before this year. Just a few thousand Americans would benefit from this generous provision, but the cost to the treasury is huge.
Now, our Republican colleagues have argued that all of that inequality is a necessity, because only if we extend these enormous benefits for our wealthiest citizens will our economy continue its recovery. But Mr. President, we know that this is not true. We know, in fact, that tax breaks for the wealthy have little impact on the economy as a whole.
As independent experts from the Congressional Budget Office and Congressional Research Service, from the Federal Reserve and the National Bureau of Economic Research, from academia and the private sector have all demonstrated, tax cuts for the wealthy do a great deal to add to their savings, but do not stimulate the economy. Economist Mark Zandi, who has advised members of both parties, estimates that in terms of bang for the buck, extending the tax cuts expiring at the end of this year will boost the economy by just 29 cents for every dollar they cost. Compare that to Mr. Zandis estimate that we would get $1.64 worth of economic boost for every dollar of enhanced unemployment benefits.
In fact, there are few people other than our Republican colleagues who believe that tax cuts have a large positive effect on the economy. Bruce Bartlett, a conservative economist, summed up what is nearly a consensus view among economists this way: The truth is that there is virtually no evidence in support of the Bush tax cuts as an economic elixir. To the extent that they had any positive effect on growth, it was very, very modest. Their main effect was simply to reduce the governments revenue, thereby increasing the budget deficit, which all Republicans claim to abhor.
Mr. President, this legislation does include some very important measures that will help working American families, boost the economy and increase employment. First among them is the extension of unemployment benefits, which, I remind my colleagues, does not provide additional weeks of benefits beyond the current 99-week maximum, but does continue the current emergency benefits that have helped millions of families. As I mentioned before, these benefits are a valuable tool in building the economic recovery. As Congressional Budget Office Director Doug Elmendorf has testified, The largest effect on the economy per dollar of budgetary cost would arise from a temporary increase in aid to the unemployed. But beyond the positive effect on the economy, extending these benefits is the right thing to do. The Americans who depend on these benefits to put food on the table and shelter overhead did not throw the economy into crisis. They did not profit from the recklessness that brought so much profit to so few. Helping the jobless is simply the right thing to do.
Indeed, it is outrageous that our Republican colleagues have insisted that we can only help those in great need if we also provide enormous benefits to the wealthiest among us. They hold hostage aid to those in need unless we include tax cuts for those who have no such need. I know there were some Republicans who objected when President Obama used this same language in describing their position on this issue. I would say to them that if people do not want to be called hostage takers, they should not take hostages.
And Mr. President, we cannot forget that the result of these tax cuts for the wealthiest among us is the addition of billions upon billions of dollars to the deficit. Our Republican colleagues, who have called so loudly for government to live within its means, seem to live in a world of magical accounting, where the impact on the deficit of tax cuts for the well-off can be ignored. Over the next two years, the measures in this legislation that Republicans have set as the price for tax cuts for the middle class and aid to the jobless will add more than $100 billion to the deficit. At a time when Washington is awash in deficit-reduction plans that would impose draconian cuts to important federal programs, we simply cannot afford to do that.
Now, there is a traditional solution to the problems with this bill. That solution is debate and amendment. There is no reason why those of us who oppose portions of this legislation should not have the opportunity to air our objections, propose remedies to them and place them before the Senate. But the procedure under which the Senate will consider this bill will apparently not allow us to do so.
While the problems in this legislation are significant, the apparent inability for Senators to offer improvements amendments also affects my thinking on the cloture motion before us. Even an abbreviated amendment process would provide the chance to make the case for a more equitable bill. While efforts to amend the bill might not be successful, it is unacceptable to me that we would not even have the chance. Under those circumstances, I cannot agree to this motion. If we defeat this cloture motion, hopefully we would be able to take up a better bill and debate it. I believe we must fight harder and fight longer, to the end of December if necessary, for a bill that extends unemployment benefits and takes other steps that are essential to the hopes of working families, a bill that is more fiscally prudent, a bill that does not extract the high price that this bill extracts.
If given the chance to address its flaws, I believe the Senate can produce sounder legislation. I hope we will reject this motion for cloture so that we can consider legislation that provides tax relief to middle-income families and aid to those in need without handing billions in unneeded and deficit-increasing benefits to the wealthiest among us.