the capitol, one of america's most symbolic structures. american icons, a three-disc dvd set. it's $24.95 plus shipping and handling. order online at c-span.org/store. >> now to an event with karen mills, head of the small business administration. she talks about efforts to increase capital for small businesses and the potential impact of health care legislation. from the national press club, this is an hour, ten minutes. [inaudible conversations] >> good afternoon. welcome to the national press club for our speakers luncheon. i'm a reporter for "usa today," i'm president of the national press club.

we're the world's leading professional organization for journalists, and we are committed to future of journalism by providing informative programming and journalism education and fostering a free press worldwide. for more information about the national press club, please, visit our web site at www.press.org. on behalf of our 3,500 members worldwide, i'd like to welcome our speaker and our guests in the audience today. i'd also like to welcome those of you who are watching us on c-span. we're looking forward to today's speech and afterwards i'll ask as many questions from the audience as time permits. please, hold your applause during the speech so we have time for as many questions as possible. i'd like to explain that if you hear applause, it may be from the guests and members of the general public who attend our luncheons and not necessarily from the working press. [laughter] i'd now like to introduce our

head table guests and ask them to stand briefly when their names are called. from your right, nina easton of fortune magazine, mark of bloomberg, carrie lynn mitchell of federal news service. joe adler, a reporter at american banker. mike norton of team critical care and a guest of our speaker. doug hard protect of hip linger and a past president of the national press club. becca gould, vice president of government affairs and a guest of our speaker. skipping over the podium, angela keane, bloomberg news and chair of the national press club speakers committee. skip over our speaker for just a moment, deborah, speaker committee member who organized today's e vercht -- event. grace kit mar, trusted mission solutions incorporated and a guest of our speaker.

marilyn, senior business editor of npr, nancy waits of reuters, and finally paul marion, washington bureau chief of crane's chicago business. [applause] while the nation has trained its attentions on the excesses of wall street, main street has suffered quietly. small businesses typically drive job creation, but the news from main street has been dismal lately. banks have reportedly cut more than $10 billion from their small business lending over the last six months. businesses with fewer employees cut another 6 # ,000 workers -- 68,000 workers in november. at president obama's jobs smut earlier this month, the message was clear: no jobs without growth, no growth without credit. as the recession continues and the rate of joblessness remains

troubling, labor leaders and democrats in congress have suggested that the obama administration turn its attention and its bailout money to small businesses. the president prodded bankers today to make more small business loans. our guest today is one of the administration officials charged with trying to fix the situation. karen mills runs the united states small business administration. the sba is the nation's single -- largest single financial backer of small business. the sba was created in the 1950s when most banks did not like to lend to small business. the thinking was if you could provide the bank a guarantee in order to make the loan, you could spur credit in amounts large and small for american entrepreneurs. today sba provides direct and guaranteed loans, technical help and training, government contracting programs and even disaster assistance.

karen mills, who holds an economics degree and mba from harvard, was a venture capitalist and business manager before she came to washington from maine earlier this year to join the obama administration. she ran two successful capital ventures, investing in and guiding a range of businesses and serving as a management consultant. in maine she also served on the governor's council on competitiveness and the economy. her challenge today is to help millions of small businesses get back on solid ground. so we welcome hearing today from the head of the small business administration to hear about the jobs, the economy, and the outlook for small businesses. please help me welcome to the national press club small business administrator, karen mills. [applause] ..

>> i know that many of you recognize that maine is the home to many small businesses. and in fact, this weekend i was home, and i was walking down main street, which we spelled maine. i saw many of the people who really are the reason why i come to work every day. and they are the force that is behind the american economy. so i'm walking down main street, and i was looking at henry and

marty's restaurant. henry and marty retired three years ago, and they were able to sell their restaurant to their employees and continue the tradition of great scallops and lobster and maine food on maine street because of an sba loan. and then i went by another scot they porch swings, this is an entrepreneur who was a school nurse at the elementary school. and she had a historical design for an authentic maine porch swing. right now she makes those in brunswick, maine. energy exports them all over the country and all over the world. so on main street, you can really feel the pulse of small business community. and even in tough times like this, easy to see how small businesses are the engine of our economy. so here are the facts. half of the people who work in

this country own or work for a small business. and 64 percent of the jobs that were created in the private sector over the last 15 years came from small businesses. is our entrepreneurs. it's the small business owners that are also going to be able to drive america's ability to innovate and stay competitive across the globe. you know, this week is an anniversary for me. a year ago this week the president asked me to come and serve in the small business administration. it was a tough time, a year ago. we had just had meltdown in the financial markets. we had a freeze in credit in both conventional and in sba flounce. but the new administration and congress got behind small business. because we knew that they would be an essential part of the

recovery. so today, i want to talk about the progress that we're making and helping small business put the brakes on recession, and i wanted to describe how we're going to continue to build small businesses and create jobs in 2010. at the sba, our mission is to help small businesses start and grow. we do this in the three main areas. access to capital, opportunities in federal contracting, and developing entrepreneurs. or more simply, the three c's, capital, contracting, counseling. the first seediest capital. as you might know, small businesses rely on access to bank credit. much more than big business. at the sba, you may not be aware but we have a portfolio of over

$90 billion in loans and loan guarantees. these are helping businesses get the credit they need to grow, and create jobs. and we do this by partnering with over 5000 banks, credit unions, and other institutions. a year ago, credit has frozen. with the recovery act, we needed to get this credit flowing again so we made to temporary changes to our major programs, seven a. and the 504 program. first we reduced or eliminated our loan fees. so that we could let small businesses keep more of that money and put it to work in the businesses. second, we increase the guarantee on 7-a loves to 90%, and that helped the bank be more likely to land. that formula worked. our average weekly loan volume increased more than 80 percent

from the weeks before the recovery act. and as of now in the past few months, we are back up to higher low-level than in 2007 and in 2008. here's the headline. we leveraged 375 million stimulus funds into more than 16 billion the hands of lending to america's small business. not only is that a good return on investment for taxpayers, but its 16 billion in the hands of the people who know exactly how to put that money to work. in addition, we brought more than 1200 lenders who had not made an sba loan since october when the credit markets rose, and tell the recovery act. we brought 1200 lenders back to

sba lending. and our goal in 2010 is to keep adding to this, because we want to focus on having more points of access for small business to come and be able to get sba loans. the impact of this very real, for people like mike norton who is sitting up here, wave, mike. and katie is here also. hardware in the business. they own a company called team critical care in maryland. and it runs the anklets is that serve the local hospital. i asked them before, did you ever drive and a good start i think they did at the beginning of the business. they started their business three years ago. everything was fine, until they had a conventional line of credit and it was unexpectedly called in. so in june, they had to go find a new lender. and that led to help get them an sba loan for $300,000.

now they saved $8000 from reduced fees, and they've hired 18 more employees. so mike told us that this loan literally saved their business. [applause] >> so thank you for being here. thank you for coming, mike and katie. and also for the work that you do to save lives every day. we can't stop there. we have progress without access to capital. but now we are working on small businesses benefiting from recovery act contract. the second c. at the sba, we help ensure that small businesses get access to 23 percent of all federal contracts. i describe this as a win-win. because contracts are like oxygen. they are the revenue that small

businesses need to grow their business, and create more jobs. and especially at this time when revenues are tight, recovery act contract are even more helpful. and this is good also for the taxpayers. because the federal government gets access to some of the most nimble and innovative, small companies, sometimes with even a direct line to the cbo. in august, the vice president asked commerce secretary terry locke and me to make sure that federal contracts were heading to small businesses. especially those owned by women, minorities, and veterans. and since then, we have worked together and our team have created about 300 outreach events. they are called matchmaking events. our goal is to put the right procurement officer together

with the right small business. some people say that's like speed dating. we prefer to think that we are creating long-term relationships. maybe like match.com. so far, we are actually exceeding our goals in the recovery act. we are exceeding those goals. we've got about 5 billion in recovery act dollars in the hands of small businesses, and we are exceeding some of our subgoals also. such as those with service disabled veterans. we are also very focused on the women and minority owned firms getting access to federal contracts, because of these two sectors, the women and minority owned businesses, are some of the fastest-growing sectors in all of small business. so we have capital. we have contracts. the third c is the counseling. i want to touch on this because many of you don't know about the extent of our counseling

network. i call it the fda bone structure. the backbone is our sba employees. we have over 100 field offices all across the country. we are a small agency with a big mission. our most valuable asset in achieving that mission is our people. we also have 14000, 14000 affiliated counselors. these include 900 small business development centers. mostly located at community colleges, local universities. we have more than 100 women's business centers. we say that we have a counselor within 45 minutes to an hour of most small business that are out there. and we have 370 chapters of our mentoring program, which is called score. altogether, these folks serve

more than a million clients a year. this past year we have been working particularly hard because small business owners have had to shift gears in order to survive. many of them have come in to redo their business plan. and these people are helping new entrepreneurs start up businesses. i want to point out who runs scored. he has an entire volunteer army. of retired executives. and he has challenged them over the next five years to create, help create over a million small businesses. i always tell -- [applause] >> you know, i come to these gatherings. i did all of the country, and there are small business owners there and i asked them to raise their hand if they have sba counselor.

and if they don't, i tell them they should. because our data show that when you have a long-term counseling relationship, you have a better sales, higher profits, and you hire more people. the best part of that is that all of these services are free. another tool in our counseling toolbox is sba's partnership with the private sector. on that note i'm very happy to be here to announce that we are launching a new online partnership today called strategies for growth with depth, which is a company that know something about growth. they started in 1984 with $1000 of startup capital. some of the best advice that a small business owner can get comes from someone who has been in their shoes. that's what is in strategies for

growth. it is video and it is online and it shows you how to get contracts and how to export, how to create jobs. and i want to thank becca gould who is here from dell for being here today. and grace who is here who is the ceo of trusted mission solution. that is one of our great i.t. companies. she has a number of federal contracts, and she is a star in the video as well. and has anyone in this room ever eaten a cupcake from cake love? right? yeah. all right. warren, you're going to have to stand up. warren brown is here and he started cake love. he told you earlier that he is expanding. he is going to open a new location. can't tell you where yet, and maybe he will say. and hire more employees. so thank you very much. he is also a star of strategies for growth telling other people how to grow their business. so thank you, warren.

thank you, grace. thank you, becca, for being here today to help kick this off. thank you. [applause] >> so we've covered capital. we've covered contracting. and counseling. and through those, we at the sba have helped small businesses, long way in 2009. but what about now? the president said, i'm going to quote. he said we will not rest until businesses, small businesses are investing again. businesses are hiring again, and people have worked. in each recession, we know that job growth lags behind the economy. so we are seeing the pick up, and we are focusing on how to make sure that small businesses have the tools and the incentives that they need to create jobs and to create them

as quickly as possible. so what are we doing? well, the first thing that we did is we listen to. and some of you actually were in attendance for have seen that tim geithner and i held a forum last month, a small business lending. and that in turn set the stage for the small businesses job summit where tim and i had another form, we had small businesses there. we had banks there, community banks, large banks. and that in turn contributed to the roll out last week of the jobs plan in which small business was a priority. process has been a great way for us to get input directly from small business owners. so it's not surprising that this plan, this jobs plan, has a very broad support from the small business community. because it's built on things that work.

i mentioned before the waived fees. the increased 90% guarantee in hour-long program is exactly what they were supposed to do. they worked so well, in fact, that we ran out of steam as funds before thanksgiving. it was months before it was to expire. small business owners in our lending partners are very vocal about the need to continue these provisions. and that's why the jobs plan calls for them to be extended through the end of 2000. in addition, we are asking congress to increase our loan size of $2 million to $5 million. based on what we've heard from small business owners, as well as our own hard data, we know that demand exists out there for these larger loans. and there's no reason that we

can't meet that demand and help these small business owners create jobs. extending our recovery act alone provision. increasing our loan size. those are good first steps. but they are also, committed by the administration who is working to encourage more conventional small business loans. in fact, i am sure that you know that right this point, maybe not at this very minute, but in the last hour, the president himself met with the top u.s. bank on this very topic. we're also not going to stop there. the small business community told us that tax incentives are critical. for example, you might remember that in the stimulus we had the carryback provisions for small business. and that has been actually

renewed. the president signed legislation extending that to 2009 as well, and already i think it is accounted for about 5 billion in tax relief for small businesses. that's my right in the hands of small businesses, off their taxes, this year. we're going to build on this and the jobs plan that calls for congress to extend the tax write-off, the accelerated depreciation for investment and equipment, and to completely eliminate capital gains taxes for people who invest in small businesses in 2010. furthermore, the administration is talking with congress about a short-term tax cut that will accelerate new hires. with this tax cut, we want to be able to say to small business owners, don't wait, go ahead, make that higher. you can do it now.

jobs plan businesses for small -- jobs plan benefits for small business don't stop there. the money for energy retrofits also helps many small businesses that specialize and weatherization and in renewable energy. and in fact, we have some experience already with that because the sba approved in the recovery act over 300 loans, 100 million, for businesses that put solar panels on rooftops, that install wind turbines and that provide energy efficiency and environmental services. so this leads me to a key focus that i have set at the sba. we are focused both on creating jobs in the short term, and at the same time, we are working to help those small, innovative businesses that are the foundation stone for america's

long-term competitive position. in fact, there are really two kinds of small businesses. there's the small businesses on main street. and these are the restaurants and the dry cleaners and the car repair operations that are a part of the fabric of our everyday life. the sba serves those small businesses on main street, and we have since we were founded in 1953, and we're going to continue to do so. but in addition, we have a unique opportunity to build america's future by investing in the high-growth, high impact small businesses. they are sometime called gazelles. there is one study. it shows there are about 375,000 of these small businesses. and they are not all young, high tech startups on one coast, east coast or the west coast. no. instead, they exist in every county.

both rural and urban. all across the country. they are in every industry, including manufacturing. some are the young high-tech startups and alternative energy and health care information technology. others are hundred year old, third generation company, that have found a way to reinvent themselves for the 21st century. at the sba, we are committed to helping these important job generators. i'm going to tell you two quick ways that we are going to do that. the first is exporting. trade has been global for america's big companies for decades. but with the growth of global networks and communications, new markets have opened up for small businesses. since 2003, america's small business exports have grown

about 80%. there are nearly 500 billion now in sales. but the problem is that these exports are now only 30 percent of the total exports of the country. and more than half of the small businesses that export, they only export to one country. we're helping lead an interagency group, cross government, that's going to change that. we are going to increase both the number of entrepreneurs who export, and the number of countries that they export to. i would just give you one quick success story. i love this country. southwest wind power. it was founded in 1987 in a garage. really, in a garage in flagstaff arizona. in 1995, they got an sba loan. and since then this company has made 160,000 small wind turbines. and they power offshore oil platforms and telecommunication

towers at homes and schools, in 90 countries. they have 100 employees and they are hiring even more because they have a hold supply chain they are building up to expand. they saw the demand of broad. they are meeting it, and we're going to create more exporting successful small businesses just like this. the second quick idea is something i have worked a lot with, with some of my friends from brookings who are here. regional innovation clusters. several years ago up in maine we knew that our naval air station in my home town of brunswick was going to lose a lot of jobs. and the governor asked me to find some innovative small businesses who would help and go there. so we looked around to see what our assets were, and we saw that maine has been building boats for over 400 years. and at the university of maine,

there was new technology, cutting edge technology in the posits that made both holes that were the fastest and the light is in the room. so we formed a cluster of these independent maine boat builders and we leverage this new technology. branded it maine boat and maine is now exporting boats as far away as shanghai. at the sba, this year we did it again. we saw that there were all these small automotive suppliers in hard hit areas, michigan. and i actually went to detroit and kicked off this cluster. they had expertise in the state-of-the-art area of robotics. and this expertise was very interested -- interesting to our department of defense. so we put this cluster together, and as i said, i went out. and it is extraordinary how,

when you get the universities with the expertise, for small businesses with the expertise, and at this time, the department of defense, how many opportunities we are creating. because of these suppliers are now diversified out of the automotive industries and supplying unmanned military vehicles and much more. in 2010 we are going to expand this cluster to other locations in the united states, and we're going to establish even more regional innovation clusters. we're also going to push exports because we know we can help these high-growth, small businesses turn innovation into jobs. so, in closing, we have three sees. we have kappel, we got contracts contacts, and we've got counseling. that are really part of the bone structure of the whole small business administration. at the same time, we're going to push ahead in export and

clustering. and we know that if we do this, we can give small businesses the tools they need to grow and prosper, create jobs, and drive our economy once more. i've been working in small businesses most of my life. i've had the chance this year to seek their resiliency, strength throughout the whole united states. i've heard a great success stories here in d.c. we've had trussed mission solutions and team medical care, k. club, many more. i have traveled all around the country. i met this guy, sanyo, and chicago, and he had walked into one of our small business development center's with technology that does titanium infused molds for the automotive industry. now he has -- he had zero business expense and now he has a company that is supplying state-of-the-art technology, and

he has offices in ohio, in michigan, and wisconsin. and he is still growing. stories like these that inspire me. when i go home, for the holidays, i'm going to see the familiar shops on main street. and i'm going to see all of these high-growth businesses that are operating all around the country. these are the businesses that inspire me personally. they inspire everyone at the sba. and they are the inspiration for all americans, because they are the forces that are going to create the jobs that we need, and the innovation that is going to keep the american economy competitive all across the globe. thank you for having me here. [applause]

>> we have all kinds of questions. and we will get started right away. risky lending is part of the reason the u.s. economy tanked. how do you balance the call for more living with the desire to not repeat past mistakes? >> thank you. you know, right now as you know, we are still looking at an environment where there is not enough lindane the small business. and we know that there is still good companies out there that can't get the credit that they need. our credit scores on our loans have actually gone up in this environment. they have gone up. so we are not making riskier loans. we are actually seeing more great companies out there, and this is why today, across the administration, we have urged banks to come back into this

market and make the loans to those companies. because without the credit, as the economy perks up, and they need to expand their inventory and higher that next worker, they're going to need that capital to grow. >> so how does the sba protect itself against people who are irresponsible in getting loans, like the mortgage borrowers who cannot meet their obligations? >> is very important, as you know, we work through our 5000 banking partners that are out there. and we have very strict credit standards about what is an appropriate sba lona. so when we go out there, we are providing access and opportunities to viable businesses that the market isn't serving. we actually have fairly low default rates in our sba lending. but what's important is that we are providing access and

opportunity through 5000 lending partners who have strict credit procedures that we also oversee, because this is taxpayers money. so it is very important that we not put it at risk in risky situations. that we instead find those a viable businesses and make sure that they have access. >> what leverage do you really have with the big banks? >> well, these banks are our partners. you know, we have a 5000 banks and we have many, many community banks that our partners. but we also have sba operations in pretty much all of the large lending institutions. so we talk to them every single day, and they have -- i will have to say, they have stepped up in these recovery act progress. they have put more emphasis in their sba lending, and as i say, we have 1200 banks who have

stopped lending, who have come back to our program today. so we know that when we had these relationships with them, they will come back and they will serve this market. >> why do the banks want to work with the sba? >> the sba provides a very important function. the conventional marketplace operates foremost a bank lending it if you can get a loan from a bank, why should you get -- why should the taxpayers subsidize your loan? you should just get that loan. but if you are a viable business, and for various reasons the market is not serving you, that's where the sba comes in. so banks are able to get our help with a little more credit support to stretch for those viable businesses that for some reason, they need some additional credit help. and that's why they want to work for us because we expand their possibility. we partner with them so that we

work very often through their processes and procedures. and we allow them to serve more clients, who then very often grow and take out conventional loans. >> do you blame a bank regulars like the fdic for the trend of the tightening credit? >> we work very closely with all of the regulators. we are just talking to the fdic who are trying very hard to work and repair banks and make sure that the crises and the dislocations that we've had, which are very bad for small business, are put to rest. and that we move forward with a strong and viable banking system. from our perspective, we have enormous faith in our banking partners right now who are stepping up and partnering with us. one of the benefits of an sba guarantee is that portion of it

doesn't have to go against their balance sheet. so at the moment, it's a very good way for banks to partner with us, stretch out and make some of the credit available that they know the marketplace needs. so we have very good, i think, ballis at this time. >> what conditions would need to occur for the administration to consider making direct loans to small businesses? >> well, once again, i want to mention that we have a network out there of banks that we work through. so for us to be in every corner of every state as we are now, we have 5000 partners who have an sba loan. we have just about 3000, just under 3000 who have made an sba loan in the last year. that's a pretty powerful network. so our choice, what we are advocating, is to continue what works. we know that we are able to get

1200 banks back to lending who had stopped with the 90% guarantee of the fee reduction. so we know that if we can continue to do that, and we can get, as the president is urging today, banks have back making conventional loans, and we can increase the size of our loan limits, which allows us to reach a broader group, we believe that that would be the right formula to serve the marketplace that's not getting served today. >> isn't access to capital threatened since the stimulus funds ran out in november and? >> yes. as i mentioned, the stimulus funds did run out. now, we went from a 90% guarantee to a 75% guarantee. so we are still in business. and we created a queue for small businesses who want to wait for the 90% guarantee if congress comes back with that activity.

so if you've ever been to the airport, use your name on the standby list, it's a new technology, an open portal and you can go in and see where your name is on the queue. and we think that those things, combined with still being in business with our current products, is going to be able to serve the market. >> what are the prospects of sb 2869 passing before congress adjourned. do you know that when? >> no, i do not. >> if you asked a question, try to avoid acronyms in a senate bill numbers. so we will move on to a psychological question for you. do you feel misunderstood by congress? do you think congress understands you? [laughter] >> i absolutely feel congress understands our agency. when you have -- when you're in congress and you go home to your

district, they are hearing from our small businesses and their small businesses every day. so when i go to the hill, i know that each member is really focused on solving these issues for small business. we have two terrific committee to oversee a. one in the house and one in the senate. they have been doing this a long time. they provide enormous attention to these issues. and are really focused on solving some of these problems. so we have actually quite a good partnership. >> many displaced workers look at starting a business as an alternative. however, banks are hesitant to fund startups that are there any plans to enhance funding resources for startup businesses? >> well, having been in the start of business, funded startup businesses, this is very dear to my heart. we have terrific resources. we were able to get $50 million of additional microloans money to put out into the communitie s

through our network of microloans lenders. so we are everyday actively helping people start up their businesses. sometimes it's just a cookie store on main street, and sometimes it's going to be the next dell. so we also have our score counselors, remember? who are 12000 of them out there with a mission to help create a million small businesses. these are people who have been and may be very business, and they also do their counseling online. so we are quite active right now from both the capitol and the counseling for small business startup. >> small manufacturers say they have special hardships that make it next to impossible to get an sba loan. what specifically will you do to help factory owners? >> actually, factory owners are very, very much a part of the

core sba lending. so i will have to do more, whoever said that, about what the issues are. we have particular higher limits on our 504 loans for manufacturing. operations so that they can buy their building and more equipment. and we have quite a few in our 7(a) program. so i would have to say that sba is quite focused on manufacturing operations. i am particularly focused on because most of my small business experience is a manufacturing. >> apart from financial institutions, do you see a deeper partnership with larger companies who are suppliers of small businesses? >> well, as you know, we are responsible for helping ensure that 23 percent of all federal contracts go to small businesses. very often, in all agencies that the department of defense department of defense, for instance, this happens through partnerships we call mentor protége.

small businesses and big businesses partnering together. because big business is more than ever before did a whole supply chain of small businesses behind them. and they really focused on this so they have come to us and asked for even additional help. and this is for real partnerships. this is not for a big company, you know, masquerading as a small copy. this is for big companies to make sure they have the best innovation, which very often happens in a small company and has a partnership of the small company so that their supply chain allows them to operate with the best possible products and uninterrupted fashion. >> with the passage of the recent appropriations bill, how great a reduction in fees can borrowers expect when obtaining an sba loan? >> in the recovery act, we are able to fund the full elimination of barware fees for

our 504 and for our 7(a) loan as well. we are now in a point where the president has asked congress, and we have asked congress, to continue that for the next year. so we are hoping to have that he elimination for borrowers continue through the whole of 2010. >> do you think the senate will approve the bill to increase 7(a) and 504 maximums? >> in fact, both senators snowe and senator landrieu have put in bills to increase the maxim to $5 million. we feel that this actually can bring a lot more small businesses into our network and allow us to fund the particularly in these times of tight credit. but we will not let those big loan to crowd out the small boats. we are going to make sure that we also keep taking care of all of our small customers as well.

>> all right. so congress was giving you love, but somebody else wants to ask, what do you say to small business group that argued the best way to help small business is for government to get out of the way? >> one of our responsibilities is to make sure that -- we watch out for small businesses. and that small business do not suffer unintended consequences of other regulations. this is something we take very seriously, and we have a great office of advocacy that operates independently and focuses quite a bit on this issue. we have an entire group, that you may not know about, called the omnibus when. and their sole job is to help small businesses navigate through regulatory issues. so if you are a small business and you are out there, one of our main missions is to help you navigate through these kind of issues. >> what help can sba offer and

reducing taxes on small businesses such as payroll tax? >> well, right now we are in discussion to do some kind of new tax reductions. the administration is talking to congress about all kinds of plans that might reduce various kinds of payroll taxes or other things to support new hires. in addition, the tax incentives that have been proposed in the jobs plan from proven benefits for small business. i just wanted them a man on the accelerator appreciation, which is very beneficial if you're going out and you want to buy a piece of equipment, you're going to be able to write out much more of it right now. so this is directly into small businesses to help them expand. the same with the tax laws carryback. very powerful. $5 million already out helping small business. it allows small business to get

the immediate benefit. when they file their taxes, they can write off losses against the last five years. so that can mean cash right back in the pocket of a small business. >> the federal tax incentives are admirable, but are financially pressed cities and states going to hurt small businesses through higher taxes and fees and by reducing services? >> well, this issue of what's going to happen in state and local governments is very much on everyone's mind. i know bruce katz is here from brookings, from the metropolitan division there, and really focuses on the 100 metros that really drive our economy. these are critical pieces of our economy. small businesses operate there. they depend on them, and we need to make sure that they can operate so that small businesses can operate there.

>> are there any particular parts of the country or industries in trouble that have really captured up at night? >> you know, i traveled around really every week since i think july all the way through until quite recently. and i've been in every region, every region. and we have an economy in many places that's in transformation. we have to make sure that we work in those regions to make sure we have, for instance, the clusters of activity that are going to allow the companies and the jobs to turn to what is going to be successful in this next year going forward. and we have a lot of tools out there that can do it. we have great emphasis at the federal level on workforce training, and a lot of resources going down there.

we have all of our sba network and bone structure that lives in every one of these metropolitan areas, every one of these states. we have universities and innovation will creation all across these areas. that's one of the reasons why i'm such a big fan of these clusters, of these innovation hubs. because a lot of them will involve small businesses, and lots of them in these more troubled areas, i was in kokomo, indiana, 25 percent of the employment in that town is chrysler. but they already have an accelerator. they already have innovation. they have trained engineers that our job is to make sure we got entrepreneurs starting businesses, creating environments where we can take that innovation, turn it into jobs, turn it into products that are competitive around the country. we are very focused on that. >> the small business investment companies program is part of the

sba. this program is operating in only 20 percent of capacity, leading to .4 billion fy 2009. what are you doing to get this unused money out to small businesses? >> i want to point out fred palmer here and the groups, there are several of you here. i know that you're going to be out there helping us use this money. we actually have a terrific person now who's heading the area. i want to introduce shawn green. i don't know if he is here. but has a great expect in this area, and i will tell you what we are finding. our applications for these have gone way up. we are getting the highest quality, people coming in. we have tremendous new innovation in how we are working with those applicants. we are taking our leadtime down, announced a fast track program for particular set of folks that we've been working with already.

we're going to get you applications through much faster. so i would anticipate that we are going to be very able to put that money to work over the coming year. >> with the increased focus in financing available, will you be able to hire more people to manage trantwo's, in particular the approval process? >> i think just answered, i think yes there's a great unity out there that we are partners with. we have folks at the sba with great expertise in this area, and that is a capital gap. there is a valley of death, and we are helping people at the early stages, and we are helping them get all the way through that area. we must feel that ballet of death with access to capital and opportunity if we are going to create these innovative companies that i described earlier. so we are focused on it, and i think we're going to have the

expertise, and the partnerships with the entrepreneurs and the fund managers that are going to allow us to do it. >> you often hear people say government should run like a business. said to have run a business, is this reasonable and how are your challenge is now different from when you were running a business? >> you know, i have a great team at the sba. and when you are running any kind of operation, you know that your greatest asset is your people. when you look at what is available in the small business administration, 90 billion-dollar loans available, 14000 affiliated counselors, 5000 thanks to our network, our partners, all across the country. and we have the relationship with all of our fellow agencies

to work together in order to get small businesses these contracts. what i find in the sba, that we have enormous asset. so it makes my job as the leader, quite easy. because i have only to empower these great people, and help us i think work together, not in silos, but as a team, to help our constituents small business. i also find that if you have a great mission, it's pretty easy to get some passion and enthusiasm and energy against the problem. and that's what we have today. >> okay. we are just about out of time. we have a few more questions. but before i asked the last question i have a few important matters to take care of the. first of all let me remind you of our future speakers. on december 21, francis s. collins, m.d., phd and director of nih will discuss biomedical

research, new horizons for human health. on january 11, richard, newly elected president of the afl-cio will discuss major domestic legislative initiatives. and second, i would like to present our guest with the traditional and much coveted nbc coffee mug. [laughter] [applause] >> i need is. thank you very much. >> all right. something to wake up early in the morning with. so, here's your last question. knowing the economy was on the verge of collapse and you would be in the hot seat, what persuaded you to take this job? did president obama make any specific pledges regarding the ncaa small business and how did you get on his radar screen? >> well, i actually had a job

interview about a year ago, maybe today, and i went out to see the president. i was on the transition team. and what i realized, and i told you the economy was in a meltdown, i have a passion for small business. this president really cares about small businesses. and i was out at in landover maryland. we did an event where we were at a small business and the president was talking and i was standing behind the president. and he finished his prepared remarks, and i knew he was finished. so i did know what he was going to say. and he said this. he said, to all the small businesses who are out there, i can imagine how difficult things might be, and how tough it is to run your business in this economy. but you should know this. this administration is committed

to small business, because we know when you succeed, america succeeds. the president believes that. i believe that. so i am honored to serve. thank you very much for having me. [applause] >> i'd like to thank you all for coming today. i also like to thank the national press club staff members, melinda cooke and pat nelson and joanne booze who organized today's lunch. also thanks to the national press club library for its research. the video archives of today's luncheon is provided by the national press club's broadcast operations center. and our events are available for free download on itunes, as well as on our website. non-members may purchase transcripts, audio and video tapes by calling two '02 662-7598, or e-mailing us at

archives at press.org. for more information about the national press club, please visit our website at www.press.org. thank you very much for your time, and we are adjourned. [applause] [inaudible conversations] [inaudible conversations] >> american icon, three original documentaries from c-span. now available on dvd. a unique journey through the iconic homes of the three branches of american government. see the exquisite details of the supreme court through the eyes of the justices. go beyond the velvet ropes of public tours into those rarely seen spaces of the white house. america's most famous home. and explore the history, art and architecture of the capital. one of america's most symbolic structures. american icons, a three disc dvd set. it $24.95 plus shipping and handling. order online at

c-span.org/store. >> the senate is about to start day 13 of the health care debate today. senators plan to finish debate on the motion even with the buying prescription drugs from other countries and middle-class taxes to the senate will recess for several hours at 12:30 p.m. eastern for their weekly meetings. democrats will be going to the white house to meet with president obama on health care. they are try to come up with a bill that will draw the needed 60 votes to pass health care out of the senate and into negotiations with the house. amendment debate will continue when the senator's return later at 3:15 p.m. eastern. the house also coming in at this hour. the resolution against the iranian petroleum industry on their agenda. lighthouse coverage on c-span. and now lives senate coverage here on c-span2 the chaplain: let us pray.

loving god, you know our weaknesses and the extent of our failure to love you and one another. look upon us with mercy and use us to heal the hurt in our world. establish the labor of our lawmakers, strengthening them to honor you by serving others. let your life-giving spirit move them to feel greater compassion for those in need. use them to remove barriers that

divide us, as they help all to live in greater justice and peace. lord, give our senators a daily respect and submission to your will and commands. we pray in your sovereign name. amen. the presiding officer: please join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the presiding officer: the clerk will read a communication to the senate. the clerk: washington d.c.,

december 15, 2009. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable roland burris, a senator from the state of illinois, to perform the duties of the chair. signed: robert c. byrd, presidet pro tempore. mr. reid: mr. president? promise the majority leader is recognized. mr. reid: following leader remarks the senate bill resume consideration of the h.r. 35990. there will be time for debate. we can never determine for sure, mr. president, but it appears votes should start between 5:00 and 6:00. the senate will be in recess from 12:45 until 3:15 today for the the weekly caucus luncheons.

mr. mcconnell: mr. president? the presiding officer: the republican leader is recognized. mr. mcconnell: mr. president, with americans now really focusing in on the health care debate, it's important to take a step back and recall where we started, because somewhere -l along the way democratic leaders took their eyes off the ball. it's a good time to remember what this reform debate was all about. the goal of this legislation, by all accounts, everyone agreed the goal was to lower the cost of health care. this is what the president has to say. it's a direct quote. "the bill i sign," according to

the president, "must slow the growth of health care costs in the long run." that was july 22 of this year. yet where we are nearly five months later, the administration's own scorekeeper, the c.m.s. actuary -- that's the center for medicaid and medicare services actuary -- says the democratic bill will actually drive costs up, exactly the opposite of what the debate was all about in the beginning and exactly opposed to what the president indicated on july 22, that he wouldn't sign such a bill. remember, the purpose of reform was to lower people's insurance premiums as well, and here's what the president had to say about that. a direct quote -- "i have made a solemn pledge," said the president, "that i will sign a universal health care bill into law by the end of my first term as president that will cut the

cost of a typical family's premiums by up to $2,500 a year." that's the president campaigning for president, june 24, 2007. "a solemn pledge that i will sign a universal health care bill into law that will cut the cost of a typical family's premiums by up to $2,500 a year." yet now we're being told by the administration's own nonpartisan scorekeeper -- again the c.m.s. actuary -- that new fees for drugs, devices and insurance plans will drive insurance premiums up. the purpose of reform was also to ease the burden on taxpayers. here's what the president had to say about that: "no family making less than $250,000 a year will see any form of tax increase." that's the president september

12, 2008. "no family, not a one, no family making less than $250,000 a year will see any form of tax increase." yet now we're told by the independent an list that the -- annual list that the taxes will go up for those making under $250,000 a year. people who like the plans they have are told they'd be able to keep them. here's what the president had to say about that: "if you like your current plan -- if you like your current plan, you'll be able to keep it." and then he said, "let me repeat that. if you like your plan, you'll be able to keep it." that was july 21, 2009, just this summer. yet now we're told by the independent analysts like the

congressional budget office that millions of americans will lose their employer-based coverage and millions of seniors will see their extra benefits cut by about half. now, americans are looking at this, mr. president, and they are truly outraged. the american people are outraged at what's happening here. they can't understand what we are doing. the latest cnn poll says 61% of americans oppose this bill. 61% of the american people are saying don't pass this bill. this bill is completely out of touch with the american public. think about it. one out of ten working americans is looking for a job, and democratic leaders in washington want to spend $2.5 trillion on a bill that makes existing problems worse. one out of ten americans out of

work, and yet the majority seeks to pass a bill that makes the existing problems worse. and yet, democratic leaders in washington are still insisting that we pass this bill. even as opposition grows, supporters of the bill are drafting plans and cutting deals to make this bill the law of the land by christmas, ignoring the will of the american people, off in a room somewhere cutting plans and making deals, trying to figure out some way to jam the american people when they are asking us overwhelmingly please don't pass this bill. you get the impression that the supporters of this bill think it's about them, about them and their legacies. well, this isn't about them. this is about the american people. it's not about making history. this is about doing the right

thing for every single american's health care. and americans have a message: higher premiums, higher taxes, higher health care costs are not what they signed up for. this is not what they were promised. this is not reform. yes, doing nothing is not an option, but making current problems worse is worse. now, mr. president, on another subject, i want to wish a fond farewell to one of the nation's finest television news anchors. louisville's own jackie hayes.

after more than three decades in broadcasting, jackie will be retiring and people throughout louisville and across kentucky are sorry to see her go. the level of respect jackie has earned in the community is reflected in the many awards she has won over the years. she's received 16 -- 16 -- best of louisville awards, including numerous honors as best female news anchor. in 2005 she was named best of the best by "louisville" magazine. she has also received the star award from women in radio and television and emmy nominations for her work both in louisville and in philadelphia. jackie's had a lot of wonderful experiences in her career. all in pursuit of getting the best story for her viewers. she's reported live from the scene in the bombing at the 1996 sum olympics in atlanta. she's interspraoud two

president -- interviewed two presidents -- one of them was ronald reagan -- over lunch. she's been a fixture in many louisville homes as she has anchored coverage of the kentucky derby 25 times. once she went up in an fa-18 horpbt with the blue -- hornet, with the blue angels, a u.s. navy flying acro battic team. she flew at 600 knots, nearly 700 miles an hour, and was subjected to seven times the natural -- the normal force of gravity. she may have blacked out briefly with all that force as the instructor told her most people do, but for the thrill of the ride and to better tell her story to her viewers, she says it was worth it. jackie was born in paris, tennessee, right over the border from murray, kentucky, and she attended murray state university on a special presidential

academic scholarship. she was named the outstanding senior in radio and television and began her broadcasting career at a paducah station while still a senior in college. after graduating with highest honors, she went ton to a full-time position until moving to louisville in 1980 to work for wash television. after five years she went to work in philadelphia but in 1988 she returned to kentucky and the river city where she stayed ever since. for the last 21 years since returning to louisville, jackie has been with way-3 news. she is the anchor of that channel's 5:00 and 6:00 p.m. newscast. after 33 years in broadcasting, jackie earned a well-deserved rest and she's looking forward to spending time with her husband paul, their daughters and their dogs. jackie and paul are avid horse riders and i hear they just got a new horse named chipper.

but jackie will be greatly missed by the people of louisville and the surrounding area. every day through the television, viewers have welcomed her into their homes. now we should stop and recognize that we welcome her into our community and our lives as well. so i just wanted to take this moment to thank her for her incredible career on behalf of kentuckians everywhere. mr. president, i yield the floor. the presiding officer: under the previous order, the senate will resume consideration of h.r. 3590 which the clerk will report. the clerk: calendar number 175, h.r. 3590, an act to amend the internal revenue code of 1986 to modify the first-time home buyers credit in the case of members of the armed forces, and certain other federal employees, and for other purposes. the presiding officer: under the previous order, there will be five hours for debate with two hours equally divided between the senator from montana, mr. baucus, and the

senator from idaho, mr. crapo, or their designees. two hours equally divided between the senators from north dakota, mr. dorgan, and the senator from new jersey, mr. lautenberg, or their designees. and one hour under the control of the republican leader or his designee. who yields time? mr. baucus: mr. president? mr. baucus: let me lay out today's program. it has been more than 3 1/2 weeks before the majority leader moved to proceed to the health care reform bill. this is the 14th day that the senate has considered it. the senate has considered 18 amendments. we've conducted 14 roll call votes. today the senate will continue debating the dorgan amendment on prescription drug reimportation and the lautenberg alternative amendment to that amendment. and we will continue debating

the crapo motion on taxes, which i have filed a side by side amendment as well. under the previous order, there will be five hours of debate with each of the following senators controlling one hour: senator from idaho, senator crapo, senator dorgan, the senator from new jersey, senator lautenberg, the republican leader, and this senator. the senate will recess from 12:45 until 3:15 for party conferences. upon the use or yielding back of the five hours of debate, which is likely to be between 5 clock an 6:00 this even, the senate will proceed to vote on four amendments in in order, my side by side amendment on tax cuts, second the crapo motion to commit on taxes, three, the dorgan amendment number 2793, on drug reimportation, and the lautenberg side-by-side amendment number 3156 on drug importation. each amendment will need to get

60 votes or be withdrawn. upon disposition of these amendments and motion the next two senators to offer a motion an amendment will be, first, the senator from texas, senator hutchison, to offer a motion to commit regarding taxes. and, second, the senator from vermont, senator sanders, to offer an amendment number 2837 on single payer. mr. president, under the previous order, it is in order for this senator to offer a side-by side amendment to the motion to commit offered by the senator from idaho, senator crapo. pursuant to that order, i call up my amendment number 3183. the presiding officer: the clerk will report. the clerk: the senator from montana, mr. baucus proposes amendment number 3183. mr. baucus: mr. president? the presiding officer: the senator from montana's recognized. mr. baucus: mr. president, i ask consent that further reading be dispensed with. the presiding officer: without objection, so ordered. mr. baucus: mr. president,

during the presidential campaign president obama promised not to raise taxes on americans who earn less than $200,000 a year or american families who earn less than $250,000 a year. that was his promise. this bill keeps his promise. this bill will provide tax credits to help american families, workers, and small businesses to buy quality health insurance plans through new, fair, and competitive market places called insurance exchanges. the congressional budget office expects by the year 2019, 25 million americans will buy health insurance plans through the new exchanges. and the vast majority of those americans, about 19 million, will receive tax credits, that is, tax reductions for help paying co-pays and other out-of-pocket costs much these

tax credits -- costs. these tax credits will help reduce health insurance costs by nearly 60%. this bill does not raise taxes on the middle class. this bill is a tax cut for americans. over the next 10 years, the health care reform bill will provide $441 billion in tax credits to buy health insurance for american families, workers, and small businesses. $441 billion in tax credits. americans affected by the major tax provisions of this bill will see an overall tax cut of 1.3% in the year 2017. that's a total of $40 billion. that's an average of almost $450 for every taxpayer affected. that same year, 2017, low and middle-income taxpayers will earn between dz 20dz thousand and -- $20,000 and $30,000 will

see a federal tax decrease of nearly 37%. people with incomes -- i'll repeat that, mr. president. i think it's astounding. people with incomes between $20,000 and $30,000 a year will see an average federal tax decrease of nearly 37%. in 2017, the average taxpayer making less than $75,000 will receive a tax credit of more than $1,300. and in 2019, two years later, that tax credit will grow to more than $1,500. without this tax cut, many individuals and families will continue to forego health care because it just costs too much. we make it easier for people to buy health care with those tax cuts. in addition to a tax cut, this bill also represents increased wages in the pockets of millions of americans. even my colleague from idaho agrees that as a result of this bill, americans will see increased wages.

they said the exact thing on the floor last week as a result of this bill, many americans will see increased wages. senator crapo, gave an example of an employee whose health insurance decreased but whose overall compensation did not decrease, as a result the employee received additional wages. what workers are going to complain if they're paid more in taxes? why? because they have more money in their pocket. i mean if their incomes are going up and their wages go up, the taxes will go up correspondingly, but not as much as the wages. a letter from the congressional budget office dated november 18 that states just that on page 18, the congressional budget office says,nd i quote -- "if employers if employers increase or decrease the amount -- amount they provide in the amount of health insurance, the

congressional budget office and joint commission on taxation assume that offsetting changes will occur in wages and other forms of compensation which are generally taxable to hold total compensation roughly the same." mr. president, i have a chart that shows that very point for each of the years this bill is in effect. looking over, first, on the left, 2013, and then it goes each year, 2014, 2015, but the green is the percent of total tax revenue due to wages. and the white is the total due to excise tax, the increased taxes that the person have to pay. increases far outstrip taxes paid according to the congressional budget office and joint committee on taxation. as that chart illustrates, the overwhelming majority of the revenue raised from the excised

tax will come from increased wages. only 17.5% of the wages will be atube routable to the excised test, the rest will come from employee's wages and compensation. i urge my colleagues to recognize the crapo motion to commit for what it really is, and what's that? it's an attempt to dill health care reform. -- to kill health care reform. that's all it's about. nothing more, nothing less. senator grassley said as much last week. senator grassley asked us to vote in favor of the motion to commit and i quote -- "to stop this process right now." direct quote. we must not stop this process, mr. president, we must not stop moving forward in our efforts to reform health care. indeed, we must move forward aggressively. every day that we delay, 14,000 americans lose their health insurance. every year that we delay, 14,000 americans lose their health insurance.

and just a two-week period one in every three americans will go without health care coverage at some point. we cannot afford to stop working toward reform. we must reject any attempt to eliminate the provisions in this bill to provide americans with a tax cut. despite the republican claims that they're trying to protect americans from tax increases in this bill, the facts are this bill is a tax cut for most americans. mr. president, on a related matter, there's been some discussion about the office of actuary analysis of the senate bill. let me just cover two very key points from that letter. the actuary at h.h.s. concludes that this legislation extends the life of the medicare trust fund by nine years.

nine years. we know that the medicare trust fund is -- is in a precarious position. roughly 2017 there's some estimates that this underlying bill would increase the solvency of the trust fund for four to five more years, say to 2022, roughly. the actuary, the person who is the number cruncher at h.h.s., concludes that this legislation will extend the life of the medicare trust fund by nine years. that's no small matter. seniors, and near-seniors are concerned about the solvency of the health care trust fund, it extends the solvency of the health care by nine years. just think, if this is not passed solvency of the health care trust fund would not be extended by nine years. the actuaries say that the medicare trustees say that the medicare trust fund will be insolvent in a few years, 2017.

clearly, it is very important to extend the solvency of the medicare trust fund. how does this legislation extend the solvency of the trust fund? it's very simple, mr. president, we cut out a lot of waste, cut out inefficiency, and make the system work better so it's extended for nine more years. in addition the actuary says that this legislation, by the year 2019, will result in about a $300 per person reduction in premiums. part-b premiums. excuse me, that's per couple. $300 per couple part-b. in addition to that the actuary concludes that the legislation will result in a $400 per couple reduction in cost sharing. add the two together that's bdz dz 700. so by -- $700. so by the year 2019, as a result

of this legislation, according to the actuary, it's in black and white there, it's right there in print, that there will be a $700 reduction in -- in premium part-b and out-of-pocket costs for seniors. that's no small matter, mr. president. a reduction. on the other side of the floor you sometimes hear all of this rhetoric about increases. it's just that, it's rhetoric. the actual analysis is reduction. i hear rhetoric on the other side about this legislation will result in increased premiums for people. not true. the congressional budget office has concluded that for 93% of americans, there will be a reduction in premiums. reduction in premiums. to be fair, for those who already employed, the reduction is not huge, but it's a reduction nonetheless. it's a reduction. we have to work to make it a greater reduction. i dare say, mr. president, i know as sure as i'm standing here, the reduction will be greater. why will it be greater?

because a lot of provisions in this legislation in my view, the congressional budget office just hasn't really analyzed fully like delivery system reforms. like we start to bundle. we have care organizations, we start pilot projects. those will have a -- result of that will be a reduction in -- in costs and, therefore, a reduction in premiums. also calculated is the commission which will look into productiviticy. that's not included in the c.b.o. analysis. if that were included in the c.b.o. analysis, the reduction bo be greater. we're -- would be greater. we're talking about the remaining 7% -- remember the -- the remaining 7% don't get a reduction. well, what do they get in return? they get a much better insurance. we have insurance market reform in this legislation. no more preexisting conditions, no more rescissions, no more denial based on health status, no more company limitation on

annual losses, no more limitations on lifetime losses. on and on and on. so for the same premium, they're going to get a lot better quality. instead of getting used car, they're going to get a new car for roughly the same price. analyze this legislation, it's very clear, reduction in premiums, the c.b.o. says so, the extension of the trust fund solvency, and reduction in premiums and out-of-pocket costs for a couple by $700 by the year 2019, that's what the actuary says. so this -- this legislation has -- lives up to the promise of the -- made earlier, it does not raise taxes for people under $200,000. and i think the legislation should clearly be passed. let me say this too. someone once said, and i'll conclude here, that the status quo is really not the status quo.

if this legislation is not passed, the result is not the status quo. the result is we move backwards. we have two choices here, mr. president. either we move forward as a country and -- and seize this opportunity to tackle health care reform and do our very best to get it right. or we don't -- we do nothing and we keep sliding backwards. just think of the repercussions of not passing this legislation. just think of it. first of all, millions, tens of millions of people will not have health insurance. that in itself is pretty profound. second, we would not have health insurance market reform. we still have detphao*euls based on -- denials based on preexisting conditions. we would not cut down health care costs which our businesses need so much and our families need so much and our budgets need so much.

health care costs are rising so much. medicare is in tough shape. medicaid is in tough shape because health care costs are rising so much. we've got to get a handle on health care costs. c.b.o. says we're doing just that. mr. president, i yield the floor. mr. crapo: mr. president? the presiding officer: the senator from idaho. mr. crapo: mr. president, i ask unanimous consent to speak for up to 40 minutes and to use that 40 minutes in a colloquy with other of my colleagues. the presiding officer: without objection. mr. crapo: i would also ask, mr. president, if you'd give me notice when there are five minutes remaining. the presiding officer: yes. mr. crapo: mr. president, i'm going to engage in a colloquy with some of my colleagues today about the motion that is now pending on which we will vote later this afternoon or early evening. it's simply a motion to commit the bill to the finance committee and have the finance committee make the bill comply with the president's pledge. here's the president's pledge. in the president's own words, "i

can make a firm pledge, no family making less than $250,000 will see their taxes increase. not your income taxes, not your payroll taxes, not your capital gains taxes, not any of your taxes. you will not see any of your taxes increase one single dime." now you've just heard my colleague from montana say that the bill complies with this pledge. in the first phraeurbgs if -- place, if that were true there would be no harm in having the finance bill scour there it and refer the bill back to make sure it doesn't tax those in the middle class. but the reality is it's very clear that this legislation violates this pledge of the president. as a matter of fact, there are over 493 billion dollars of new taxes in this bill meant to offset the $2.5 trillion during its first full years of implementation of spending in

the bill. let's look at this next khafrplt if you look at the -- look at this next chart. this includes the fees also that the c.b.o. and joint taxes says will be passed right on through to the consumer. there are $704 billion of taxes and fees in the first ten years of this bill. if you look at the ten years of full implementation, meaning the first ten years when the spending actually starts, the taxes and fees are actually $1.28 trillion. my colleague says that actually this is a net tax cut bill and that it complies with the president's pledge because when you take all the refundable tax credits in the bill and offset them against these tax increases, there is a net reduction in taxes. in the first place that's not true when you take into account the fees. in the second place, i don't think that's what the president was talking about. he didn't mean, did he, that you won't see your taxes go up more than someone else's taxes go down? no.

he told people in america that they would not see their taxes go up. yet, what this bill does, according to the joint tax analysis, is that by 2019, at least 73 million american households earning below $200,000 will face a tax increase. now, if that's not violating the president's pledge, i don't know what is. but even if you take the numbers that the majority is trying to use here and claim that those are tax cuts -- let's see the next chart -- what my colleague from montana is talking about is about $400 billion of what are called refundable tax credits. and he wants to offset these refundable tax credits in the bill against the hundreds of billions of dollars of tax increases and say there's a net tax cut and, therefore, no problem. well, first of all, as i said,

that is a problem. but secondly, what a refundable tax credit? $288 billion, or 73% of the so-called tax credit, or tax cuts that my colleague from montana is talking about are payments by the federal government to individuals or families who do not have tax liability. it's a direct government subsidy. c.b.o. scores these payments as a federal outlay, as spending, not as tax relief, which is exactly what they are. and so i just think it's a little bit less than credible to say that we have a a tax cut bill here when three-fourths of the tax cut, the so-called tax cuts don't even go to reduce tax liability for taxpayers.

yes. a senator: would the congressional budget office, which is nonpartisan, would it score a welfare payment the same as these tax -- so-called tax credits? mr. crapo: my colleague is exactly right. a welfare payment or a payment of a subsidy to an individual in the united states will be scored as a federal outlay or as federal spending, as is a renewable -- excuse me -- refundable tax credit paid to an individual who has no tax liability. but let's assume that we even accept that argument that that's a tax cut, even if you offset all of that, remember the one chart just a minute ago said 73 million people will pay taxes. even if you give them credit for that argument, there are still going to be 42 million people making less than $200,000 a year who will face a net tax increase. mr. president, that is a violation of the president's pledge and all this motion does is send the bill back to the finance committee that writes tax policy to correct that.

the president pledged, the motion helps this bill comply with the president's pledge. now, the senator from montana also used another example, trying to say, well, but some of these people who are paying more taxes are getting higher wages. this is the game that's going on. the employer of these people that the senator was talking about today provides a salary and health care to that employee. and in this example, it's $50,000 of wages and $10,000 of health care benefits. this bill will now impose a hefty, i think it's a 40% or 45% tax on this health care plan because it's too good of a health care plan. and what c.b.o. and joint tax tell us is that because of that immense tax, 40% or 45% tax, the employer's just going to cut the health care plan down to where it's not taxed anymore and

provide those dollars to the employee with an increased wage. so what will happen is this young lady will get maybe $53,000 in wages instead of $50,000, only $7,000 of health care. and her net employment compensation will still be the same -- $60,000, except that now she'll pay taxes on an extra $3,000. so her net employment package will go down, not up. and she and 42 -- actually 73 million americans like her will end up with a smaller employment package, less health care benefits, and increased federal tax liability. that's the way the bill works. and for issue after issue, there are taxes after taxes after taxes in this bill that are going to be paid by the people in this country who earn less than those in the threshold that the president identified. and that's why we simply ask that the bill be sent to the

finance committee to have this violation of the president's pledge and this bad policy of increasing taxes on the middle class in america to pay for a huge new government entitlement program be removed from the bill. a senator: if i could ask my colleague from idaho? mr. barrasso: i was reading a national publication yesterday and the headline is "making a nightmare out of health care." the editorial says taxes will go up. this says the proposed overhaul contains at least, at last count 13 -- 13 different tax hikes. it goes on to say that -- quote -- "the joint tax committee" and it said for any one person who may end up paying lower taxes, there will be nearly four times as many, close to 70 million people who will pay higher taxes. and that's why i've been waiting now for a week to vote for the crapo amendment. this is something that was introduced last tuesday. well, the whole week has passed, and yet the democrats have been

filibustering and praoefrbting us -- preventing us from voting for this very important amendment that the american people agree with, that we ought to eliminate these taxes. we ought to stick with what the president has promised the american people. as a result of the president's promises, i read a recent cnn poll, one that said 66% of americans oppose what the democrats are proposing, but it gets to the specifics of taxes and increases and what the president promised. it said do you think your taxes would or would not increase if this bill passes? and 85% of the americans polled -- 85% of americans said they believe their taxes will go up. so it just seems to me -- and i ask my friend from idaho, it seems to me that the american people get it, and they realize that they're going to be hit hard with this $500 billion of tax increases, 13 different taxes which will get put on the

backs of the hard-working people of our country. why is it that we're not allowed to vote on this amendment? i'm ready to vote for this amendment. and i appreciate the senator from idaho bringing this amendment forward because clearly the support of the american people is behind you. mr. crapo: i thank my colleague from wyoming for those comments and would give statistics to the point you made. the joint tax committee analyzed the four biggest tax provisions in this bill and has conclude that had only 7% of americans would be receiving these so-called tax cuts that are really spending subsidies but have been characterized as a tax cut in order to argue this bill doesn't increase taxes. only 7% of americans will receive those, which represents about 19 million people. but 157 million people, almost eight times that amount, who get their health insurance through their employer will not be eligible for these credits. and they will pay on average

somewhere between $593 to $670, depending on what their income categories are, a year in new taxes that are clearly and squarely put on their shoulders in this bill. i note my colleague from tennessee is -- mr. alexander: i wanted to congratulate the senator from idaho for his amendment to help the president keep his commitment. that's basically what it is. and i would think that our friends on the other side of the aisle would all want to join us in that. the president said we're not going to raise taxes on people making less than $250,000 a year. it's amazing to hear the comments that i've just heard. i mean, the whole crux of the bill -- when we stop and think about it, regardless of whatever, whatever the democrats decide to do about this so-called public option, they still seem determined, or at least the majority leadership

seems determined to engage in this political kamikaze mission towards an historic mistake. there's all this talk about history. but there are lots of different kinds of history, and a lot of historic mistakes have been made about taxes. for example, there was the smoot-hawley tariff of 1930. that was a big tax. it sounded like a good idea at the time. president hoover, a republican president, recommended, the idea was to protect american jobs by keeping out cheaper foreign products, and it led us into the great depression. it was an historic mistake. there was more recently the boat luxury tax. this sounds tkpwaofpltd it was part of the budget -- good. it was part of the budget deal of 1990. congress put a 10% luxury tax on boats costing more than $100,000. that sound familiar? we're going to get the rich

people. we didn't get the rich people. it got the working people. the unintended consequences was it sank the boat industry costing jobs and congress rushed back in and repealed that historic mistake. there was the medicare catastrophic coverage act of 1988, another good-sounding goal to help older people reduce the risk for illness-related catastrophic financial losses. but a lot of our senior americans resented the ideas of paying additional taxes for that coverage. they revolted, and congress less than a year and a half later repealed it. and then we all remember the millions' tax. that's a -- the millionaires tax. in the late 1960's there were americans not paying high income tax, so congress imposed something called the alternative minimum tax. and last year it affected 28 million taxpayers. so, i would say to my friend

from idaho, i think he's doing the country and the president a great service by offering this amendment to help keep the promise. because whatever the majority leader decides to do about the government option, this legislation is still, when fully implemented, $1 million in medicare cuts five years before medicare is scheduled to go broke, according to its trustees. it's nearly $1 trillion in new taxes in 10 years when fully implemented, as the senator from idaho has pointed out. there's no question about that. it's an increase in premiums for most americans, according to the congressional budget office. and yesterday on this floor we talked about the huge bill we're about to send to states to help pay for this in the medicaid programs. so it's important to support the crapo amendment. and it's important for our country not to have this

historic mistake thrust upon them. mr. ensign: well, i would like to jump in here and ask the senator from idaho a question. from what i understand -- actually, this is from yesterday, i think it would be in 17 days from now, based on the current bill before us, all of these taxes that you have in your chart there, the -- all the taxes that the president said he would not violate. i think there's -- the article yesterday said 13 taxes. we know at least nine absolute taxes that will go into effect. but the tax subsidies, these -- these payments to folks who don't have a -- a tax liability, those don't start -- aren't start received for 1,479 days. isn't that correct? mr. crapo: the senator from nevada is correct. the fact is the taxes start on

day one of the bill. the spending, which is what these alleged tax cuts are, that my colleague from the other side was talking about doesn't start until the fourth year or 2014. that's juns of the budget gimmicks in the bill in order to try to claim that it doesn't drive up the budget. 10 years of tax increases and four years of spending to offset. it they figured out how long they would have to delay it so they could claim it would not drive up the deficit. mr. ensign: i want to address one of the taxes, the so-called cadillac tax, that the democrats have put into this bill. the problem is they did not index it for inflation. so as time goes forward, what we can see here under the red -- red line here, this is the threshold -- they index it for what's called the consumer price index plus 1%. that goes up a little bit. the problem is medical inflation

is going up much faster. so what happens is this is the blue line is the average plan in the united states. that's how fast it's going up. so you can see that that's much higher and so it starts right at this point it starts catching most of the plans in the united states. so this 40% tax that the unions are running ads against right now, is going to start getting almost all americans' plans in the future. that's the reason that a lot of people don't realize this is a tax, may not get them today, but it's going to get them eventually. and what's going to happen is this tax will be passed on to them in lower benefits. mr. crapo: the senator from nevada is correct. before i toss the floor to the senator from texas, who wants to make some comments, i would just point out, the point you made is statistically made by joint tax,

by 2019, at least 73 million american households -- that's not 73 million americans, that's 73 million american households will face a tax increase. mrs. hutchison: i would ask the senator from idaho, if i could respond. when the senator from tennessee was talking about the luxury taxes and how everyone thought that felt so good to have a tax against luxury boats an who suffered? the workers. and then the catastrophic medicare coverage, which resulted in a tax on seniors who were going to have to have that coverage and seniors erupted and that was repealed. and then followed on from the senator from nevada, who talks about the cadillac plan, which is the high-end plan of coverage. and i thought, you know, maybe

congress has learned something. maybe the democrats are on to something. they've listened to the history of all of these good-sounding taxes on rich people or people who buy expensive things. and as the senator from nevada has pointed out, they've now learned that they really probably ought to go ahead and tax both ends instead of just the high end. because in this bill you have a tax on the high-end plans. you have a tax on employers that provide too much coverage. oh, but we also tax the people who don't have any coverage. so if it's too small, you get taxed and if it's too big you get taxed. so it -- it seems like maibt democrats learned the wrong lesson, and it's not that you tax just the rich or the people who buy expensive things now,

it's that you tax both ends to make sure that you get every little drop of taxpayers' dollars. well, i think we have shown on this floor from the endless hours of debate that everyone in america is going to be taxed. because the taxes that take effect in three weeks times under this bill, january of 2010, the major tax increase takes place. and that's the tax increase on prescription drugs, on insurance companies. they're going to have to raise their premiums. the drug costs are going to go up, and medical equipment, which is the essential for seniors, especially for everyone who needs some form of equipment, the equipment manufacturers are going to have the tax. so $100 billion in new taxes start next january, three weeks from now. so every person in america is

going to pay taxes in the form of higher prices starting in three weeks so then the senator from south dakota and i are sponsoring the legislation because the next question would be: oh, well, my goodness if we're going to be taxed in three weeks, surely we're going to have some sort of benefit offered in three weeks. some sort of low-cost health plan or option. three weeks, surely. oh, no. no. we're not going to have any of the plan that would offer options to people. not in 2010. not in 2011. no, not in 2012. not in 2013, but 2014. so all these higher prices are going to start kicking in in january and then we're going to have the cadillac plan that the

senator from nevada mentioned in 2013 all being paid before one supposed benefit would be available. if this is not a bait and switch, never seen one. and the senator from south dakota and i are going to offer the next amendment after the ones that are in the tranche right now to just very simply say whatever the bill is in the end there will be no taxes until there will is a plan. not one dime of taxes could take effect until there is actually some sort of plan available that would, hopefully, give some sort of benefit to people, which is what is being promised. so i would just ask the senator from south dakota if -- if that's his understanding, that we would at least draw a line

and whereas senator crapo's motion, which i support and i know everyone on the floor talking this morning supports to say that there will be no taxes to anyone who makes under $200,000. but even if there are taxes in the end, they won't take effect until there is some sort of plan available for people that is going to help americans who don't have coverage and for whom we're not able to lower the costs, which the republicans are trying to do, at least we would set that deadline. and i would just ask the senator from south dakota what he's been hearing about this bill. mr. thune: my colleague from texas is exactly right. and her amendment and the amendment that i'm cosponsoring, which we hope to vote on next, will be a follow-on amendment to the amendment that the senator from idaho is offering. but it just seems a basic

principle and matter of fairness to the american people. that if you are going to create public policy, that you do it in a way that treats people fairly and doesn't raise their taxes before a single dollar of the premium tax credits and the exchanges that are designed to create the new insurance product for people would take effect. and that's what this bill does. the senator from idaho, his amendment that recommits all of the tax increases, and i will support that wholeheartedly, because these tax increases are the absolute worst thing we can do at a time when we have an economy in recession and we're asking small businesses to lead us out of the small businesses. 70% of the jobs in this country are created by small businesses. it is much higher in my state of south dakota. these tax increases couldn't be more poorly timed in terms of getting the economy restarted and creating jobs for americans and getting them back to work. of course, since most people get their insurance at least currently through their microone

of the best things to provide insurance is to put people back to work. this bill would have the opposite effect. as it job killer because of all of the tax increases and every small business organization has said that. it's why it is so important to support the senator from idaho's amendment. senator hutchison and i will offer this amendment hopefully we'll get a vote on later that will at least delay the tax increases until such time as the benefits begin. it essentially alliance the revenue increases and the ben benefits so that they're synchornized and you don't have this period of 10 years where you're taxing people for 10 but only delivering a benefit for six. that, again, i think violates a basic principle of fairness that most americans should expect when it comes to their elected leaders making public policy which will have a pro fund impact on them and their lives. i hope to get a vote on that amendment and i hope our colleagues will support it. it is unconscionable that you would raise taxes b

by $72 billion, which is what this does, until the year 2014, before the premium subsidies and the exchanges kick in to deliver the benefits that are supposed to be delivered under this bill. the senator from texas, i look forward to getting a vote on that amendment and i hope we can win on the crapo amendment later in the day. i appreciate my other colleagues being here to point out how important it is to have public policy that is fair and also that we not do things that are counterto job creation at a time when we're asking small businesses to get out there and create jobs and to make investment. a senator: it seems -- mr. barrasso: the senator from idaho had a picture of a woman making $50,000 a year and the health benefits. my concern is not just her taxes. my concern is also her job. it's also the fact that she would still have a job. because what i hear from the people of wyoming is: don't raise my taxes. don't cut my medicare.

don't make matters worse than they are right now in this economy where we have 10% unemployment. like the senator from south dakota, i'm a member of the organization, national federation of independent business, member for years. they're telling us that as they collect the -- as these taxes are raised and collected in 2010, 2011, 2013, in 2010, going to lose 400,000 jobs in america. in 2011 another 400,000 after that, and another 400,000 as the taxes continue to be collected. they would be losing in this country 1.6 million jobs as a result of these increased taxes that all americans are going to have to pay. so i would ask the senator from idaho, isn't it even more critical that we pass your amendment in addition to the fact that we don't want these taxes, they're going to hurt our economy across the board? mr. crapo: the senator from wyoming is exactly right. the wrong thing to do when our economy needs to be strengthen

and restarted, if you will, is to apply a huge amount of new taxes. let's just take the example that we talked about earl yes. this young lady -- earlier. this young lady under the bill in the senate now, will not only see her health benefits go down, but the net value of her compensation will go down. she will get a little extra wages in order to offset the reduction of her health care benefits, but those will be taxed and her net compensation package will go down. and the point here is this, and it's a little bit ironic, that today the democrat caucus is going to be meeting with the president at the white house in, yet, one more closed-door meeting where they're going to be trying to redraft the bill in order to get around some of the problems which i hope they will let the american public see to debate before they try to vote on it again. but it's kind of ironic that as the democrats come out of that caucus, if they don't support this amendment, they will be violating two of the president's pledges. one, his pledge, after meeting with him, they'll be violating

his pledge to not tax any americans who make less tha than $200,000, individual, or $250,000 family. aas well as his pledge, if you like it, you can keep it. this young lady, if she likes her package, he didn't keep it. -- she can't keep it. she will not have that option. her health care package will be reduced down to the minimum designed acceptable policy and probably a little more than that. she'll see about a 20% or 30% reduction in her health care package against her will. and i would be willing to bet you that she'd prefer to keep the one she's got now. most americans do like the insurance they're getting through their employers. mr. ensign: i would like to ask the senator from idaho a question. these are, first of all, the nine taxes we know for sure that are raised. the 40% cadillac plan tax, the separate tax on insurances. we have the employer tax, the drug tax, the lab tax, the medical device tax, the failure

to buy insurance tax, the cosmetic surgery tax and the increased employee medicare tax. in our states, people think, you know, we'll pass a sales tax and the business will just pay the sales tax. i'd like to ask the senator: who actually pays the sales tax? and who is congressional budget office and the joint committee on taxation, which are both nonpartisan, who have they said are going to pay these taxes? mr. crapo: the senator who serves on the finance committee was there when the joint tax and spwoeplt experts -- and c.b.o. experts were asked these questions. they directly said these fees will be passed on virtually to the consumer which means two things. first of all, the ones that are taxes will be taxed passed on to the consumer as shown in the example of the young lady that we looked at here. those ones that are fees will simply be passed on in the form of higher costs for medical services or higher premiums, which is one of the reasons why

contrary to the assertions by the other side, this bill will drive up the cost of health care and will drive up the cost of premiums, not down. mr. ensign: the last thing i'd like to point out goes along with your chart over there. this is what the joint committee on taxation has said. 84% of all of the taxes being paid in this bill are being paid by those making less than $200,000 a year. if this isn't a direct violation of the president's promise not to raise one dime of their taxes, i don't know what is. i don't understand how the president can sign this bill and keep to the promise that he made during the campaign. mr. crapo: i agree with the senator from nevada, and it's disturbing, frankly, to see the responses. first, the response that this bill actually doesn't increase taxes. it cuts taxes. well, that flies right in the face of the very reports and analysis by joint tax and c.b.o.

i, again, encourage everybody in america to read this bill. it's available on my web site, on the republican web site, on the c-span web site and a number of others. in fact, we're going to put up a reference to where you can find the bill to read it if you want to try to parse through who's really telling the truth here. but the bottom line is this bill increases taxes by in the first ten years $493 billion. when you add fees to that, it's more like $700 billion. if you count the first ten years of implementation it's over $1 trillion of new taxes. for those who are not able to purchase health insurance, tax cuts, even though three-fourths of them go to them who are not at this point at a level where they are incurring a tax liability. mr. thune: my understanding is too, maybe you can correct this, those premium tax credits actually go to the taxpayer?

when they talk about this is a tax cut for people, does it end up in the pocket of the average taxpayer in this country? mr. crapo: the senator from south dakota is correct. this subsidy is not paid to the individual. it's paid directly to the insurance company. of the one-quarter of people receiving this subsidy who do actually pay income taxes, their income taxes will in fact stay the same. they are not actually getting a tax cut. what they are getting is a subsidy for the purchase of insurance that is managed through the tax code but is paid directly to the insurance company. mr. thune: that's precisely why the argument that is made by the other side, somehow this is a tax cut, sort of defies what i think most americans have come to expect when they get a tax cut, and that is that they get to keep more of what they earn. that's more money in their pocket when what we're talking about here really is a payment that will be made to an

insurance company, tax credit for premium subsidies that will go to an insurance company. and there will be very few americans as a percentage of the total population who will actually derive any sort of benefit from that. my understanding is about 10%, is that correct, of all americans will get some benefit from the premium subsidies that will go to the insurance company, not directly to the taxpayer? mr. crapo: it's actually 7%. mr. thune: so you've got a very small number of americans who are going to derive a benefit from this, but you've got a whole lot of americans who are going to be paying the freight for this. you mentioned earlier -- i saw your chart up there -- # 3 americans are going to end -- 73 million americans are going toned up with higher taxes as a result of this and many premium tax credits, if you could give credit to the taxpayers receiving this, but you can't because it goes to the insurance company, if you could, three-quarters of that will go to people who currently have no tax liability.

it seems like the advertising on this is very inconsistent with the reality and the facts. facts are that most americans are going to see taxes go up, going to see premiums go up. very few number of americans are going to get some premium tax credit to pay to help subsidize their premium cost. that's going to go directly to the insurance company. i understand, the senator from idaho and the senator from nevada are both members of the finance committee, so you've been involved in this from the very beginning. but that's my understanding of this which is hard to fathom how that substitutes what most americans have come to believe is a tax cut. the presiding officer: the senator from idaho has consumed 35 minutes. mr. crapo: thank you. mr. alexander: i agree with the senator from south dakota. this is people who might be watching this must be thinking, wait a minute here, and let me just ask the two members of the finance committee, i mean, isn't it true -- what they're trying to say is that a medicare cut is

not a medicare cut and that a tax increase is not a tax increase and that a premium increase is not a premium increase. i mean, isn't it true that when the bill is fully implemented there will be nearly $1 trillion in medicare cuts? and isn't it true that there will be nearly about $1 trillion when fully implemented in new taxes? isn't it true that the congressional budget office has said that's all going to be passed on to people? and isn't it true that that all starts in january if the bill passes? and isn't it also true the congressional budget office has said that premiums are going to continue to go up, and for people, the individual market they're going to go up even more? isn't that all true? mr. crapo: i'll respond first. the senator from tennessee is exactly right. in this chart, these are the tax increases for the first ten years of the bill. this chart includes the fees and penalties that are charged as well. the total there is $704 billion. if you actually start when the bill totally becomes implemented or starting to be implemented in

2014 to compare taxes to spending, the actual taxes and fees that are going to be collected are $1.3 trillion almost. mr. ensign: there's no question i could answer your question by true, true, true, true, true, true. you know, the old saying if it walks like a duck and it kwaubgs like a duck, it's a duck. these taxes, staoeuplgs -- sometimes they're called fees. the supreme court has actually ruled that a fee that acts like a tax is in fact a tax. that's exactly what most of these provisions that we've talked about before, we call them a tax because that's exactly what they are. these nine new taxes are really a tax. and you're exactly right, the joint committee on taxation and congressional budget office have said these are going to be passed on to the consumer. and what they have also said -- and i thought this was very significant -- 84% of all of

these taxes are going to be passed on to people who make less than $200,000 a year. and that's, i think, what we've all been saying is the other side said, no, we're going to tax the rich for this. when 84% of that tax burden is paid by people making less than $200,000 and the vast majority is also paid by people making less than $100,000, the vast majority is being paid by people less than $100,000 a year. the same with sales tax. sales taxes, it's been called a regressive tax. these are regressive taxes that the democrats are passing on to the american people. mr. crapo: mr. president, to conclude, i'd like to thank my colleagues for coming over and speaking today and discussing this issue with me. i'd like to conclude by pointing out once again the president said he can make a firm pledge, no family making less than $250,000 will see their taxes increase. not your income taxes, not your

payroll taxes, not your capital gains taxes, not any of your taxes. you will not see any of your taxes increase one single dime. but there are hundreds of billions of tax increases in this bill that are going to fall squarely on the backs of the middle class. our motion simply says let's fix that and take it oufplt the bottom line is those who are saying that is not the case in the first place are saying there are subsidies in the bill that almost equals the amount of these taxes and, therefore, it is really a net tax cut. first of all, subsidies are not tax cuts. three-quarters of them go to individuals who have no tax liability. and the other one-quarter does not reduce the tax liability on the individuals who are getting the insurance subsidy. even if you accept all of that kind of argument, the president was not saying you will not see net taxes go up in america. the president was not saying we will not cut, or not increase your taxes by more than we will cut someone else's taxes. i don't think anybody expected

that was what he was saying. the president was saying that he would not raise taxes in this bill. and this bill violates that pledge. therefore, we should support the motion to send this bill back to the finance committee to fix that glaring problem. with that, mr. president, i reserve the balance of my time. the presiding officer: the senator from wyoming. mr. enzi: i'd suggest the absence of a quorum and ask

unanimous consent the time be divided equally. the presiding officer: without objection. the clerk will call the roll. quorum call:

mr. durbin: mr. president? the presiding officer: the senator from illinois. mr. durbin: i ask consent the quorum call be suspended. the presiding officer: without objection. mr. durbin: i ask to speak on the time allotted to the chairman of the finance committee relative to his amendment. the presiding officer: the senator is recognized. mr. durbin: there's been a lot of talk on the floor about taxes and health care. what we're discussing is this bill. it's a large bill, over 2,000 pages, but we needed all of these pages because we're tackling one of the biggest problems facing america. how could we take a health care system that consumes one out of every six or seven dollars in our economy and change it for the better, keeping what's good in it but changing those things that aren't so good. one of the things that concerns most of us is the cost of health insurance premiums. ten years ago an average family of four paid $6,000 a year for health insurance. now that's up to $12,000. and if we're not careful, in eight years it's projected to double again. $24,000 a year for health care

premiums. think about that. trying to earn $2,000 a month in eight years just to pay for your health insurance. nothing else. well, that's beyond the reach of individuals and beyond the reach of a lot of businesses. and so even today businesses are dropping people from coverage. we now have some 50 million americans without health insurance. more and more businesses are just putting their hands up and saying, "we can't go own further in paying higher premiums." individuals who go out on the open market know what they run into. you know you're going to run into the highest possible premiums and you're going to run into rank discrimination. try to buy a health insurance policy if you have any history of illness. they'll tell you right off the bat, we're not covering that. oh, no, cancer in your background? we're not going to cover it. that's what people face. this current system is unsustainable. so we tackled it, and we said that we're going to put the time in to change it for the better. this is our bill. i would like to hold up in the other hand here the republican plan for health care reform, but

it doesn't exist. they don't have a plan. they have speeches. they have press releases. they have charts. but they don't have a plan. i'm talking about a plan that really has gone through the rigor of being carefully reviewed by the congressional budget office, a plan that is comprehensive, something that really addresses all of the problems in this system in a responsible way. they have bills. they have ideas. i don't want to say anything about them, though i may disagree with them, but they don't even come close to being a comprehensive plan. so many critics on the other side give speeches about what's wrong with the democratic health care plan because they don't have one. if they did, we would have heard about it. you would have thought it would be the first amendment offered by the republican side if they truly had such a plan. but, of course, they don't. what does this plan do? well, first, it makes health insurance more affordable. we have the congressional budget office saying that the projected

increase in health insurance premiums is going to flatten. it's going to come down a little. it doesn't mean automatically people will see premiums go down next year, but they won't go up as fast and we won't see them going up as much as has been predicted. secondly, this is a plan that will mean that 31 million americans who currently have no health insurance, will have health insurance. that's pretty important. and all the criticism i've heard from the other side of the aisle, there is not a single proposal from the republican side that would expand in any significant way the amount of coverage for americans when it comes to health insurance. 31 million americans who will at least have the peace of mind of knowing when they go to bed in the evening that if tomorrow there's a bad diagnosis or terrible accident, that they'll be covered. they'll have peace of mind that they can go to the best doctors and hospitals in america. that's significant. there's another element too. we know that right now the health insurance companies really have the upper hand when it comes to negotiating for

coverage. you know what i'm talking about. when your doctor says: i think you need the following procedure, but i have to check with your insurance company. think about that. we may be the only nation on earth where a clerk working for an insurance company has the last word about life or death medical care. and that's what is going on today. this bill makes significant changes when it comes to health insurance. protects individuals from being discriminated against because of preexisting conditions. make sure that the companies can't run away from coverage when you need them the most. extends the coverage and protection for children and families. these are important things that are going to mean a lot to people across america. now comes the republican side of the aisle and says, oh, they didn't tell you the real story. it's all about your taxes going up. i'm afraid that's not quite right. the criticism i've heard on the floor about this bill ignores the obvious. this bill provides the most significant tax cuts in the

history of this country. $440 billion in cuts over the next 10 years. what kind of tax cuts? if you're making less tha than $80,000 a year, this bill says we'll be there to help you pay the premiums. that doesn't exist today. if you don't have coverage under medicaid and you're buying health insurance and your income is below $80,000 a year, we're providing tax cuts to millions of americans so that they can afford their health insurance. the biggest tax cut, i think in the last 20 years or more. in addition, there are tax breaks for smaller businesses. if you have 25 or fewer employees, we will help you and your business provide health insurance for your employees. that, to me, is significant. in fact, the joint committee on taxation, takes a look at the new taxes charged and the tax cuts that are in the bill, and they that americans will pay 1.3% less in taxes in 2017 as a result of the bill. so the tax burden on americans starts to come down while insurance coverage goes up.

don't forget the hidden tax we pay today. when people show up at the hospital without health insurance, they get care. they may have a doctor. they may have the x-rays and all the procedures and all the medicine. but if they can't pay, the hospital charges the other patients. we all pay. about $1,000 a year is paid by families now for those who have no health insurance. as more and more americans are covered, that burden stops shifting over to those who have insurance, and that is a good thing. that hidden tax is largely ignored by the other side of the aisle. but we know it's a reality. we also think these tax credits will make insurance more affordable. the joint committee on taxation says by 2017 these tax credits in the bill will reduce taxes by $40 billion a year for millions of americans. we also hear a lot said about the excise tax on insurance policies at the higher levels. that's a tax not on individuals,

but on the insurance companies as a disincentive to keep running up the cost of premiums and, instead, try to bring efficiency and cost effectiveness in quality care. health reform is good for the economy. a lot of businesses who try to afford health insurance lose their competitive edge as the costs go up. as we bring costs down, it means more competition, more job creation and a growing economy. i can understand why the other side of the aisle has spent most of their time finding fault with this bill. that's part of their responsibility in the senate. i would hope at end of the day they would offer their substitute, their idea on how we can truly achieve health care reform. the fact that they have not reflects two things, it's a very tough job to do. this is a big bill that took a lot of work. perhaps they couldn't come up with a bill themselves. or as an alternative, they may like the current system. they may like the health

insurance companies and the way they treat americans. they may think it is okay for the premiums to continue to skyrocket beyond their reach. most americans disagree and i do too. i yield the floor. a senator: mr. president? the presiding officer: the senator from delaware. mr. kaufman: mr. president, i ask unanimous consent to speak under the control of the -- a senator: let me followup on some of the comments of our colleague from illinois. i'm always struck when back home i addressed the homebuilders in our state. mr. carper: i'm always amazed at the extent of the misinformation, confusion and we talked about to people about what's in the underlying legislation before us as our deputy leader has done here again today. there's a lot to like about the legislation. a lot to like about the legislation. one of the pieces that hasn't been focused on a whole lot, but

i want to mention deals with how do we better ensure that people who are sick get well and people who are not sick don't become sick? and as it applies to the use of pharmaceutical medicines? our legislation calls for doing a number of things. one, if people could actually be healthier or stay healthy by or get well by taking certain pharmaceuticals, we'd all save money in the end. but as the -- under the current system, unfortunately, too many people in this country who would be helped by pharmaceuticals don't actually get to see a primary care doctor. we don't do a very good job on primary care in this country. and one of the things that will flow from our legislation is better access to primary care for everybody. one example, currently if you're medicare eligible, you've got one lifetime physical from medicare. that's it when you sign up for medicare. you don't get a physical every

five years or every 10 years or 20 years, you get one physical in your life that's paid for by medicare. that's going to change with the legislation that we'll be voting on in the days ahead, we'll provide annual physicals as a benefit under medicare. the -- from more regular doctor visits from the primary care doctor, is understanding what the health condition of people in this country and the notion that some of us might actually be healthier for you to take -- if you have a high-blood pressure rate, there is medicine to take for that. if you have a problem for cholesterol, there is a medicine that you can take for that. the idea is to identify problems that can be treated with -- with medicine. not everyone can, but some can. so the first key is let's make sure that folks who benefit from having access to a primary care doctor have that access. second, if there are medicines

that a person can take that will help them, let's hope that the primary care doctor will do their job and maybe specialist, if needed, to identify the medicine that's are needed. the third point is to make sure that when those medicines are identified, that they are actually prescribed and made available to the person. and we have as we -- we all know that the medicare prescription drug program, part-d program, a pretty good program, 85% of the people who use it actually like it. the program's been under budget for each of the four years it's been in existence. that's pretty good. but when a -- a person is a senior citizens who participates in the medicare drug problem, when it exceeds $2,200 a year, instead of medicare paying for 75% of the medicine, the individual paying 25%, which is the case from zero to $2,200 for cost, medicare says, we're out of. this from $2,200 to $5,200 it's

up to the individual unless you happen to be low income pamplet of the challenge is, one, folks who have access to primariy care get that, if medicines are available, it can be determined by the doctors or doctor. three, how do you make sure that people get the medicines that are prescribed. they kay ford them and they can actually take them. number four, to make sure that once we have the access to primary care, actually made a determination on what medicines can be helpful to a person, three, that those medicines are prescribed, four, that the person for whom they're prescribed can afford and buy them. and part of that is -- is making sure that as we're trying to do in our legislation to -- to take that whole, if you will, that exists from roughly $2,200 t to $5,200 and fill it in so that medicare covers more and more of the costs. there is an agreement from the pharmaceutical industry to cover

a portion of that hole, really, to take care of about half of it. we understand from our leadership in the house and the senate and the president that there is a firm commitment to close it entirely so that that -- that range from $2,200 t to $5,200 per year would actually be treated just as the first say $2,200 covered is. medicare would cover the firs first $2,200 and would be responsible for covering the other 25%. that will help a lot of people. that will make sure that folks who were doing okay taking their medicines until they hit th the $2,200, they will continue to take their medicine and be able to stay out of emergency rooms and hospitals an be healthier as a result. the last piece involves something new. it's called personalized medicine. i never really heard the term before. although i've been interested in the issue for a while. as it turns out, there are some medicines for certain conditions that will help one group of

people because of the way that god made them, because of their genetic makeup. there is another group of people with a different genetic makeup will not be helped by the same medicine because of their gentlemen them inic condition -- genetic condition. and this is will determine who will be he helped from a certain condition and who will not be because of their genetic makeup. the idea of making medicines available so people will be helped, we want to do that. having the knowledge to say, this group will be helped, but this group will not, and spend the money where it will make a difference and stop spending the money where it will not make a difference, we're close to being able to do that and we need to do that as well. all of this flows from the legislation. when you put together, it is an attractive and smart policy. we talk a whole lot about how to provide better health care, better outcomes for less money there is better potentials for

doing it than in just the ways that i described. i will stay on the issue of pharmaceuticals, if i can. i want to take a somewhat different tact, now, mr. president. but i -- i wrote a letter to -- to the administration a week or so ago, maybe two weeks ago. and i ask the administration for some -- some clarification on the issue of reimportation. that's an issue before us today. we've been debating it for some time. we'll be voting later today on a proposal from the senator from north dakota, senator dorgan. and we'll be voting on an alternative to that offered by the senator from new jersey, senator lawsuitburg, which i -- lautenberg, which i support. if that amendment were actually incorporated into the dorgan amendment, i would support the underlying dorgan amendment. anyway, i wrote to the administration, and i got a letter back dated december 8, i don't think i stood on the floor and read a letter. this is one that i'm going to read. i want my colleagues and the

staff and anyone else tuned in to hear what i'm about to say and what the administration has to say on this subject of reimportation. it's a little bit awkward -- that's to be awkward for the administration. as a senator -- senator obama, when he was here, he was a cosponsor of the dorgan amendment. when he campaigned for president, on the campaign trail, he spoke favorably of the legislation offered on reimportation by senator dorgan. now he's president and he leads an administration that when -- when asked what is the position of your administration on that legislation that you cosponsored as a senator and spoke in favor of as a ca candidate, now that you're running the country and you're the chief executive of the country and you have a whole department whose job it is, the department of health and human services, the job is to look out for our safety an health, how do you feel about it? so i wrote a letter asking the question.

here's what i -- what i received in -- in response. a december 8. "dear senator carper: thank you for your letter." this is from the head of the f.d.a., food and drug administration. "dear senator carper: thank you for your letter requesting our views on the amendment filed by senator dorgan to allow for the importation of prescription drugs. the administration supports a program to allow americans to buy safe and effective drugs from other countries and included $5 million in its 2010 budget request for the food and drug administration to begin working with various stakeholders to develop policy options related to drug importation." the letter goes on to say "importing non-f.d.a. approved drugs presents four potential risks to patients that we

believe must be addressed. number one, the drug may not be safe and effective because it was not subject to a rigorous regulatory review prior to approval. number two, the drug may not be consistently made, high-quality product because it was not manufactured in a facility that complies with appropriate good manufacturing practices. number three, the drug may not be substitutable with the f.d.a.-approved product because of differences in composition or manufacturing. and, number four, the drug may not be what it purports to be because it has been contaminated or is counterfeit due to inadequate safeguards in the supply chain. in establishing an infrastructure for the importation of prescription drugs there are two critical challenges in addressing these risks. first, the f.d.a. does not have clear authority over foreign supply chains.

one reason the u.s. drug supply is one of the safest in the world is because it is a closed system under which all participants are subject to f.d.a. oversight and to strong penalties for failure to comply with u.s. law. second, f.d.a. review of both the drugs and the facilities would be very costly. the f.d.a. would have to review data to determine whether or not the non-f.d.a. approved drug is safe, effective and substitutable with the f.d.a.-approved version. in addition, the f.d.a. would need to review the drug facilities to determine whether or not they manufacture high-quality products consistently. the dorgan amendment seeks to address these risks. it would establish an infrastructure governing the importation of qualifying drugs that are different from u.s. label drugs by registered importers and by individuals for

their personal use. the amendment also sets out registration conditions for importers and exporters as well as inspection requirements and other regulatory compliance activities among other provisions. we commend -- we being the f.d.a. -- we, on behalf of the administration, we commend the sponsors for their efforts to include numerous protective measures in the bill that address the inherent risks of importing foreign products and other safety concerns relating to the distribution system for drugs within the u.s. however, as currently written, the resulting structure would be logistically challenging to implement and resource-intensive. in addition, there are significant safety concerns related to allowing the importation of nonbioequivalent products and safety issues related to confusion and distribution in labeling of foreign products in the domestic

product that remain to be fully addressed in the amendment." the letter concludes by saying, "we appreciate your leadership on this important issue and we look forward to working with you as we continue to explore policy options to develop an avenue for the importation of safe and effective prescription drugs from other countries." signed sincerely margaret hamburg. she is the commissioner of the food and drug administration. i suspect this was not an easy letter for ms. hamburg to write or an easy letter for the administration to sign off on, given the position of the president in the past on this issue and now being confronted with the actual possibility that this legislation would become law. it's got to be a struggle. i want to commend senator dorgan and others who worked with him -- i think senator snowe and

others who have worked with him over the years to try to address the earlier criticism for this legislation. what the f.d.a. says really to me and really to us is that progress has been made. some of the concerns have been addressed. unfortunately, some have not been. and what i would hope that we do when we vote later today is accept the offer of the administration. they have been willing to put their money where their mouth is, to actually put money in their budget request, saying before we go down this road as proposed in the dorgan administration, let's see if we can't work this out in a way that actually addresses some of the remaining safety and soundness and health concerns. i'm not sure if i were the author of the amendment if i would have accepted that offer from maybe an earlier administration whose motives were not maybe as pure. and frankly, whose chief executive was not committed to addressing this issue. our president is committed to addressing this issue. the department of health and

human services and the f.d.a. is committed to addressing this issue. they are anxious, i believe, to work it out. and not only that, they're anxious and willing to fund, provide some of the funding that's needed to come to an acceptable resolution and compromise. i hope by our votes later today we will accept that offer from the administration. and i hope in the weeks and months ahead, we'll actually take the steps not necessarily proposed exactly by senator dorgan, but take the steps that will allow us to move in that direction but do so in a way that does not unduly harm or put at risk the people or the citizens of this country. with that, mr. president, i yield the floor. thank you very much. a senator: mr. president? the presiding officer: the senator from new hampshire. mr. gregg: i understand that i will be yielded time off the leader's time. the presiding officer: without objection. mr. gregg: mr. president, i wanted to speak a little bit today about this issue of the tax burden that the reid bill is putting on people with incomes

under $250,000, $200,000. we all know the president said that he was not going to hall hrou taxes to increase -- going to allow taxes to increase for people who had income under those numbers. we know there are all sorts of proposals in the reid bill which significantly increase taxes. we also know there are a lot of proposals in the reid bill that significantly increase fees. and we also know that there are a lot of proposals in the reid bill which significantly, well significantly increase premiums, which, all of which people under $200,000 pay. and why is this? well, primarily it's because if you look at the reid bill, it exponentially increases spending and grows the size of government. government is increased by $2.5 trillion under the reid bill when it's fully phased in. $2.5 trillion.

it goes from 20% of our gross national product -- that's what government takes out today in spending -- up to about $24% of our gross national product. huge increase in the size of government. when spending increases like this, at this type of explosive rate, there are a couple of things that occur. and one of them that occurs is that taxes also go up. it's just, it's like day following night. if you're going to increase the size of the government at this rate, you're going to have to significantly increase taxes whether you call them fees or whether you call them premium increases or whether you call them outright taxes. and that's what's happening here. because the goal is to grow the government dramatically. that's the goal. and when you growth government, you inevitably increase the taxes. and in fact, in this bill, it is estimated when it's fully put

into phraeurbgs that there will be about $1.6 trillion or $1.7 trillion of new taxes. there is also when it's fully phased in about $1 trillion in reduction in medicare spending. we've had a lost discussion about that here on the floor. i've been here a number of times talking about that. but the burden of taxation goes up in order to allegedly pay for these new entitlements. now, why do the taxes have to go up? when you increase spending this way, you've got to pay for it. or you should pay for it. and so, this bill attempts to do that by raising taxes dramatically. but the presentation that you can get all this tax revenue out of people making more than $200,000 a year simply doesn't fly. it doesn't pass the common sense

test. we heard for a week from the other side of the aisle that no medicare benefit cuts would occur with $1 trillion of medicare cuts. well of course that's not true. when you -- we just heard yesterday from the actuary -- the president's actuary, by the way, the actuary of c.m.s., that when you make these significant reductions in provider payments under medicare, which is where much of the savings occurs, that means there are fewer providers who are going to be able to be profitable. in fact, 20% of the providers were beyond profitable under this reid bill as scored by the actuary for c.m.s. and as a result, providers will drop out of the system. and clearly that will affect benefits to seniors because they won't be able to see providers because they won't exist anymore. it's like telling somebody, someone said -- the senator from nebraska, i think, said you can have keys to the car, but there

is no car. in this instance there would be no providers or fewer providers. well, along with that problem, there's this claim -- along with that claim that was totally inaccurate which is that medicare benefits would not be cut, there is this claim these new revenues to pay for this massive expansion in spending are going to come from just the wealth kwraoefplt again we have -- wealthy. again we have independent sources taking a look at this, in this case the joint tax committee, and they've concluded that is not the case. the argument from the other side of the aisle is that we've got all these tax credits in here which when you balance them out against the tax increases, people under $200,000 because some will get tax credits, some will get tax increases, but they balance out so that there's virtual evenness, so that the tax credits in the bill to

subsidize people who don't have insurance today mostly are balanced by the tax increases on people under $200,000. because if you're one of those people under $200,000 that doesn't get the tax credit, that doesn't mean a whole lot. your taxes are going up. more importantly, joint tax has taken a look at this and by our estimate what joint taxes has said is essentially this: 73 million families, or about 43% of all returns under the number of $200,000 -- people with incomes under $200,000 -- will in 2019 have their taxes go up. so there is a tax increase in this bill, and it's very significant on people under $200,000. in fact, if you compare that to those people who will benefit from the tax credit, what it amounts to is that for every one person who is going to benefit

from the tax credit, three people under the income of $200,000 will see their taxes go up. and that's a real problem. first because it significantly violates the pledge of the president when he said "i can make a firm pledge no family making less than $250,000 will see their taxes increase. not your income taxes, not your payroll taxes, not your capital gain taxes. not any of your taxes." that's what the president said. well, that pledge is violated by the reid bill, violated very fundamentally for the 73 million people whose incomes are under $200,000 and whose taxes go up. and so, it clearly isn't a tax-neutral event for middle-income paoefplt it is a tax -- for middle-income people.

it is a tax increase event for a large number of middle-income people. 43% of all people paying taxes whose income is under $200,000 will have their taxes increased. and what's the thought process behind this? well, the thought process essentially seems to be that we're going to explode the size of government. we're going to dramatically increase the taxes on the american people. shaoupbd that's going to -- and somehow that's going to make life better for americans. i don't see that happening. i don't see that happening. i mean, we know from our experience as a government that growing the government in this exponential way probably is going to lead to people having a tougher time making ends meet because their tax burden's going to go up. discretionary dollars that they might have used to send their kids to college.

or they might have used to buy a new house or they might have used to buy a new car, or they might have just simply saved, those discretionary dollars, they don't have them anymore because they come to the government to fund this massive explosion in program and this increase in the size of government. i don't think we need to looking to too far to see how this model doesn't work. all we have to do is look at our european neighbors. this idea that you can europeanize the economy. that, somehow, if you grow the government, you can create prosperity. that's what's basically behind the government. we know that doesn't work. all we have to do is look at our neighbors in europe who have used that model to find out an conclude that that doesn't work. it would make much more sense to put in place an affordable plan, one which didn't raise the taxes

of 73% of the people who file income -- or 73 million people who file income taxes under the income of $200,000, 43% of the people paying taxes there. itou grow the government in this extraorow wry can't afforde know we end up passing on our to kids, a country which is -- has less of a standard of living than they receive from their parents. so i hope we take another look at all the taxes in this bill. recognize that the commitment that the president made on the issue of taxes is not being fulfilled by this bill and go back to the drawing board and reorganize it. so that we come closer to what the president wanted, which was a bill that didn't raise taxes, which was a bill that did insure everyone, which was a bill that did create an atmosphere where if you wanted to keep your present insurance, you could keep it and which is a bill that

turns the cost curve of health care down. none of those four goals are now met. according to the actuary and to joint tax, all of those four goals, just the opposite occurs. the number of people insured remains at 24 million people, the costs go up by $235 billion. tadgess -- taxes go up for 73 million people and we end up with 17 million people who have insurance today in the private sector losing that insurance. so i believe we should take another -- another look at this bill and try to do a better job. at this point i yield the floor. a senator: mr. president? the presiding officer: the senator from alabama. a senator: mr. president, i rise today in disbelief -- mr. shelby: mr. president -- a senator: i'd yield up to 20 minutes to the senator from alabama for leader time. the presiding officer: the senator from alabama.

mr. shelby: i rise today in disbelief. the american public is searching for answers from its leaders on health care and yet they're poised to receive an expensive and holy inaccurate so-called solution. after weeks behind closed doors, including now, majority has produced a bill thus far that raises taxes, makes drastic cuts in medicare and increases premiums to create a new government program that so-called -- the so-called public option. mr. president, i believe that the public option is nothing more than socialized medicine and expanded government disguises greater choice and thus i'm adamantly opposed to this bill as it's written. mr. president, any legislation seeking to effectively address health care reform should have, i believe, as its dual aims, cutting costs and increasing access to quality care.

but amazingly, mr. president, this bill just does the opposite on both counts. this proposed legislation is not going to solve our nation's health care problems and, yet, likely will exacerbate them. the administration, it seems to me, seems to be determined to force the health care bill on the american people, which the majority of citizens do not want or need. mr. president, i believe that we have the best health care system in the world in the united states of america. and while many have scoffed at such a suggestion, the united states, as we know, has the finest doctors, first-rate treatments, cutting-edge innovation and low wait times. think about it. people come from all over the world to take advantage of our revolutionary medicine and state of the art treatments. the united states develops new drugs and medical devices years

before the rest of the world and american doctors are usually, mr. president, pioneers of new tech nears in surgery -- techniques in surgery and anesthesia. as a cancer survivor myself, i'm especially proud of the great strides that the u.s. has made in screening and treating cancer. the u.s. has one of the highest survival rates for cancer in the world and dwarf survival statistics in europe. the u.s. cancer survival was 66.3% while europe was -- i believe the answer is where to receive treatment in the world is clear, the united states of america. however, our current system, i would admit, is not perfect. and i have never said that it was. but i -- i believe we must seek to build upon rather than tear down these strengths that we have. we need a bill, mr. president,

that reduces costs and improves quality and level of care for the american people. here i believe we get the exact opposite, a bill that grows big government by creating a costly new entitlement program, drives up private health care costs, and subsequently, mr. president, lowers overall quality and access to care. according to the congressional budget office's long-term budget outlook, the coming tsunmai of social security, medicare and medicaid costs are projected to push the federal public debt to 320% of g.d.p. by 2050 and over 750%, mr. president, by 2083. does anyone truly believe that this new legislation will not further add to our nation's debt?

when has history proven that our government can regulate more effectively than the private industry or the marketplace? much less doing so without adding to the deficit. the reason, mr. president, we simply overspend and overpromise. the congressional budget office estimates, mr. president, that the senate democrats' health care proposal has now -- as now written will cost $849 billion over 10 years. and, mr. president, while americans will hit -- will be hit immediately with new taxes and government mandates, the actual services and coverage promised here in this legislation will not be implemented until 2014. a clear attempt, mr. president, to mask the true costs of reform. the proposal before us delays a government subsidies for yet an additional year. to hide the real cost, mr. president, of the bill and show

so-called additional savings. mr. president, stalling implementation on a program set to run for an indefinite time horizon and calling it savings is nothing more than a fiscal slap on the hand. therefore, mr. president, the senate budget committee estimates that the true 10-year cost of the proposal to b be $2.5 trillion once fully implemented. $2.5 trillion once fully implemented. let me say that again, mr. president. $2.5 trillion. a lot of money. and to pay for thi this $2.5 trillion worth of legislation, the government, i believe, will have no choice but to raise taxes to european welfare state levels, or, mr. president, impose drastic restriction on patient care or, most likely, both. the bill, mr. president,

includes over $49 $493 billion n tax increases as written placing the burden of reform squarely on the shoulder of the middle class, small businesses and the elderly. for the middle class, the proposals the direct hit, the joint committee on taxation estimates that by 2019, 23% of the so-called wealthy taxpayers paying excise tax on premiums will earn less than $200,000 a year. mr. president, i think now is the time to stop heaping debt obligations on the backs of the abled bodied. the proposed tax on the so-called cadillac plans, plans with high annual premiums, will not only be passed on to the consumer through higher premiums, but, mr. president, will creep its way into the lives of many middle-class

americans. i have a little story. miss melanie howard of pellham, alabama, raised this point when discussing the idea of -- when asked of receiving cadillac health care. she spoke to me of the small nonprofit which had to raise premium prices, mr. president, to offset a few workers who were battling cancer. in effect, she was paying for a cadillac, but still just getting a basic car. because of the taxes based on cost of coverage and not quality and breadth of coverage, many americans could fall into this category. i believe it's simple -- it's a simple actuarial fact, mr. president, that smaller risk pools result in higher premiums. thus small businesses, such as mr. howard's employer, are, naturally, going to bear the brunt of this new conceived cadillac health insurance tax.

mr. president, as taxes increase to pay for the public option, so does the cost of premiums on health care plans. the congressional budget office analysis on premium impacts estimates that family premiums, mr. president, would increase 28% from $11,000 per family to over $14,000 per family by 2019. this is more than a $3,000 increase per family. the bill also imposes $28 billion in new taxes on employers who do not provide government-approved health plans and it charges a penalty of $750 per uninsured individual. a form of double action taition here. -- tax air here. furthermore, any opportunity to have individuals self-manage their plan for health care costs has been eradicated from the proposal as now written.

flexible spending accounts helps individuals and families to pay for out-of-pocket medical expenses. they're -- that are not covered by their health insurance plans with free tax dollars much these are particularly important -- dollars. these are particularly important for individuals and families who have high medical expenses such as seniors and those with chronic health conditions or disabilities. mr. president, the current proposal before us will not only limit allowable, flexible spending account contributions, but the limit is not indexed for inflation, which means that inflation adjusted at a real value of a flexible spending account will decline steadily over time until virtually worthless. mr. president, what is also truly concerning here about the current legislation is a massive reduction in care our seniors will face under this legislation. the proposal includes $120 billion in cuts to medicare advantage.

nearly $135 billion in medicare cuts for hospitals that care for seniors. more than $42 billion for cuts in home health agencies and nearly $8 billion in cuts from hospices, of all places. this nearly half a trillion dollars in medicare deductions i think must result, has to result in the vast reduction of quality of care 4 our seniors. mr. president, i do not believe massive tax increases, a rise in the cost of premiums, cuts to seniors's health care is what the american people have in mind as a way to improve access and create affordable, quality health care. mr. president, we've already seen how this legislation will significantly increase costs and reduce coverage of care. but let's -- for a minute, let's turn our attention to quality of care. because there is, indeed, a big

difference between government-run health care coverage an actual access to medical care. as margaret thatcher once said, the problem with socialism is that eventually you run out of other people's money to spend. medical rationing is inevitable under the government-run health care. it has to be. supporters of government-run medicine often cite canada or great britain as models for the u.s. to follow. yet, medical rationing, such as is common in those countries, is inevitable under a government-run health care system as now proposed. these countries are forced to ration care or, in the alternative, have long waiting lists for medical treatments that lead to the same result. mormore than 750,000 britains ae awaiting admission to the health care hospitals. and 18,000 brits