vigilance as the marketplace changes and new products and sometimes new hazards are created. small powerful magnets continue to be a concern as they can cause serious injuries if more than one is swallowed. the aap's committee on injuries also is learning of increasing numbers of reported injuries caused by children's ingestion of so-called button batteries. the aap is interested in working with the cpsc and industry to require secured closures of devices that require button batteries as well as appropriate packaging. in conclusion, the aap appreciates the opportunity to offer testimony today. we commend you, chairman pryor and the subcommittee for your leadership on consumer product safety issues and we look forward to working with you to ensure the health and safety for all children and then i'll be pleased to answer any questions you may have. thank you. >> good morning. thank you, chairman pryor for having me before this committee today. it's an honor. my name is jill and i own a small handcrafted children's

accessory business located in stanford, connecticut. i applauded your efforts. in december 2008 i began to read the fine print. i was acutely aware that this law meant to regulate law multibillion dollar laws that betrayed the country's trust could effectively put me out of business. not because my products are unsafe but because i simply couldn't afford the third-party testing and labeling requirements which disproportionately affect small manufacturers and retailers. i quickly joined a rising grassroots effort -- an organization that owes its very existence of today. the ata now represents 592

member businesses and and product manufacturers from across the country. i'm here today with fellow board members in massachusetts and randy hertzler of euro source in pennsylvania. the deadline -- just 10 weeks from now. after that -- after that that point our member businesses face extinction. although many of us have already paid for testing of our products, we simply cannot afford to pay for the services of a cpsc certified lab. throughout the last two years, we have slowly witnessed many of our members close their businesses or change their business models as to not include children's products. i have with me today a few examples of these businesses. first you see a wooden toy airplane. this toy made by our member john greco in new jersey is made solely from wood.

the coming requirement for testing in the cpsia makes it economically impossible to produce items like this in small batches. rather than continue to make children's products, mr. greco decided to close that aspect of his business this past september. as he shared with me, quote, i was never looking to get rich making wooden toys. i did it because i enjoyed making toys that made kids happy. end quote. second, you see an award-winning custom designed fabric toy monster created by stephanie and michael owners of curly k cuties in texas. children and their parents can go online and design their own personal monster. after much research, curlie q cuties found they could never afford to test each unique design to astm standards and decided to close their business at the end of this year. she cites the reason for the company's closing due to, quote, a law that does not address our particular manufacturing

scenario. end quote. put simply, the cpsia makes no allowances for one of a kind items. third, my fellow board member randy hertzler family business focuses on often hard to find toys primarily imported from the european union. these toys that represented 44% of its sales in 2006 to 2007 have disappeared from the u.s. market all together because of the cpsia's lack of alignment with european standards. many quality european toy companies will no longer sell like randy. he fears he will lit date and close in 2011. we find it hard to believe that it was congress' intent with the cpsia to remove products and businesses like these from the marketplace. while they have worked closely with the cpsia submitting comments to pending rules and sponsored workshops, regular

email and phone contact with cpsc staff we feel strongly that the current legislation does not grant the cpsc the flexibility to address our members needs. we have offered a number of suggestions that we feel will ensure the safety of children's products yet amend the cpsia to be more workable for the business wes represent. we are more than happy to for further suggestions today. two needed changes include granting the cpsc the authority to use risk analysis to allow enforcement flexibility of third-party testing and content limits.

and congress to make similar allowances for manufacturers to produce in small barges exempting them. it's important that these manufacturers would not be exempted from the standards themselves only from the third-party testing protocol. over the last two years we've been told countless times that the cpsia was never meant to adversely affect our businesses. we have worked tirelessly. along with many others to enact commonsense changes within this legislation. always holding on to the fact that the products we create are safe. on behalf of our members i thank this committee for addressing this important issue and urge you to quickly laws at the cpsia correcting these unintended questions. -- consequences. thank you.

>> and how we addressed to implement it. one thing that was missing from the discussion was the context of what before two things happen. before we pass this. can you briefly paint a landscape for us what it looked like before those two things happened? >> sure. i'd be happy to. i described what cpsc had suffered as death by 1,000 cuts. the cpsc's budget had been decimated and had never been restored. in 1972, when this cpsc was first created, the agency was appropriated $34.7 million. they had a staff of 786 full-time employees. the agency's budget since that time did not keep up with inflation, did not keep up with

its deteriorating infrastructure. did not keep up with the changes in consumer products. and did not keep up with the -- with the increasing data collection needs? the agency suffered repeated and severe cuts during the last two decades falling from a high of 978 employees in 1980 to just 401 in 2007. a loss of almost 60%. so what we were all faced with as we were looking to make cpsc more robust was a beleaguered agency that was starved of resources of legislative authority and an appropriate resources to do what it needed to do to protect to american public and it's only with cpsia that the commission has been given a boost of all of these things. >> let me ask about one of the

things that cpsia that they're still in the process of doing. they're getting closer on it but it's the database. what is your perception of how that has gone and how useful the database might be -- what is it march of next year? >> yes. the database, thanks to your leadership and the leadership of your staff and this committee, subcommittee and full committee, will be implemented in march, 2011. it is a very important resource for consumers because again looking at the state of the product safety world before cpsia passed, consumers were and right now are in the dark. because of section 6b of the consumer product safety act which is still in effect, cpsc unlike any other government agency has to basically ask permission from the manufacturer of a particular product before they can disclose information about that product to the public.

that has hampered the agency. that has kept critical safety information that affects life and death out of the hands of consumers. and it has really put consumers under a veil of ignorance. what this database will do because of it's out of section 6b will provide a very useful resource. that consumers, when they have a problem they can report it as they do now, however, they can report it online and it will be public. importantly, as what's prescribed by this committee and by congress generally there's very specific criteria that is required before a posting can be made so the concerns that have been raised about the definition of a consumer being broad, all of that is narrowed very much by the fact that if there is not essential information about the product, about the harm, then the posting will not be available. so i think that the impact of this database will be profound. >> i must say that yesterday i

went on the nhtsa website -- i have a 19 -- a 2003 ford taurus. and i had looked it up on the nhtsa database on their website because i was having a problem with it and i wanted to see if others had the same problem and give me some direction and i found that very helpful. dr. gardener, let me ask you something -- a follow-up on something you said in your testimony. you talked about how, you know, you've been a physician -- i think you said for 37 years? >> yes. >> and that you're seeing different types of injuries today. i guess what you're saying there were injuries that you used to see in children that you just don't see much anymore. could you elaborate on that? >> yes, let me give you a specific example and it's the issue of walkers. a while back walkers had wheels. they were small. in size. they were mobile. children loved them 'cause it made them mobile. parents loved them 'cause it was a hands-free -- turn their back on their kids for a minute.

the problem is, my experience was toddlers are drawn like magnets to stairs. an open stairway is a magnet and pulls them forward. and unfortunately when they're in a walker they'll just go down the stairs in their walker and often land on their head. it was very common for me to see significant head injuries not just concussions but skull fractures, intercranial bleeds and the most common cause of head injuries in toddlers, this was several years ago was clearly walkers. and we were forever warning parents that walkers were dangerous. and that they should always supervise and preferably never have their child in a walker and that's one example where walkers are no longer either mobile. they are a stationary object that the child can bounce and play but it's not going to move anywhere or they are so wide they won't fit through a doorway and allow them to go down the stairs. we would prefer children not to be in walkers but they don't create the risk of head injury that they did several years ago. >> all right. so based on, you know, your area

of practice, are you seeing fewer injuries to children based on children's products? can you say that? >> you know, it keeps changing. and i referred to that a little bit with the emerging hazards. i think we just see new risks and we need to be aware of that. for example, the button battery. there's these new generation of lithium button batteries that children perceive as toys. or they swallow coins. and they are very easy to confuse on an x-ray with a coin. if this lithium button battery is trapped inesophagus for a minimum of two hours it causes irreversible damage to the esophagus or cause perforation of the esophagus. the leading batteries is a tv remote. the remote drops, back pops up and the batteries pop out. that's an injury i never saw

before and that's an example of the new emerging hazard. >> thank you. ms. chuckas, i'm really interested what you said a few moments ago. it may be hard to believe but we did try to, you know, draft this legislation in a way that we were trying to find the balance. just because a small company of craftsman, maybe of one person maybe makes one toy at a time and just sells them at, you know, craft fairs, et cetera or maybe they sell them in retail stores but just because it's made by one person in his or her shop doesn't mean that it's automatically safe. i mean, that toy can injure a kid just like something made by, you know, one of the big companies. so we're trying to find that balance of, you know, how do we provide a safe marketplace and, you know, children's safety but

also understand that, you know, we're trying not to make this too burdensome on smaller companies. and, you know, i'm not sure that we got that balance exactly right. but we have tried to do that. and your testimony, you know, has been -- has been very important. also, i was going to ask you and you may not know, there may not be any way to answer this question, but understanding this difficult recession, some of these small companies are going to go out of business anyway. do you have a sense of how many are going to out of business because of the economy versus the changes in the consumer production laws? -- protection laws? can you gauge that? >> it is a hard thing to gauge because certainly the economy of everything has been a factor within these businesses as well. but i think what's happened is that the drive to continue to try to do what one loves has left.

because the overwhelming sense of this legislation is something people can't get past. so it becomes the straw that broke the camel's back kind of thing. it's one more thing they couldn't deal with. >> the cpsc has a list of, you know, products that -- they know don't contain lead and it's my understanding is you don't have to do any third-party testing and it would -- am i wrong on that? >> for the lead content, you're correct. the issue with the toy is the astm safety standards. i submitted within my written testimony some quotes from -- this wooden toy, for example, sells for $110. when john contacted a cpsc-approved lab which was difficult for him to find a lab actually that he could work with to begin with in the united states, he found one. he had to send 12 of this toy. he made 20 of them. so 12 of them had to be sent in

order to comply with the toy safety standard aspect. and so that was roughly around $1300 worth of inventory he wouldn't get back and in addition to the shipping and the lab fees which he didn't get that far with them. what the lab tests for the multitude of tests that would have to be done on this wooden toy airplane. >> when you and your members contact the cpsc issue, is it your perception that they're listening that they're trying to work with you? or maybe do they give you a sense that their hands were tied because of the law? how responsive has this -- >> extremely responsive. we've spoken directly with 4 out of 5 of the commissioners. chair tenenbaum, commissioner northup, commissioner adler have made themselves readily available, their staffs have been readily available. and within a week after they appointed the new small business

ombudsman we had a conference call with him. very readily available. they've been great working with us. >> has it translated into action, though, or relief? >> to some extent. we're waiting still on the component safety certification rules to come down. we had really hoped that would have been done a long time ago but we recognize the massive rulemaking undertaking that is. so we feel that they are listening to our concerns. it hasn't always articulated itself into a ruling that was going to be helpful. but we do feel they are listening. they are trying. >> okay. good. mr. lamar, let me ask you, if i may, kind of follow up on that same question. i know that your industry has had a lot of contact with the cpsc. >> uh-huh. >> and i'm curious about, you know, if your perception is that they've been receptive and willing to listen?

and even if they have, do they kind of come back and say that their hands are tied? so same question? >> i think they have been extraordinarily responsive. i would agree with jill. we've had conversations, multiple conversations, with commissioners or staff, several of the commissioners have come and presented at training workshops that we've held and throughout the united states and around the world. they've been very eager to help out when they can. many times the reaction we get is you raise some good points. we don't know if we can go that far or you've raised some good points. the legislation doesn't allow us to accommodate the way you might request that you have to recalculate your proposal. sometimes even though -- i think when they want to be responsive, they're not able to be as responsive because there's a lot of other industries asking the same question. behind me there's a ton of industry representatives

representing everybody from books to atv's to science kits to you name it and they are asking the exact same questions. many times on the same kinds of issues. and there's only so many people at the agency and i think their ability to respond to all of these questions coming in makes it difficult for them to be as responsive to everybody as quickly as they probably could be. >> right. let me ask -- one reason i wanted to ask you that question, you said in your written testimony -- you said, quote, product safety standards that work best are those that are created through a transparent and predictable process. if one group appears shut out, the final result may not be credible or accepted by all, end quote. and from that i guess i was inferring that you guys felt like you had been shut out or had not been listened to. >> no, what i was trying to describe is the nirvana. you want to have a situation where everybody has an opportunity to comment. i think chair tenenbaum mentioned when she was

discussing the cadmium approach is that they were going to work with the voluntary standard-setting community so that everybody would have an opportunity to participate. that would focus on the products and the specific risk rather than -- rather than trying to create something that's out there. i think that kind of goes back to the points i made before, some of those eight points. >> and one of the things you talked about is zipper testing. >> uh-huh. >> have there been problems with zippers having high lead content? has that been an issue either now or in the past? >> i'm glad you asked that question. there's a lot of confusion. we presented a lot of data to the agency, 5 or 6,000 test results i think it was what it came out to. this was when we did our determination and that there was no -- we're seeking the determination there was no lead in text tiles. and in addition to proving that there was no lead in text tiles, we found -- and this was precpsia inventory, so this was

inventory that had been produced before people knew what the -- what the new lead rules were going to be even before they even knew that they were being discussed. and the incidents of lead in things like zippers, buttons, snaps, other kinds of things of accessories and clothing was about 3 to 5%. so what we found was that it's not in textiles. it may be in a very, very small isolated, rare set of circumstances in some kinds of components. moreover, what we found is that -- if it were like in a zipper, it might be in the stop at the bottom of the zipper wasn't in the pull, the slider, the teeth, all these other aspects of the zipper machinery or equipment. so you found these very isolated rare circumstances. the problem as is translated as implementation began is that the zipper stopped, for example -- and i brought a pair of pants that illustrates it.

it might be violative. if that was above the 600 parts per million, then that meant the entire zipper was above six00 parts per million which meant the entire pants was above 600 pants of million which means a whole shipment might be above it. it's kind of a reference to the old children's parable for one of the nail the kingdom was lost and one of the zipper was compliant and the entire shipment and the order was lost and so a lot of inventory had to get destroyed because you might find that in one zipper stop that was problem. and that was a significant problem that we had. in our industry. i think as people knew these rules, they now started to it produce zippers that are compliant. they are going through and making sure that -- that the metal used -- the processes used in the future and for future shipments is going to be compliant with that -- with the 100 parts per million because they are looking down the road. >> we actually saw that as we were working on the cpsia

through the process some of the companies manufacturers, retailers are already making changes in anticipation of, you know, the law taking effect. and, you know, hopefully what it does in dr. gardener's world it helps create a safer place for everybody. but dr. gardener, let me ask you about something that was touched on more in the previous panel but a little bit here. about lead. there's a lot of discussion in the first panel about lead and i assume that you would say that there is no safe level of lead. we've kind of talked about that before. but is the real issue with lead solublity? if we were looking at some modification of the existing cpsia when it comes to lead and maybe giving a little more flexibility or a little more direction on this, i guess -- from your standpoint, what are

the two or three things we need to know about lead? >> i think the most important thing for people to realize in lead in very simple terms is that it's a neurotoxin. in simple language, it causes brain damage that's permanent and irreversible. the other important medical aspect of lead is that it's a cumulative. >> does that mean children are more susceptible to it? >> yes, particularly younger children as their brain is developing and they are acquiring new skills in early brain development, there's more of a long-lasting impact on their subsequent development and behavior and i.q. and function. >> so tell us about the cumulative aspects. >> yes. but the real issue is that -- well, part of the issue is that lead stays in your body for many years, if not decades. and it accumulates. so one of the difficult issues is that an exposure to a small amount of lead in and of itself

may not be harmful. but as that adds on and it's additive and it continues over a period of time, you can easily reach levels that are harmful even though those individual exposures are small. the other thing that's hard to monitor and measure is the starting point that that child is starting at at the lead exposure. if they are starting with a blood lead level of 8 and they're exposed to small amounts over a period of time take them over 10, as opposed to the child that starts with a blood level of 1 that goes to 3, so we're dealing with the bioavailability or the absorption which is such a moving target in terms of how much is being absorbed and stored over time and what the vulnerability is of that child or adolescent or even adult absorbing that lead. lead is a poison. and it's very difficult to talk about safe levels when there essentially isn't one. >> right. it's been -- it's been a

difficult topic within the cpsia and the cpsc trying to implement this because, you know, there's a lot of lead in products out there. and, you know, some products it's just a necessary ingredient and it's been used for different things at different times. and, you know, some of these parts are not accessible at all and the cpsc has really been struggling with this and working through a lot of these issues over time. so we'll continue that discussion with all of you all -- >> part of the issue there's background lead as well. you can't eliminate all the background lead and that's just adding to the lead load if you will. >> but i guess the idea would be if you can lessen the load especially in children's products -- >> yes. >> that's a good thing to do because they do have this other -- >> it's essential. >> yeah. >> well, listen, you guys have been great. i want to thank all the panelists. we're going to leave the record open for two weeks. we i'm sure will have lots of follow-up questions because i have several more pages. i don't want to keep you all day.

but i'm sure we'll have some follow-up questions and other questions from the committee members who couldn't be here today. so i want to thank all of y'all for everything that you do and like we said before, as we go through 2011, we will continue this dialog, whether it would be here in the subcommittee or in -- you know, our offices or just informally or whatever. but your input is very important. we appreciate all of you for being here. and thank you and have a great holiday season. >> thank you. [inaudible conversations]

[inaudible conversations] [inaudible conversations] >> the u.s. senate is about to gavel in to start this friday. general speeches on the agenda, no legislative business expected to be conducted today.

last night lawmakers approved a short-term extension of federal funding avoiding a government shutdown. we may hear debate today on the middle class tax cut bill which the house approved yesterday. and now live senate coverage here on c-span2. the presiding officer: the senate will come to order. the chaplain, dr. barry black, will lead the senate in prayer. the chaplain : let us pray.

o god of time and eternity. use our lawmakers today as instruments of your will. give them the wisdom to turn from every thought, word, and deed that weakens instead of strengthens. lord, help them to desire to be people of integrity, individually and corporately. may this be a day when our senators serve you with gladness because your joy has filled their hearts. lord, all nations are yours. help us to trust you to rule our

world. 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 3, 2010. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable jeff merkley, a senator from the

state of oregon, to perform the duties of the chair. signed: daniel k. inouye, president pro tempore. mr. reid: mr. president? the presiding officer: the majority leader. mr. reid: following leader remarks there will be a period of morning business with senators allowed to speak for up to ten minutes each. last night i filed cloture votes on two tax cuts amendments. those votes are expected to occur tomorrow. senators will be notified as to when these votes will be scheduled. i have not had the opportunity to meet with the republican leader. we'll do that and try to set up votes for as convenient a time as possible. mr. president, i hoped we would be able todom an agreement with republicans -- to come to an agreement to hold votes today on taxes for middle-class families. but the republicans wouldn't agree. democrats priorities are very clear, protecting middle-class families every way we can. tomorrow's votes will show where the republican priorities are

and where ours are. those votes will clearly demonstrate who supports the middle class, and that includes every senator. the minority can spin any way that want what's taken place the last 24 hours. they can pretend giving the rich tax breaks creates jobs but we know it doesn't. if that were the case, mr. president, the economy would be booming except during the last years of the bush administration when these tax cuts went into effect, we lost 8 million jobs. we can pretend we can afford to give them another handout -- that is the billionaires -- even though we know we kafpblt no matter -- we can't. no matter how many times you pretend, it doesn't make it true. the truth is simple. holdinged middle-class tax cuts hostage for tax breaks for the wealthy they don't need and we can't afford is irresponsible. a lot has been written about the letter 42 republican senators sent me. maybe it's news they put in writing, but that's all that's

new about it. because as the presiding officer knows, everything we've tried to do legislatively this year has been stymied, stocked with filibusters, well more than 100. republicans have been holding good legislation hostage for four years. important bills, noncontroversial bills, every bill. it's why we have a lame-duck session with such long to-do list. it's interesting, mr. president, i heard one of the republican senators, my friend, the senior senator from tennessee, say that the majority leader fills the tree. mr. president, we've had lots of opportunities to offer amendments. the problem is it's not offering amendments. they're not satisfied with that. they want the results. they're not willing to offer an amendment that they lose. they're only willing to offer amendments that they want to win. they don't win them, then they stop everything. that is the way it used to be done around here and it shouldn't be done in the future

that way. since they sent me that letter, a lot of focus has been on the political impact. i'm more interested on the impact on the people i represent. when the republicans take their ball and go home, here's what happens. more than 83,000 nevadans who are jobless will lose unemployment benefits over the next year. the council of economic advisorses predicted that will cost the country 600,000 jobs. what else happens? a treaty that would make america safer goes nowhere. a treaty endorsed yesterday by the secretaries of state for the last five republican presidents. without the start treaty, there are more nuclear weapons than there should be. we know less about the russian nuclear arsenal than we need to. and americans are less safe. here's one more consequence of the republican ultimate tupl. thousands of -- ultimatum. thousands of first responders on

9/11 got sick from the toxins there. the longer republicans stall, the longer these heroes have to wait for the health care and compensation they deserve. our tens of thousands of unemployed nevadans at risk of losing their lifeline. why is nevada at risk of losing their jobs? why is the start treaty stalled? why are the 9/11 heroes still sick with nowhere to turn? each of these questions has the same answer: because republican senators want to give their richest friends a tax break they don't need, many don't want and none of us can afford. mr. president, would the chair announce morning business. the presiding officer: under the previous order, the leadership time is reserved. under the previous order, there will now be a period of morning business with senators permitted to speak therein for up to ten minutes each.

the clerk will call the roll. quorum call:

quorum call:

a senator: mr. president? the presiding officer: the senator from montana. mr. baucus: mr. president, i ask unanimous consent that the following staff be allowed floor privileges during consideration -- i ask that the proceedings under the quorum call be dispensed with. the presiding officer: without

objection. mr. baucus: i ask to speak as if in morning business for as much time as i consume. the presiding officer: without objection. mr. baucus: mr. president, i ask consent that the following staff be allowed floor privileges during consideration of the tax bill, mary baker, daniel dellerson, andrew fish one, william kelog, deborah ma, jen perric, jane wasario, minisrodiko and mr. sullivan. the textbook principles of economic, president bush's chief economic adviser wrote this -- quote -- "economics is the study of how society manages its scrace resources." we could say the same thing about fiscal policy.

fiscal policy is about how society, active through its government, chooses to allocate case resources. -- scrace resources. there is not an endless supply of money. we have to make choices. every time that we put together a budget, we have to make choices. every time that we formulate the nation's tax policy, we have to make choices. so when it comes to whether to extend the 2001 tax cuts, once again, we have to make choices. it's a question of priorities. the debate over what to do about the 2001 and 2003 tax cuts for those with the highest incomes is a debate about the price. -- about priorities. are we better off to devoting scrace resources for a larger tax a at the top or to promote investment rap create new

jobs -- and create new jobs or are we better off to reducing the federal budget deficit and the federal debt. those are the chases that we need to make. today the senate is considering how we should make those choices. the amendment that we have offered says -- and we're about to offer -- a senator: mr. president, would my friend, the distinguished chairman of the finance committee allow me to interrupt? the presiding officer: the majority leader. mr. reid: i would ask the record to show that there is no interruption. the presiding officer: without objection. mr. reid: mr. president, i think it's appropriate that everyone be notified that there will be no roll call votes tomorrow. we are working on what time it will be tomorrow. as everyone, and this is the third time we were within inches of having something worked out on votes today, but for reasons that -- for reasons that i don't fully understand, the republicans didn't agree to that

at the last minute, and now we have to figure out what time we're going to vote tomorrow. if we can't work it out by consent, then, of course, we'll do it one after we come in, which is the rule. but we have competing interest. we have people who want it late tomorrow. we have people who want it early tomorrow. we'll see what we can do to see how we can do that. i thank my good friend for allowing me to interrupt. mr. baucus: thank you for your hard work on this. no one is working harder than you do to work out the schedule to address these issues. we all thank you. mr. president, as i was saying, the amendment that we have offered says basically, let's make the middle-class tax cuts permanent. that's something on which pretty much everyone in this chamber should agree. after we have cut taxes for middle class americans, then let's have an honest debate. let's debate whether extending tax cuts for the very top incomes is the right priority. but in any case, making middle

class tax cuts permanent is the right thing to do. let's not allow tax cuts for middle class americans to be held hostage to partisan wrangling to those who make the very most. so how did we come to this choice? let me take a few minutes to review how we got here. in 2001, congress enacted legislation to let american families keep more of their money. many of these tax incentives phased in over several years. in 2003 congress enacted legislation adding new tax incentives and speeding up implementation of the 2001 law. the 2001 and the 2003 tax cuts lower tax rates for all taxpayers. and those laws provided much-needed tax relief for families, education and small business. many of these tax provisions have broad support across the political spectrum.

but these tax benefits are not permanent. beginning on january 1 all of these 2001 and 2003 tax cuts expire, even though for americans who need them the most. at the same time the federal debt is at its highest level since shortly after world war ii. and our fiscal challenges are grow with the retirement of the baby boom generation. the amendment that we consider today responds to both of these challenges. so what would our amendment do? first, our amendment to extend tax cuts for middle class american families. our amendment would permanently extend the lower tax rates for income up to $250,000 for married couples and $200,000 for individuals. extending these lower tax rates would benefit all taxpayers -- all taxpayers, including higher income taxpayers. in fact, higher income taxpayers

would receive the largest tax benefits in terms of dollars per taxpayer. and that's, of course, because we have our -- our marginal rate system in america, so it won't -- tax cut make it permanent all -- taxes for those americans below $250,000 will benefit all americans, not only those below $250,000 but below $250,000 will get a benefit. the higher income tax pairs will receive a higher benefit. our amendment would make permanent to help working families with children. a number of people living in poverty is at a 15-year high. one out of every five american children lives in poverty. many of these provisions in our amendment would help to keep children and their families out of poverty. the amendment would make permanent the expanded earned income tax credit for families

with three or more children. the increased tax credit provides more help to families with children. the partially refundable portion of the credit allows families to receive a benefit even when their tax liability is low as long as the family earned an income of more than $3,000. this credit helps to support 13 million children and low-income working families every year. these families are likely to spend every dollar they receive right away. and that means that this provision would also help the economy. the increased dependent child care credit recognizes the increased cost of child care for working families. people should be able to go to work and have quality care they need for their children. in 2008 the dependent care credit helped more than 6.5 million working families to make ends meet. our amendment would make permanent a tax benefit for

employers who construct, build, or expand property used as a child care facility. this benefit recognizes the contribution some employers make to help their employees balance child raising and a career. the amendment would provide permanent marriage penalty relief. that way married couples would not get higher taxes as an add wedding present. the amendment would direct that certain government programs disregard refundable tax credits when determining eligibility for programs. this would ensure that americans most in need would not be worse off because of tax incentives. we don't want to give with one hand and take away with the other. our amendment also addresses the importance of getting a quality education and the increased cost of getting an education. our amendment would make it easier to deduct student loan interest. it would eliminate the restriction on the number of months eligible for the

deduction and it would expand the eligibility to more postgraduates. our amendment would make permanent the american opportunity tax credit. this would help students to afford a higher education. this provision is a partially refundable tax credit up to $2,500 for the cost of tuition and fees, including books. the amendment includes an income exclusion for loan repayment for programs for postgraduate who becomes a health professional in an underserved area. and the amendment would encourage continued education for workers by allowing an exclusion from income for employer-provided educational assistance programs. what we do about capital gains and dividends, right now capital gains are currently taxed at a maximum rate of 15%. and dividends are treated as capital gains. this treatment expires at the end of this year.

starting january 1, unless we act, capital gains will be taxed at 20% and dividends will be treated as ordinary income. our amendment would make permanent the current capital gains rate for taxpayers with incomes up to $250,000 for married couples and up to $200,000 for individuals. the amendment continues to treat dividends as capital gains for all taxpayers. so dividends would not be treated as ordinary income for any taxpayer. this would level the plague tpaoefpltd this would en-- playing field. this would ensure a taxpayer would not favor one type of investment over the other. what do we do about the alternative minimum tax? our amendment would provide two years of relief from the a.m.t. every year we talk about the a.m.t. and how it snares hardworking americans. originally congress created the a.m.t. to stop -- get this -- 155 millionaires from completely avoiding income taxes.

that was the point of the ta*fpl it was an -- the point of the a.m.t. how about today? how millions of hardworking families are subject to this dreadful tax. not 15 millionaires, but millions of -- not 155 millionaires but millions of people. families working hard find themselves hit with increasing taxes. to keep of number of taxpayers subject to this tax from growing, congress has to pass an a.m.t. patch every year. without an a.m.t. fix, the number of taxpayers subject to the tax would explode. in montana, congress's failure to enact the patch would mean more than six times as many taxpayers would have the burden. our amendment would take care of the a.m.t. for 2010 and 2011. during that time congress can deal with this stealth tax once and for all as part of tax reform. how about small business?

our amendment would benefit small business owners by making permanent the 2007 expansion of section 179 expensing. what about the state tax? our amendment would provide permanent estate tax relief. in 2001 congress voted to provide staes tax relief for families. we decreased the rate and increased the exemption over time until we had complete repeal for 2010 only. that's what we have today, 2010. next year if we don't act the law will go back up to the 2001 rate. this has resulted in uncertainty in planning for american families. our amendment would eliminate that uncertainty. the amendment would make permanent the 2009 estate tax law going forward. it would set top tax rate at 45%, an exemption which a thousands $7 million -- which

equals $7 million a couple. our amendment would provide an exemption for family matches and farms. this provision would ensure no family farm or ranch ever has to be sold to pay estate taxes. our amendment would simplify planning for spouses. most people believe that a couple automatically receives double the exemption amount. if an exemption is $3.5 million most folks assume a couple gets $7 million. what many people don't know is to get the full $7 million exemption, couples have to plan. our amendment would simplify planning for spouses by allowing the transfer of any unused exemption between spouses. this would make the law work the way that most people think that it works already. resulting estate tax law would provide certainty to taxpayers and the remaining estate tax that affects only the heirs of the very largest estates.

it would ensure a small number of people who inherit so much money they never have to work during their life would contribute their fair share. what about the provision that folks call tax extenders? our amendment would extend a number of other tax provisions important to individuals, businesses and state and local governments. these provisions will continue to help create jobs and cut taxes. our amendment would create jobs by improving our nation's infrastructure, reduce the cost to local governments to build roads, bridges, and water treatment facilities. the amendment would extend multiple centers that promote energy sustain ability and efficiency. the amendment would extend the per dollar per gallon credit for biodiesel and extend the manufacturers credit for the construction of new energy-efficient homes. the amendment includes a credit for energy-efficient appliances and a credit for alternative

fuel motor vehicles. the amendment includes an extension of the advanced energy investment credit for businesses engaged in the manufacture and technologies for the production of renewable energy and energy storage. and the amendment would provide parity for transit benefits, employers can provide tax-free benefits to their employees for transit and parking. our amendment would extend a number of tax cuts for individuals, including an extension of the making work pay credit, very stimulating that proefplgts helps the economy -- provision. it helps the economy dramatically. our amendment would help teachers by extending the expense deductions for teachers who buy school supplies for their class room. and our amendment would extend the qualified tuition deduction to help with college costs.

this amendment would extend much-needed relief for communities that have suffered from natural disasters. and our amendment would extend important business tax provisions to help create jobs and make our companies competitive in the global economy. the amendment would extend the research and development credit to help american businesses keep on the cutting edge. our amendment also includes a provision that will help small businesses across our country. the provision would repeal an expansion of information reporting rules that was enacted this past year, otherwise known as 1099. those rules expand the current information reporting requirements to include payments businesses made to corporations and payments for goods and property, not just services. this provision known as the 1099 provision imposes a record keeping burden on small businesses that takes away from the time that business owners need to expand their business

and create jobs. this information reporting went too far, especially in this difficult economy. this t's important -- it's important we repeal this expansion of information reporting. some will say that we should extend tax cuts for everyone, even the very rich. america's working through tough economic times. at the same time our country has record deficits. our amendment would balance these two concerns. our amendment would extend all the tax cuts affecting middle- and lower-income americans that congress enacted in 2001, in 2003 that sunset this year. our amendment would also extend several expiring tax cuts benefitting middle and lower-income americans that congress enacted in 2009. our amendment would protect americans who have been struggling to get by. our amendment would also benefit taxpayers with higher incomes.

the cuts in our amendment apply to all of the income up to $200,000 for individuals and $250,000 for couples, even if the taxpayer makes more than that. at the same time we crafted our amendment with recognition of the mounting deficits that our country faces. our amendment would not rely on a gimmick of temporarily extending tax cuts, knowing that future congresses will be unable to resist the temptation to keep extending these cuts. it's about priorities. our amendment makes choices. our amendment would not make permanent all the expiring tax cuts that congress enacted in 2009. it would not make permanent tax cuts that benefit only those americans who need them the least. only 3% of americans have incomes greater than $250,000 for couples or $200,000 for individuals. 3%. over the past quarter century,

the average after-tax income of the wealthiest 5% has grown 150%. at the same time in the last past quarter-century, the average after-tax income of middle-income amendments has grown 28%. 150% for the top 5% wealthiest. only 28% for middle-income americans. one's grown 150%. the other 28%. today the bottom 80% of households receive less than half of all after-tax income. the benefits of recent economic growth have not been widely shared. so the middle class should not be asked to tighten their belts as much as the high-income folks who have benefited the most. and as we come out of the great recession, we need to recognize the growing federal budget

deficit. in 2010, the deficit was $1.3 trillion. that's the second-highest level relative to the size of the economy since 1945. this was exceeded only by 2009's $1.4 trillion deficit. and the congressional budget office projects that deficits will remain high for the rest of the decade. that means the federal debt will keep growing. when we passed the 2001 tax cuts, the federal government was running a surplus. when we passed the 2001 tax cuts, economists projected big surpluses as far as the eye could see. times have changed. we need to consider our current fiscal condition. with 15 million americans still out of work, it's important that we keep our economy on the path to recovery by extending tax cuts for families who need them the most and who will spend it.

our amendment strikes the right balance. it's a question of priorities. our amendment says that we should not devote scarce resources to a larger tax cut for those at the very top. our amendment says that we would be better off devoting those resources to new tax incentives and create new jobs. or we would be better off devoting those scarce resources to reduce the federal budget deficit and debt. those are the choices that we have to make. our amendment says let's make the middle-class tax cuts permanent. our amendment says let's not allow tax cuts for middle-class americans to be held hostage to those who make the very most. there is not an endless supply of money. we have to make choices. i submit that these are the choices that we need to make. and i encourage my colleagues to support our amendment. i suggest the absence of a

quorum. the presiding officer: the clerk will call the roll. mr. baucus: i yield to the senator from ohio. the presiding officer: without objection. the senator from ohio. mr. brown: thank you, mr. president. i thank the senior senator from montana who laid out exactly why his efforts to extend the bush tax cuts to the middle class, up to $250,000, is not to -- not to extend them beyond that is the exact right public policy. it's good fiscal policy. it's good economic policy. it's good for our country. and it's exactly the right thing to do. i thank him. i thank him for his explanation, including the earned-income tax credit, which is the best tax incentive to help people working hard, playing by the rules, making $20 thousand, $30,000 a year, encouraging work the way

the eitc does. i also thank the chairman of the finance committee, the senior senator from montana, for including the unemployment insurance in this. 85,000 ohioans three nights ago lost their unemployment insurance. these are people, man of them -- many of them, i have read letters on the senate floor and i will read today. many of them have worked for 20, 30, 40 years and simply can't find a job. there are five people applying for jobs for every one job opening in my state and in this country. it's so important that these people continue to at least get some assistance. it's -- in spite of what some of my republican colleagues suggest, unemployment insurance is insurance. it's not welfare. the -- their employer on their behalf pays into the unemployment insurance fund in their states and when they lose their jobs, because it's insurance, they should get assistance. it's just like fire insurance or

health insurance, you don't want to use it, but you want it to be there if you need it. that's why it's so important. i appreciate senator baucus' discussion of why this is the right policy. and before i read some letters about some people -- about the unemployment benefits i want to talk for a moment about why that is the right policy. the bush tax cuts for the -- primarily went to the wealthy in 2001 and 2003 have proven and senator mccaskill said it, it was basically an experiment. for 10 years, we'll try and see if this works. i didn't support them when they passed the house many years ago, because i thought it was too tilted toward upper-income people and not nearly the focus they should have been on the middle class. it was an experiment in many ways. you give major tax breaks to the rich, the so-called trickle-down economic theory. and the theory then is enough -- the higher people and enough will trickle down, provide jobs

and create and strengthen the middle class. what we saw during the bush eight years were the main thrust of economic policy was the tax break for -- that was the stated policy. if you cut taxes enough on the wealthiest americans, that will drive the economy forward. we know in those eight years of the bush administration there was a -- one million net job increase. not enough to take care -- not enough to provide jobs and even keep up with the growing population. not enough to provide jobs for kids coming out of high school. not enough to provide jobs for people leaving the army. not enough to provide jobs for people coming out of college. it is clear that experiment failed. cut taxes on the rich, only a one million net increase in jobs. it didn't work. if you look at the clinton years, the eight years before -- and these aren't opinions. these are facts. you look at the eight years before where president clinton did a mix of tax cuts, tax

increases on the wealthy, and spending cuts, he balanced the budget, we ended up with 22 million job increase. 22 million job increase with an economic policy of the clinton years that we want to follow today versus a one million job increase, not even enough to keep up with the growing population, from the bush economic policy. so it's clear what this means. not to mention, mr. president, what senator baucus has pointed out too is we are, in essence, borrowing $700 billion to pay for the tax cuts, we're borrowing $700 billion from the chinese. that's where we borrow a lot of money. we're taking the 00 billion and putting it -- $700 billion and putting it on the credit cards. and the $700 billion is given to the wealthiest taxpayers. you borrow it from china, charge it to our children and grandchildren and give it to people who are millionaires and

billionaires. what kind of moral policy, let alone a bad economic policy. and the last thing, mr. president -- so it's bad fiscal policy to do anything but tax cuts for the middle class. it's bad economic policy. it's not fair to our children and our grandchildren. and last make a comparison -- in this bill -- between unemployment benefits extending, maintaining unemployment benefits to the 85,000 -- 85,000 families in ohio found out two days ago their unemployment insurance was no longer. 85,000 families. those are families that some of them are going to lose their homes. a father is going to have to sit down with his 12-year-old daughter and say, hone, we're going -- honey, we're going to lose this house. what school district are we going to be in, dad? i don't know. we know the hardship this creates for people if we don't extend these benefits. these are people who want to go back to work. they're trying to find jobs.

there aren't enough jobs out there. they're spending money for gasoline. they need gasoline to look for jobs. they need this to at least stay alive and at least have some decent standard of living. even john mccain's chief economic adviser from his 2008 campaign understands. he said $1 you put into unemployment benefits, you put into the dollar of a worker in zanesville, that unemployed worker, that father or mother or that man or woman is going to go out and spend that money because they need to. they need to buy shoes for the kids, they need to buy food for themselves, they need to heat their homes, they need to put gas in their cars to look for jobs. so every dollar put in unemployment generates $6.60 in economic -- $1.60 in economic activity which will create jobs. a dollar in tax cuts for the wealthy, a dollar that goes to a millionaire, what are they going to buy they're not already

buying? they simply -- they meet their needs. they have million dollars of dollars at their disgretion to do it. they're not going to buy more food. they're not going to take an extra vacation. they have the money they need. so that dollar, according to this analysis, again, john mccain's chief economic adviser, that dollar to goes to a tax cut for the wealthy ends up generating 30-some cents in economic activity creating fewer jobs. mr. president, before concluding i want to read a couple of letters from people in my state about what senator baucus' and this legislation means in terms of unemployment benefits and why it's so important. shanda from the southwest ohio dayton area, i've been out of work since february. i've been receiving unemployment benefits. i'm 36. i've been working since i was 16. this is par for the course. people working since 16, 18, full time. i applied for 100 jobs in the past month and found absolutesly

nothing. if unemployment stops, i will have enough. i know i can't return in january since i won't be able to pay my bills. unemployment is not allowing me to go on trips, eat out every day, shop till i drop, i just need a roof over my head and food in mine and my daughter's stomachs. please work diligently to extend unemployment for those who have nothing without it. lorainings from tulane county, please do what you can to get the unemployment extension passed. i've been out of a job for year. we're two months behind on our mortgage. we're exhausted our savings. my husband is out of work too due to an accident. i'm so worried. please help us. carole from summit county, akron, northeast ohio, i'm writing this for myself and other ohioans whose unemployment benefits is running out. 85 million families lost their

benefits in my state alone. i'm 61. i've been on unemployment since june. my benefits ruin out december 20. there are no jobs with senior citizens with 40 years of work experience. believe me i tried everything from wal-mart to mcdonald's. i have no savings. i lost what little retirement i had a couple years ago. i'm not asking for handout, just some help. please encourage congress to provide at least one more extension it. -- without it many ohioans will be destitute. i never thought raising a family as a single mom i would find myself in this position at this age. mr. president, i -- i know my colleagues want to do the right thing. i really do believe those who vote no on everything i believe in, i know they want to do the right thing. i just wonder, mr. president -- i know they get letters like this, because every one of us, you know, whether you're in ma mazoula or dayton every one of

us gets letters from constituents in our state that are hurting. even in states that have pretty good economies, there are people who are hurting. i don't know if our colleagues never read them or never meet people like this. i assume our colleagues don't visit food pantries like i do and some of my other colleagues do and hear the stories. i don't know that i've been to a food pantry in the last two years that i don't hear a volunteer, most of them are staffed by a volunteer, a volunteer or paid director might say, you know, see those people over there? they used to bring food in. now they're picking food up. that's just the story you hear place after place, time after time. mr. president, as i said, i don't think my colleagues are hard heart, i don't think they're callous, i wonder if they know, they're not hearing from people like carole. if they're not visiting food pantries, not stopping in a union hall and talking to an out of work carpenter, out of work

laborer who's not been called to a work site for seven or eight months. i just don't know. i ask them, you know, i've said to the majority leader, i think we should stay here until the new year. my being home with my daughters and my son and daughter-in-law and grandson and wife is very important to me. but if we don't -- if we don't continue unemployment benefits, we're going to ruin the holidays or start off with 80,000 ohioans and that number keeps growing and, frankly, i don't think we deserve much of a holiday either if that's the best we can do. mr. president, i yield the floor and suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

a senator: mr. president? the presiding officer: the senator from new mexico. mr. bingaman: mr. president, i'd ask that the quorum call be dispensed with. the presiding officer: without objection. mr. bingaman: mr. president, i'd ask permission to speak in

morning business for up to 20 minutes. the presiding officer: without objection. mr. bingaman: mr. president, let me start by thanking senator baucus for putting forward his proposal on tax issues. it is a responsible course for us to follow. it's one that i can vote for without reservation. he's basically saying, look, let's ensure that the first $250,000 that is earned by any and all americans in this next year will be subject to the lower tax rates that were put in place during president bush's time in office. the tax rates that were adopted essentially in 2001. and, of course, it also contains other very useful provisions to reinstate the estate tax at a reasonable rate with a significant amount exempted from

the estate tax. it has provisions for energy tax, extending of energy tax provisions, which i think are very important to the country. but we had a good hearing yesterday in the finance committee. i'm privileged to serve on that committee that senator baucus chairs and we had a very good hearing on the whole issue of federal revenues an outlays. -- and outlays. and i thought some useful information came out there. i was able to speak very briefly with doug elmendorf, the head of the congressional budget office, and i was particularly impressed with one chart he presented in his materials and i made a copy of that essentially that i wanted to go through and explain. because i think it puts this entire discussion into context. this chart talks about what has happened with both outlays, and that's the light blue line, and

revenues, the darker, black line, outlays and revenues of the federal government for a 40-year period, starting in 1970 and ending, essentially, right now. and you can see that in that 40-year period -- and one useful thing about the chart is it has an average and it says on average outlays were about 21 -- nearly 21%, and that is the dotted blue line across here. and it also says on average revenues, what the government collects in taxes, was about 18%, and that's the dotted black line down here. so you can see that there is -- i don't know if you call it a structural gap, but a persistent gap between what we raise for the operation of the federal government and what we spend. and every year we spend more than we raise.

and now there's an exception to that and there's a period here where these two lines cross and that is the period at the end of the clinton administration where we got to a balanced budget and a surplus. and that was achieved for a variety of reasons. and let me talk a little about those reasons. there -- there was a four-year period 1998 through 2001 where the federal government essentially did not spend more than it took in. in 2001, again, as you can see from this chart beginning in 2001 with this precipitous dropoff in revenue, the deficit began to grow. and we now have a very large deficit and the particularly disturbing thing is that when you look ahead and project where we're going to be over the next five, 10, 20 years, we are

projected to have a very large deficit indefinitely unless we change some things. and changing either the outlay numbers, what we spend, or the revenue numbers, the level of taxes that are collected, is not easy. it's not easy in this congress. it's never been easy. so how did we produce a surplus during the four years that we had a surplus? i think there were three main factors that account for that. in 1990, the congress and president george h.w. bush were able to agree to legislation that controlled spending and increased revenues as well. that was the omnibus reconciliation act of 1990. it for the first time enacted paygo rules. it also increase taxes on the wealthiest americans by raising the top income tax rate from 28%

to 31%. at the time president george h.w. bush said -- this is a -- quote -- "it's time i think it's past time to put the interest of the country first." end quote. over the next five years this legislation did reduce the deficit by a total o of $480 billion. so that was one of the factors that got us to that period of balanced budget an surplus. -- and surplus. the second factor was in 1993 when the congress and president clinton agreed, again, to legislation and increased control spending. this legislation once again raised taxes on the wealthiest americans. over the five years following that, the legislation reduced the deaf si by $430 -- deficit by $430 billion and revenue increases were responsible for over that deficit reduction that

occurred in that period. and the third factor, which is the most important is that the country enjoyed very strong economic growth during the 1990's, particularly the latter part of the 1990's. that allowed revenues to rise above the historical average that we -- we see down here, this 18% historical average for revenues. we were able to get that up significantly. mr. bingaman: both because of the changes in law that occurred under president george h.w. bush and under president clinton and the -- the very good economic circumstances that we enjoyed in the 1990's. so what caused the situation to reverse? what's it an increase in spending or was it a decrease in revenue? i think this chart makes the point very clearly that initially what caused us this

situation to reverse was the bush tax cuts of 2001. they reduced revenue b by $70 billion in that exact year, that same year, 2001. in total the tax cuts, president george w. bush signed into law reduced revenue by an estimate estimated $1.6 trillion over a 10-year period. the actual cost may have been significantly greater. simply put, the congress and the president when we enacted those bush tax cuts, so-called bush tax cuts, cut taxes more than we could afford to unless we were willing to also dramatically cut spending, and we did not cut spending. in fact, we increased spending. we increased it rather dramatically to fund the afganistan war, to fund the iraq war, to create medicare part-d.

none of that new spending was paid for. former congressional budget office and office of management and budget director peter orszag estimates is that because they were not paid for, the bush tax cuts, if extended again, and medicare part-d, those -- those together would add $5 trillion to the debt over the next decade. so -- so the votes that we're casting here on this tax issue are significant votes that will reverberate for some time and affect our economy and our deficit and our debt so people need to understand that. of course in the last three years since we've been in this recession, the deficit has worsened very substantially. revenue dropped to historic lows as the economy contracted. spending also increased due to the recovery act and also due to the automatic stablizers that we

have built into the law, such as, unemployment compensation. it's important to note that only about 10% of the debt that we have incurred ove over the next0 years -- the debt over the next 10 years is due to the recovery act. now with the economic recovery under way, the size of the deficit is beginning to stablize, and you can see that at the far right end part of the chart here where you can see these numbers beginning to -- you can see the outlay number beginning to come down, you can see the revenue number at least leveling off, and that is positive. but we can't solve -- i think the obvious point that i think that we need to understand is that we cannot solve the deficit problem by simply reverting to the situation before the economic crisis.

the chart shows that on average outlays have exceeded revenues by about 3% of gross domestic product. that's about $450 billion under our current size of our gross domestic product. in other words, if congress can only accomplish an average performance, we are looking at a half trillion dollar deficit going forward even after we are fully out of this recession. clearly we need to do better than that. congress needs to make some tough choices both to control spending and to increase revenues just as we did in the 1990's. both the president's deficit reduction commission, which i know is -- is having its final vote today and the bipartisan commission, led by my former colleague, senator pete domeni domenici, former budget director, recognize -- both of

those commissions recognize that we will need revenue increases as well as spending cuts to solve the deficit problem. the proposal that senator baucus has come forward with is to allow everyone in the country to enjoy the lower tax rates that were adopted under president bush. but only to enjoy that -- those lower rates for the firs first $250,000 of income each year. i know senator schumer has a proposal which says we will allow the lower rates on taxation, earned income, to apply to the first million dollars of income of all americans. so all americans will get the tax cut, just as they will under the proposal by senator baucus, but senator schumer's proposal would be to give them the lower rates on the entire -- on the

entire million dollars that they person in the first year. above that, they would have to go and pay the rates that were in place under president clinton's time in office in the 1990's when the economy was so strong. the question is, can we in this congress do what needs to be done to deal with the deficit issue? and particularly on this tax bill to do what needs to be done to raise revenue? tomorrow we'll be voting on whether to let the bush tax cuts expire for income abov above $250,000. one of these votes will be to effectively raise on annual income above a million dollars as i said. compared to other choices we have it seems to me this is a fairly easy choice. if we are not willing to revert

to the clinton era tax rates on any income, no matter at what level, then it's going to be very, very difficult for us to make a credible claim that we are serious about the deficit so i urge my colleagues to support the baucus proposal and i hope we can get a good, strong bipartisan vote on that. it's -- it's clear to me that americans do want to see the taxes that they are paying on the first $250,000 of their income remain where they are today. that will only happen if we are able to pass this proposal that senatosenator baucus has put fo. mr. president, i yield the floor and suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

mr. mcconnell: mr. president? the presiding officer: the republican leader is recognized. mr. mcconnell: i ask unanimous consent the quorum call be dispensed with. the presiding officer: without

objection. mr. mcconnell: mr. president, we have heard a lot from our friends on the other side of the aisle this week about the middle class. that's because their policies have been so ineffective in helping the middle class. they try to distract the american people from their record. it's that simple. this is what those in power often do when their policies don't work. they search for a target. and the targets democrats have decided on are the republicans and small business owners, our nation's leading job creators, which is, of course, really ridiculous. all of this finger pointing is doing nothing to create jobs. it's a total waste of time. this morning, we learned unemployment is now at 9.8%, even higher than last month. and democrats are responding with a vote to slam job creators with a massive tax increase. millions of out-of-work americans don't want showboats or finger pointing contests. what they would like, mr. president, are jobs. americans don't want to see

meaningless theatrics in congress. they want us to do something about the economy. and the single biggest thing we can do is to tell small businesses across the country they're not going to get a tax hike next month. these are the folks that create the jobs that every one of us claims is our first priority. why in the world would we do something that makes them even less likely to create those jobs? now, our friends on the other side know all this is just -- know all of this just as well as republicans do, but for some reason, they -- their base is demanding that they raise taxes on small business owners. it's the perfect way to punctuate their two-year experiment in antibusiness, big government policies that have only led to more joblessness, more debt and more uncertainty. over the past several weeks, we have seen a growing number of democrats begin to publicly disagree with their own leadership on the wisdom of scapegoat politics in a time of recession.

we saw this in a vivid way yesterday when so many democrats in the house defected from their leadership on the showboat speaker pelosi held over in the house, and we have seen it here in the senate where a number of democrats have told their constituents that no -- and we have seen it here in the senate where a number of democrats have told their constituents that no, of course they won't raise taxes in the middle of a recession. they know as well as republicans do that raising taxes on anybody is counterproductive in a fragile economy like ours, and they have said so. one of our democratic colleagues even went on "good morning america" and said he would extend the current rates for everyone. so we fully expect these democrats to keep their word and vote against proposals that do anything less. these votes are a purely political exercise at a time when americans are looking for action, and here's all the proof you need. the author of the plan to raise taxes on anybody who earns more than $1 million a year has

openly admitted that the only rationale for that figure is that it sounds better. that it's the best way to send a message that republicans are bad. how about forgetting who looks good and who looks bad and start thinking of what's good and what's bad for working americans. those votes are an affront to millions of people struggling to find work. while these votes -- what these votes say is that democrats care more about doing harm to their political adversaries than doing good for the middle-class americans struggling to find a job. you don't help the middle class by punishing job creators. you hurt them. you make it harder for them to find jobs, you make it harder to revive the economy. we have now had more consecutive months of 9% unemployment than at any time since the great depression, and democrats would rather play games than do something about it. it should go without saying that americans have had quite enough of this. it's time to get serious.

it's time to put the needs of middle-class americans above the needs of the liberal base that's demanding a show here in congress. and that's all that this is, a show. the left wing might find it very entertaining, but most americans don't find it amusing at all. they don't want games, they want action. it's long past time we took them very, very seriously. mr. president, i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

the presiding officer: the senator from california. mrs. boxer: mr. president, i rise today -- the presiding officer: we are in a quorum call. mrs. boxer: i ask the quorum call be vitiated. the presiding officer: without objection. mrs. feinstein: i rise today to support the middle-mctax cuts of 2010 which give permanent tax relief to struggling american families that need it most. by extending the current rates for 98% of taxpayers, this bill

provides the certainty and security necessary to protect working americans. while at the same time indicating that we need help and that we ask upper income americans to help address our growing fiscal deficits. make no mistake, extending the current tax rates for the middle class, i believe, is crucial in order to encourage economic growth. the economic turmoil of the last three years has left many american families cash strapped and struggling to stay afloat. every extra dollar is critically important. and the evidence bears this out. analysis by the congressional budget office indicates that lower and middle-class taxpayers have a higher tendency to spend every dollar they earn. consequently, by ensuring that tax rates don't rise on lower

and middle-class earners, we prevent a dramatic decline in consumer spending that could have a negative impact on this fragile economic recovery. today's job numbers are bad, in my view. they indicate we are far below what is necessary to reduce the unemployment rate. unemployment remains persistently high. 12.4%, or over 2.2 million people in my state, california, unemployed, and 9.8% or 15.1 million people across america unemployed. with economic growth projected to be slow in the near future, those numbers will likely not come down for some time. my colleagues, america is hurting right now. those who can should step up and help. i know of no millionaire who

needs a sustained tax cut of 4.6% or who has asked for one, but i know several who are willing to step up and help, and that's the irony of this debate. conversely, the evidence is extremely poor for extending tax cuts for wealthy americans. when the c.b.o. analyzed a number of different policies aimed at creating jobs, sustained tax cuts for the wealthy came in dead last. interesting. on the other hand, permanently extending the bush tax cuts for the wealthy would require require $700 billion more in deficit spending. they're unpaid for. in light of this report issued wednesday by the president's fiscal commission, of which some of my colleagues are members, i simply cannot argue for an extension of the upper income

brackets. it would be one thing if i could say that bush tax cuts for the wealthy contributed to an era of substantial economic growth and prosperity, but here's the key: history does not support that. in 2001, the first set of bush tax cuts were proposed as a means of stimulating the economy as we emerge from the dot-com bubble. of course, we were also projected to have a a $5.6 trillion, ten-year budget surplus. and we all know that when president clinton left office, he left a surplus. in light of these facts, the fact that there was money, there was a surplus, i voted for the first round of bush tax cuts. i believe that the government surpluses should be returned to the american people. but as president bush was

leaving office, we were forced to confront some very sobering truths. the ten-year budget deficit was projected to be $6.3 trillion, not the $5.6 trillion surplus that we had thought. there was a total turnaround. and the national debt had increased by over 80%. the argument made by republicans, if you remember, during that time was deficits don't matter. it doesn't matter that the iraq war wasn't funded. the tax cuts didn't matter. deficits don't matter were reiterated throughout this chamber. and the belief was that lower income tax rates would actually increase revenue for the federal government. this has been debunked by recent history. c.b.o. data shows the changes in

law between 2001-2005 resulted in deficit increases of $539 billion, and the bush tax cuts accounted for nearly half that amount. however, the most scathing indictment against extending these tax cuts for the wealthy is illustrated in our recent history of inequality and wage stagnation. from 2003 to 2007, incomes for families in the top 5% of taxpayers increased by 7% while incomes for the other 95% of taxpayers remained stagnant. so from 2003 to 2007, the only incomes that increased were the top 5%. everybody else remained

stagnant. so the economy was clearly working for the upper 5%, but not for anybody else. the average income of top 1% of income earners increased by 10 times as much as that for the bottom 90%. that's an amazing figure, if you think about it, that the 1% gained 10 times more in income than all of the other 90% of taxpayers. during the expansion of 2002 to 2007, families saw their median income drop by $2,000. that's the first time americans have seen their incomes drop during a period of economic growth. so there was growth, but the median income was dropping during that period of time.

during this period also, income tax rates for the top 1% of earners were reduced by twice as much as rates for anyone else. top 1% today -- and under the bush years -- are paying less in taxes than they did in the clinton years. so there was actually a drop in rate for the top 1%. in 2007, the top 10% took home almost half of the country's total earnings, which translates to the highest level of income inquality in our -- inequality in our nation's history in that year 2007. we face a number of daunting -- we face a number of daunting problems. our national debt is now in excess of $14 trillion. if we continue deficit spending,

we will unquestionably begin to restrict economic opportunity for this generation and those that follow. our economy is struggling to grow at at a pace that will start providing jobs, we hope, for over 14 million out of work. income inequality today is, i think, at an historic high, and it is an unacceptable high. in light of these facts, i don't see the merit in the argument that a permanent extension of the bush tax cuts for the wealthy will have a materially beneficial impact on the economy. and i applaud chairman baucus for introducing a responsible bill recognizing these stark realities. if we were to do this, we increase income inequality. if you continue to raise the tax

-- excoul excuse me, lower taxer the top brackets, all you do is increase income inequality, you grow the gap between the rich and the poor. and i would suggest, mr. president, that that bodes ill for the united states of america. chairman baucus also included two key provides in this bill, and i'd like to take a few minutes to speak of them. this summer i introduced a bill that would allow family farmers to defer their estate tax payments until they sold the farm or took it out of operation as a farm. the idea was to make sure small working family farms avoid having to make crippling decisions about their land when it came time to pay the estate tax. and let me explain why. family farms today in america are land rich and cash poor.

farm incomes have not kept pace with rising land values in this country. which puts family farms in a precarious position when it comes to settling estate tax bills. because family farmers often have little cash on hand to pay the estate tax, they can be forced to sell land to developers in order to make good on the estate tax. over multiple generations, this can decimate the operation of a farm. this proposal before us today would preserve the existence of family farms by allowing them to defer paying the estate tax until they are taken out of operation and to reassess it at a stepped-up value at that time. by doing this, we can preserve and strengthen existing family farms, which i strongly believe are part of the fabric of this country.

this provision would not be available to everyone. it includes income and asset restrictions in order to ensure that the deferral benefit goes only to farmers who need it most and not agribusinesses. if farmers who elect deferral fail out of compliance -- or, excuse me, fall out of compliance with the requirements, they would neighs a recapture -- a recapture penalty in the amount of the estate tax owed. it is my hope that in this way we can help ensure the continued existence of family farms, and i applaud the chairman for including this provision. the legislation also includes a two-year extension of the highly successful treasury grant program, which has been widely credited with maintaining strong economic growth in the renewable energy sector in 2009 and 2010. despite the severe economic

turndown. the grant program has proven a particularly effective job-creation tool. according to a lawrence berkeley national laboratories stiewrksd the program has enabled hundreds of renewable energy projects to move forward and save more than 55,000 american jobs in the wind industry alone. prior to the economic meltdown, clean energy project developers relied on tax equity partnerships with investors to take advantage of clean energy tax incentives. in 2008, the economic meltdown froze the $8 billion tax equity market, jeopardizing billions of dollars in clean energy investmeninvestment. the treasury grant program proved an effective replacement for these partnerships, supporting about $18.2 billion

in clean energy investment to build 8,600 megawatts of renewable energy generation through october 25 of this year. with most utilities and developers still unable to utilize existing production and investment tax credits and our nation's economic recovery dependent on the creation of new jobs, this two-year extension of the grant program is critical. according to a survey of all leading participants in the tax equity market, without an extension of the program the anticipated financing available for renewable energy is expected to decrease by 56% in 2011. in contrast, a recent study found that a two-year extension of the treasury grant program would result in nearly 65,000 more jobs in the solar industry

alone and enough additional solar power to power more than 1.2 million homes. so it's important to emphasize that this is not a new federal incentive program. it simply allows clean energy companies to utilize existing investment and production tax credits without having to partner with wall street banks. in conclusion, mr. president, i believe it's important to underscore who is bearing the brunt of the pain being doled out by the economic downturn and the subsequent weak recovery. the top 2% of taxpayers are not the ones suffering during this crisis. in fact, with sales of luxury goods set to surge to their highest peak since the recession began in 2007, the recovery for

the richest americans seems well under way. they are able to do well for one reason or another in this economy, but it's the income groups below them that are not, that can't get the loans, that can't meet the payrolls, whose homes are being foreclosed on, who have great difficulty surviving in this most difficult economic marketplace. so let's not forget why we are faced with this impending tax increase in the first place. the bush tax cuts were designed to sunset because they weren't paid for. they weren't paid for because we were told they would lead to higher revenues. in fact, that has not happened. it's time to let the bush tax cuts for the wealthy americans expire. thank you, mr. president. i yield the floor.

mr. durbin: mr. president? the presiding officer: the senator from illinois. mr. durbin: i have one unanimous consent request for a meet to meet today during today's session of the senate. it has the approval of the majority and minority leaders. i ask unanimous consent that this request be agreed to and be printed in the record. the presiding officer: without objection. mr. durbin: mr. president, underneath ground level of the buildings on capitol hill is a subway system. it connects on the senate side the major buildings where senators and staff and committees have their offices with this glorious capitol building. if you'll get on the subway over at the dirksen building to come over to the capitol, it is a very brief journey. i don't think it lasts an entire minute. in less than a minute you move from the dirksen office building over to the capitol building. this morning i thook journey -- this morning i took that journey leaving meeting of the deficit commission to come over to the senate floor. and in less than a minute i

emerged from the world of reality to a surreal world here in the senate. let me explain. for the last ten months, because of president obama's executive order, we've had a bipartisan deficit commission that has asked some of the hardest questions i've ever faced as an elected official. how can we come to grips with the debt of this country? what can we do to increase spendinrevenue and decrease speo our children deendz up with a large debt? the goal: was to cut $4 trillion out of the deficit in the next ten years. it sounds simple, doesn't it? with a government this size, an economy this size. but it is not. when you get down to it, hard choices have to be made. erskine bowles from north carolina, alan simpson, former senator from ayatollah, chaired

it. did a great job. it was inspired by kent conrad, our colleague from north dakota, senator judd gregg of new hampshire. they were the ones who asked for this commission. they went to work for ten months and today we voted on that commission report. i voted "yes." i left that deficit commission to take that short one-minute subway ride over here to the capitol to emerge in the senate chamber and to try to understand how two buildings so close to one another can be so far apamplet because here on the floor of the united states senate, the debate is on whether or not we should extend tax cuts for the wealthiest people in america. doing that will add dramatically to our national debt. just to put it in perspective, senator mitch mcconnell's proposal for tax cuts for the next ten years will cost us $4 trillion. does that number sound familiar?

that's the amount of deficit commission was told to eliminate in spending and create in revenue over the next ten years. all of the work of this commission, as controversial as it is, would only pay off senator mcconnell's republican tax cut proposal. meaning, we'd make no progress in reducing the deficit of the united states of america. well, let me tell but that vote. -- that vote over in the deficit commission. my phone has been ringing off the hook because some people know that i'm a progressive. i come from the left side of the spectrum. dproim a tradition of two wonderful people who served in this united states senate: paul douglas of illinois, who was my first boss on capitol hill when i was a college kid and his friend and my mentor, paul simon of illinois, who's precede me in the united states senate. they were both liberal and proud of it, but they were both

fiscally conservative. and you ask yourself, well, how could you do that? well, because as douglas once said and simon often repeated, if you're a liberal, if doesn't minor a a waste trail. it doesn't mean you can't be thriftty and find ways to cut waste and speeding so that the money that's needed in america for critical national security or the benefit of people who are struggling is there when you need it. they believe those two things were consistent, and i do, too. what this deficit commission forced us to do was to take an honest look at the debt of america. over $13 trillion. this debt has exploded in recent years. a little bit of history. when president william jefferson clinton left the white house ten years ago, the national debt was $5 trillion, the budget was in surplus, there was extra money in the budget that was

being used to buy time and longevity for social security, and it was projected that the next year there would be $120 billion surplus in the budget, ten years ago. $5 trillion debt, budget and surplus, $120 billion surplus predicted for the next year. fast forward eight years after president george w. bush, and there was a much different picture. the national debt was no longer $5 trillion. the national debt of america had risen in eight years to $12 trillion. more than double. the budget was in serious imbalance, and unfortunately, president obama inherited in his first year more than a $1 trillion deficit in the budget he was left by president bush. what happened in eight years for that dramatic negative turnaround in debt in america?

we waged two wars and didn't pay for them. we had programs that might have been fundamentally sound like the prescription drug program, but we didn't pay for it. and there was the argument by the republicans that in hard times and good times alike, tax cuts were always the answer. and so for the first time in the history of the united states of america, during two wars, we gave tax cuts away, plunging this nation deeper and deeper into debt. well, today that national debt is over $13 trillion. listen to this. 40 cents out of every dollar that we spend in washington is borrowed, 40 cents. who loans us the money? the chinese. they are our mortgagors. japan, korea, the opec nations. and sadly, as we become more deeply in debt and more indebted to them, we're at their mercy.

if tomorrow -- and it could happen as quickly as one day. if tomorrow the chinese said we have lost confidence in the american dollar, we don't believe this government is serious about deficits, we could see dramatic negative economic impact on the united states of america. we are at the mercy of our creditors, and our largest creditor is china, which happens to be today our largest global competitor for emerging markets around the world. that's why this deficit commission was so important. the commission set out not only to eliminate $4 trillion in spending over ten years, but to engage america in a conversation long overdue. think about this for a moment. if you ever happen to see the tax code of the united states of america and open it, you'll understand why most people don't. it's unintelligible. unless you're an accountant or lawyer or practicing the art,

it's hard to understand what's going on here with section and articles and subparagraphs. but that book, that tax code of america, is one of the most important books when it comes to this deficit debate, because you see each year, each year in america we spend on that tax code $1.00 in deductions -- deductions -- $1.1 trillion, $1. 1 trillion. that sum, huge as it is, is, $1.1 trillion, is more than we collect each year from all of the personal income taxes paid across america. that sum is more than we spend each year for all of the domestic discretionary nondefense programs. it's huge. and people don't know what's in it. oh, some do. there are a lot of special interest groups, businesses, groups and organizations and

associations that have protected themselves and taken care of themselves in that tax code. this deficit commission, the bowles and simpson commission that president obama put together, has finally opened the door and taken a look inside at that tax code. i think they did the right thing. what they said to america is if we eliminated all of these deductions and all these credits, how could we reduce the rates, the income tax rates paid by americans at every level and by corporations? the answer is they could be reduced dramatically, dramatically. and that to me would be a step forward. now, i'm not calling for the elimination of all the deductions and credits. some of them were important. the deduction for health insurance, mortgage interest, charitable and the like, but we should take a look at each one of them, and we virtually never do. tax reform needs to be part of deficit reform. that was my message that i take

away from this deficit commission report. some people will ask me how a person like myself, coming from my end on the political spectrum, would vote for a deficit commission report. well, it's basically this. i don't think that borrowing 40 cents out of every dollar we spend for either a nuclear missile or food stamp is sustainable, and i don't believe that being indebted for generations to china and opec makes america a more fair and just nation. when we engage in the critical decisions about our nation's future budgets, i want progressive voices at the table arguing that we must protect the most vulnerable in america and demand fairness and budget cuts and spending and revenues. my vote today for the deficit commission report is my claim for a seat at that table. i don't view this vote as a vote

on the final passage of the bill. that's not how i looked at the commission report. i view it as we say in the senate as a vote for a motion to proceed, to begin an important budget debate on the floor. after the commission meeting, reporters came up to me and said what's next? well, i'll tell you what's next. what's next is president obama's state of the union address in which i'm sure he will allude to this challenge. what's next is the president's budget which we should receive in february. following that, a budget proposal from the house, one from the senate. a debate on our debt ceiling in america. each of these will create an opportunity for us to take the message of this deficit commission and move forward. some parts of it i will definitely want to change. i don't agree with. other parts i think are essential. let me say a word about social security. there is no more important social program in america, there never has been. it's more important today than it's ever been because people understand that your pension at work may not be around when you

need it, a lot of them have lost it, and people understand that the little nest egg, the savings that you have, may get beaten up by wall street tomorrow. but social security is the bedrock. it's what you count on. we've got to make sure that this program which is destined to be solvent for another 20 years is destined to be solvent for more. this deficit commission has come up with a proposal which will add 75 years of solvency to social security. now, although it's the deficit commission, the social security program has nothing to do directly with the deficit. making it a solvent program isn't going to help solve your deficit, but it's going to give peace of mind not only to those currently receiving social security but a lot of young people who really question whether the program will be there when they need it. i don't agree with all of the proposals that came out of this deficit commission. i would change them. i think some of the benefit cuts don't have to take place, but i

think this deficit commission is on the right track to give people peace of mind that social security is going to be there for a long, long time to come. there are parts of this proposal, this deficit commission proposal which i do not agree with, but i will tell you, getting back to my beginning point -- i see some other senators coming to the floor here -- i would hope that those senators who come to this floor and passionately argue for tax cuts for wealthy americans at this moment in time will acknowledge the obvious. they are piling up deficit debt on america. they are calling for more money to be borrowed from china and other nations, and they are enslaving our children and future generations to paying off that debt before they can enjoy the prosperity most of us have enjoyed in our lives. to ignore that is to ignore the deficit, to ignore the debt, to turn your back on the reality of what extending the tax cuts to the wealthiest people in america

will mean. i hope that we can ask our republican colleagues to take that little trip on the subway over to the dirksen building, go in there and read the deficit commission report before you come to the floor and make a speech that ignores the obvious. cutting tax on the wealthy adds to a debt that our children will have to pay. i believe we need to continue the tax cuts for the time being, for those making $250,000 a year and less. that's needed to get us through this deficit -- pardon me, through this recession, and create more jobs. i hope we can get that done before we leave. so what happened in the deficit commission will be reflected in sound judgment here on the floor of the united states senate. and the last point i will make is this. it is unfair, it is unjust, it is inconsistent with the history of this country for us to cut off unemployment benefits for americans as we did yesterday. cutting off those benefits means

that two million unemployed americans will lose the helping hand they need to feed their families, pay utility bills, buy clothes for the kids in the middle of this holiday season. 127,000 unemployed illinois families will lose their unemployment benefits this week. that $300 weekly check may not sound like much to a senator or a congressman. it may be the difference between making that second trip to the food pantry and keeping the lights on in your home during the holiday season. i urge my colleagues in both political parties, put party aside. think about the reality of this recession and unemployment in america and whatever we do on tax cuts, i insist, i beg that we include unemployment insurance as part of that benefit. mr. president, i yield the floor. a senator: mr. president? the presiding officer: the senator from minnesota. mr. franken: mr. president, i rise to speak about extending tax cuts to all americans on knack up to $250,000.

mr. president, i was presiding this monday when one of my friends on the other side of the aisle was speaking on the floor, and he said with great conviction, and i quote -- "we need to do everything to see that the deficit does not increase." now less than a week later, he will vote to increase the deficit by $700 billion. that's an impressive reversal, don't you think? now, many of my colleagues on the other side ran for re-election this fall saying that the deficit is a cancer, that we owe it to our children and grandchildren to cut the

deficit. well, to them i say congratulations because one of your first votes back, you're going to vote to put over $9,300 more debt on the head of every child in america. way to go. and what is that for? to give an average tax cut of $100,000 to americans making over $1 million a year. now, my friends on this subject have been saying to us haven't you learned the lesson of the -- of the election? hmm. i do not recall permanent tax cuts for millionaires being on any ballot. in fact, let's take a look at the exit polls conducted by edison research, the exclusive provider of the national

election exit polls for all of the major tv networks and the associated press. in their poll, they found that roughly 60% of americans wanted to end tax cuts for income over $250,000. and more recently, a quinnipiac poll said that only 5% of americans wanted the bush tax cuts extended for those for income over $250,000. and, of course, the american people feel this way. they know what's been happening over the last 20 years in this country. according to the economic policy institute, during the past 20 years, 56% of all income growth went to the top 1% of households. even more unbelievably, a third

of all income growth went to just the top .1%. the wealthy have done extremely well for themselves over the past 20 years.unfortunately, the middle class has done decidedly worse. when you adjust for inflation, the median household income actually declined over the last decade. during those years while the rich were getting rich,the rest of working america was struggling to keep up. we've been growing apart. the american people know this. and now working americans are forced to listen to republicans as they demand everyone needs to share the pain. we're all in this together. the i.r.s. publish add study analyzing the tax returns of the

wealthiest 400 americans. want to take a guess at what their average effective tax rate was? just over 16.5%. is that really share the pain? are they really sharing the pain, just like everybody else? now, frankly, i'm a little tired of being lectured by my friends on the other side of the aisle on the deficit. we all know that bill clinton inherited the largest deficit in history from george h.w. bush and then handed george w. bush the largest surplus in history, and then george w. bush nearly doubled the national debt and also handed barack obama the largest deficit in history.

and, of course, my friends controlled the congress for most of those bush years. now, today we're talking about thousand get our economy going and keep deficits down at the same time. whilwhat we're discussing rightw is whether to restore the clinton marginal tax rate on the very wealthiest of americans. now, i remember when we -- when he raised the tax rate on the top 2%. republicans said that would kill the economy. newt gingrich, remember him? on august 5, 1993, he said, "i believe this will lead to a recession next year. this is the democrat machine's recession, and each one of them will be held personally accountable." senator phil gram, remember him?

he said, "the clinton plan is a one-way ticket to recession. this plan does not reduce the deficit, but it raises it and puts people out of work." now governor-elect john kasich said "this plan will not work. if it was to work, then i'd have to become a democrat." hmmm? congratulations, ohio, on electing a democratic governor. 22.7 million jobs and a giant surplus later, george w. bush waltzes into office and says, hey, we're pea running a surplus. the people deserve a tax cut. now, let's recall what he said about his tax cut.

he said, over and over again -- and i quote -- "by far, the vast majority of the help goes to those at the bottom end of the economic ladder." wow, that sounds like the bottom got a vast majority of the tax cuts, doesn't it? they didn't. actually, the bottom 60% of americans got just 14.7% of the bush tax cuts. and the top 1% got 29.5% of the tax cuts, exactly double. let me repeat that. the top 1% got double of what the bottom 60% got. the results of this new policy: massive deficits. only 1 million new jobs over the eight years of the bush presidency, one million compared to 22.7 million during cline continue's eight years.

-- during clinton's eight years. and now my friends in the minority want to go back to that discredited economic policy. the fig leaf here is small business. they attack us and say that not cutting taxes on the richest americans will hurt small businesses. well it seems that to my friends some small businesses are more important than others. why didn't they block us for months on passing the small business jobs act which gave tax cuts to small businesses and created a $30 billion line of credit for small businesses on main street? why did they oppose the "hire" act that gave large tax cuts to small businesses to encourage them to hire unemployed workers? well, it seems that these aren't the small businesses that my friends are so concerned about. when you and i think about small

businesses, we picture the mom and pop grosser down the street -- grocer down the street, mr. president, somewhere in oregon or minnesota, or maybe a hardware store or a small precision manufacturing operation -- we have a lost those in minnesota. we probably think of them as small businesses because they are small. they probably have few imloirks one location, make a -- they probably have few employees, one location, make a living. the republicans have a hard time believing that the hardware stores will shu shirt their doo. only 3% of small businesses would be effected by this change. yet you'll hear republicans tout

that these top 3% of businesses make up 50% of the total small business income. well that tells you one important thing: that those 3% of small businesses aren't really small businesses. only under the broadest, most arbitrary of definitions are these businesses small. when many of my friends on the other side of the aisle talk about small businesses, they're including anybody who uses a flow-through business entity, so an "s" corp. or a partnership. they're not defining a small business by its size or profits or the number of people that he employee. they're defining it on a technicality. under their definition, bechtel -- bechtel, the fifth-largest

company in the united states, is a small business. the coke brothers who run a petroleum company with nearly $100 billion in annual revenues, they are considered a small business. they're worth about $16 billion each. law firm partners and wall street bond traders are considered small businesses. so really republicans are using the mom and pop grocery store to defend the continuation of these tax cuts, but in reality the only people they're really helping are the bechtels and the cokes of the world and maybe derek jeter, inc., and he deserves every dollar gets, and mel gibson, inc., and maybe he's

had a bad year, and other likely "small business" beneficiaries. and at the same time that republicans are demanding unpaid-for tax cuts for the coke brothers, they are anne sissing that we pay for a continuation of the emergency unemployment insurance program. they want to pay for it even though unemployment benefits have been shown to be -- they won't pay for it even though unemployment benefits have been shown to be one of the most effective stimulus measures. why? because when unemployed workers get their checks, they go to their local mom and pop grocery store and buy food. they spend that money right away in their communities in real small businesses. it's the holidays. can they afford to buy a small

christmas present for their kids? i'm worried that there are those among us who would say, no, no presents. so republicans say that these unemployment benefits are too expensive and will add to the deficit. they demand that these unemployment benefits must be paid for. tax cuts for the richest people in america, no need to pay for these. adding $700 billion to the deficit -- or actually $830 billion when you factor in the actual interest payments, well, that's no problem. you know, i hear my friends on the other side say we're going to have to make some hard choices. i agree. the deficit is a problem. getting it under control will take shared sacrifice. there are a lot of minnesotans who have to make hard choices now.

maybe it means giving up a second car, maybe it means no summer camp for the kids, some communities in minnesota have had to go to a four-day school week because there just isn't the money there. some minnesotans have been even harder hit. their unemployment insurance was cut off earlier this week because of us. they've got a lot of hard choices right now. where are they going to live if they can't pay their mortgage or their rent? choices: food or medicine or heat? how do i give my kids anything resembling a christmas? these are people who lost their jobs and desperately want to

find work. but we can't pass unemployment insurance for them unless it's paid for. but for the owners of bechtel or pricewaterhouse coopers, yeah, pricewaterhouse coopers is a small business. well, for them, the sky is the limit. you know, i'm jewish. i -- i don't know the new testament all that well, but i do know matthew. truly i tell you, whatever you did for one of the least of my brethren you did for me. i went to a union hall not long ago, building trades, a carpenter came up to me, big, strong guy, rough hands, big

calloused hands, tears in his eyes. he's gotten just a little bit of work here and there over the last 18 months. he said to me, i never took unemployment insurance before. i hate it. but if it weren't for unemployment insurance, i wouldn't -- i wouldn't be in my house. making tough choices means doing one thing and not enough f another. and right now we are faced with that choice. if we can't agree to help people like that carpenter and his family by continuing emergency unemployment benefits, how can we live with ourselves?

how can we think that we're doing our jobs? the choice before us is clear this holiday season: lend a hand to those who simply can't get by without the help. or give $100,000 in average tax cuts to people making over $1 million. where are our values? what are we doing here? it's almost christmas. we'll be leaving here to go spend time with our families. we've got jobs. we've got great jobs. i think this is the greatest job trying to make people's lives