great sovereign power of taxation. it is especially true in this harsh economic debate. on april 19, 1774, sir edmund burke tried to persuade the british parliament to repeal the last of several controversial colonial taxes. his wisdom was instructive for today's vote. i quote -- -- and remember, ths sir edmund burke arguing for the colonists in america. quote -- "could anything be a subject to more just alarm of america than to see you go out of the plain highroad of finance and give up your most certain revenues and your clearest interests merely for the sake of insulting your colonies." burke's point was the parliament was acting unwising by maintaining a tea tax primarily despitprimarilyto spite the col. four years from day, we will

support tax day 2011. it will impose a punitive tax hike on virtually every american taxpayer. that day of reckoning has been clear since my friends took power almost four years ago in both houses of congress. my friends on the other side, with all due respect, your actions this morning amount to meddling. you possess part of the sovereign power to change the tax law to prevent this tax increase. instead you have forced this body into a political showdown. the proponents of the so-called millionaires tax say the reason to do is -- quote -- "fiscal discipline." this proposal preserves less than half of the revenue of the related provisions in the reid-baucus substitute. if that's the case and revenue is the goal of the proponents of the millionaires tax, they ought to stick with the reid-baucus substitute. but let's set aside the moment the fact that the revenue raised is a fraction that the broader tax hike on the reid-baucus substitute.

does anyone take seriously the -- that the revenue raised will go to deficit reduction? does anybody really believe that? you know they're going to spend every dime of it if there were any revenues. where is the mechanism in the amendment to assure taxpayers of that? more importantly what is the record of my friends on the other side on this point? you need to only look at the fine print. in the revenue and spending of the president's budget. as an aside the president's budget is the most transparent presentation of the fiscal features of the agenda of my friend on the other side. hiking marginal tax rates on singles making more than $200,000 and on families making over $250,000 translate to about .6% of 1% of gross domestic product, g.d.p., per year over 10 years. the new above baseline spending initiatives in the president's budget translate to .7500 of 1%

of g.d.p. per year over 10 years. what does that mean? the revenue raised by the tax hike in the reid-baucus substitute is less than the new spending in the president's budget. it doesn't take a rocket scientist to figure this out. and as i've stated earlier the revenue raised from my friend from new york he's amendment is less than half of the reid-baucus substitute. does anybody really believe that lesser amount of revenue is less likely to be spent? so much for the fiscal discipline argument. there's some very disturbing points to ponder in this so-called millionaires tax. i'm going to alert my friends on the other side to them. the first point is that capital is the lifeblood of business. put more capital into business and it will respond. the business will gain economic energy. curtail the flow of capital to a business and it will -- and it will respond. the business will lose economic

energy. and that's what's happening in america. according to the latest internal revenue service statistics of inkol data a lot of capital gain income is earned by the taxpayers targeted by senator schumer's amendment. s.o.i., in other words, statistics of income data, states that 56.6% of the net long-term capital gain from traditional capital assets is reported by taxpayers with $1 million or more dollars in income. more importantly if capital gains from transactions involving partnerships and other flow-through entities are a concern, that percentage rises to 64.7%. there can be little doubt that we are talking about a large pool of capital. if my friends on the other side were to prevail it would a game changer for the tax treatment of a large pool of capital of in -- of income from capital. the change in the capital gain

would surely be a negative one. i have chart that illustrates the change in the playing field for capital transactions. it shows where we are today. that's 15% capital gains rate. if my friends on the other side are successful in a little over 27 days from now the marginal rate will rise to 20%. the health care reform bill has banked in another 3.9% rate hike and that kicks in a little over two years from now and that's this one right here, 23.9%. what does this chart show? it shows that the marginal rate on nearly two-thirds of taxable long-term capital gains transactions could be affected. it means investors who supply that capital, lifeblood of business, will see the marginal tax rate on capital gains rise by nearly 60% in a little over two years. everything else being equal, a

rise in the marginal tax rate means a decline in the after-tax rate of return. the nonpartisan joint committee on taxation always cautions us about this effect in their revenue estimates. here's what joint tax says and i quote -- "we anticipate that taxpayers would respond to the increased marginal rate by utilizing tax planning and tax avoid ant strategies that will decrease the amount of income subject to taxation." unquote. my gosh, what more do you need to understand economics? capital is the lifeblood of business. raise the marginal rate on capital gains transactions, the result will be a decrease in the after-tax rate of return on capital investments. what will happen? capital will go out of taxable activities in many cases. capital, the lifeblood of business, will be constricted. with capital constricted, does anybody see business activity

affected in any way that is positive? it would be hard to imagine that outcome. when most folks hear about a so-called millionaires tax, they probably think it would have minimal impact on the business environment. that they -- the data i discussed shows the op sivment it also shows that any revenue raised will likely be spent. anybody who believes that by raising revenues, that we're going to pay off the national debt hasn't live in this country for the last 34 years that i've been in the senate. our friends on the other side will always spend that money. that's how they keep themselves in power. does it make sense to send a tax policy signal to investors to move their capital out of taxable business activity? in the worst economic environment in many years, now 9.8% unemployment, shouldn't we be going in the opposite

direction? instead of finding way to kill jobs when our unemployment rate continues to stagnate at 10%, let's find a bipartisan solution protect all americans, especially our job creators, from crushing tax hikes. it's time to put a stop to this nonsensical political theater and get down to the people's business. just one last thought. over the last summer president obama said, and i would -- quote -- "the last -- this is president obama now, and he said it just over the last summer -- quote -- "the last thing you want to do is to raise taxes in the middle of a recession because that would just suck up, take more demand out of the economy and put businesses in a further hole." unquote. i think the president was right. and i think the economists think it was right in making that statement. and it should be the last thing we do is raising taxes in the middle of this downturn that now

is even more down because the 9.8% unemployment rate. and, really, that only tells part of the story. if you really talk about the underemployment rate, those who don't have jobs, can't find jobs, et cetera, are dependent on the federal government and those who have stopped looking for jobs, and there are a lot of people like that, you're talking 18% or better. we've got to wise up here. what -- the last thing on earth we need to do is increase taxes at this late date. mr. president, this is an important debate, but the democrats have had four years to change this where they controlled the houses of congress and in the last two years not only controlled both houses and the presidency, and now at this last minute to come in and say we've got to do something, it just shows a lack of -- well, you name it. i won't name it. i yield the floor. a senator: mr. president? the presiding officer: the senator from south dakota. mr. thune: mr. president, i think the american people when

they spoke at the election this year basically were saying one thing, and that is we want to keep the main thing the main thing and the american people the main thing is getting the economy growing again and creating jobs. now, almost everything that has been done here in congress in the last couple of years has been the exact opposite of that. because you've seen policies put in place that increase the cost of doing business in this country and make it more difficult for small businesses to create jobs. and so here we are today debating what evidently has become the democrat economic theory which is raise taxes to create jobs. now, we've seen it in play throughout the last year -- the last couple of years. the cap-and-trade bill was a tax on energy. it didn't get through the senate here because we were prepared to stop it, but it passed in the house of representatives, was headed here. the health care bill raised

taxes on medical device manufacturers, and drug companies, and health insurance plans, all of which is going to get passed on to small businesses in the form of higher insurance premiums. here we are debating a frontal, direct tax increase on small businesses. it is the most astounding theory about how to create jobs that i have ever seen. raise taxes to create jobs. that hasn't worked. it hasn't worked in practice. the senator from iowa i think eloquently pointed out historically if you go back in the past half century, not only does it not create jobs, it doesn't create additional revenue. as he pointed out, when you raise taxes, you don't get more revenue. when you lower taxes, you the get not less revenue, you get more. why? because it affects the behavior of the american people. it affects investors, it affects allocation of capital, it affects people across this country when they know that their tax rates are going to be

low. and so this, to me, seems to be completely off the track and off the point that the american people want us to focus on, which is keeping the main thing the main thing. how can we expand the economy? how can we create jobs? we do that by keeping taxes low on small businesses which, by the way, create two-thirds of the jobs in our economy. now what will be the impact of the proposal that we will vote on today in terms of small businesses and their ability to create jobs? according to the joint tax committee, half of small business income would be subject to higher taxes. now, that translates int into $750 -- 750,000 small businesses that would be faced with higher taxes. and that incidentally impacts about 25% of the workforce in this country. how does that translate in real terms? when these taxes go up on january 1st, for people who make more than $250,000 a year,

who are going to be paying probably the 33% or the 35% marginal income tax rate today, their taxes are going to go up to 36% or 39.5%. now, if they're a family of four and they've got personal exemptions, those phase out, there's a cap on the number of itemized deductions kick it, their marginal tax rate increase could go up to 41%. if you're a small business today paying at the 33% rate and you end up paying 41% as a result of this increase -- this tax increase that's going to take effect on january 1, you're looking at roughly a 25% increase on your income. now, that's obviously going to increase the cost of doing business. when you increase the cost of doing business, it makes it that much harder for small businesses to invest, to make that new capital investment, to buy that new piece of equipment or to hire that additional person or

hopefully additional people in the workplace. and so all we are simply doing here is trying to implement a failed policy that hasn't worked in the past and isn't going to work in the future. and it doesn't have to be -- you've got all the science, history and facts to support this and it is counterintuitive of the american people. how many people think that the way to create jobs is to increase the cost of doing business in this country? when small businesses create two-thirds of the jobs in our economy, it is absolutely fundamental that you don't increase their cost of doing business, you don't raise taxes if your ultimate goal, if the main thing is to create jobs. now, the best thing that we can do for the high unemployment numbs and for the debate -- numbers and the the debate we're having for unemployment benefits being extended is to get people back to work. this is the exact opposite way of going about that. this is just -- it's completely

counterintuitive. raising taxes to create jobs. as it failed economic theory and it failed in practice. now, i think if the democrats' tax hike goes into effect -- and make no mistake about it, i mean, i hear the other side talking about tax breaks and tax cuts. these aren't tax breaks or tax cuts. taxes are going up january 1, pure and simple. that's -- that's all there is to it. taxes are going up. they're going up on income, they're going up on capital gains, they're going up on dividends, they're going up on estates. if action isn't taken here by congress, we are going to see the largest tax increase in american history. and the other side says well, let's cushion it, let's just limit it to those making more than $250,000. of course, that affects a lot of l.l.c.'s, a lot of partnerships, a lot of subchapter s corporations whose income flows through to their individual income tax return and who are going to be faced with the higher income tax rates, not to mention the higher capital gains rates and the higher dividend

rates. the very people that we're asking to pull us out of this recession and create jobs. and so where does that leave us? well, we're going to have an alternative. the alternative would that be we just extend the tax relief, not raise taxes, not increase the costs of doing business, allow our small businesses to prosper and to grow and to flourish and to create more jobs for the american people so that we can get that 9.8% unemployment rate down and reduce the amount of unemployment benefits that we have to come back periodically here and approve. 9.8% unemployment. we were told a year and a half ago or a little over that, almost two years ago, when the stimulus bill was being debated, that if we just passed a trillion-dollar stimulus bill, that we could keep unemployment under 8%. that didn't work. obviously, we borrowed a trillion dollars to do that from our children and grandchildren, and what do we have to show for it? we've got a 9.8% unemployment rate today. and no apparent prospect for the economy to pull out of this

sluggishness that we're in. the best way to accomplish that, the best way to make that happ happen, in my view, mr. president, and i think the views of the american people -- and i speak as one individual who's under the $250,000 threshold -- that i understand, as i think most americans do, that the people who create jobs in this country are the people who make more than $250,000. and i hope that they continue to do well, because the small businesses, when they can increase their top-line sales and revenues and increase their bottom-line profits, are going to be in a better position to create jobs. i get that. and i think the american people get that. which is why they so consistently, and particularly the best poll that was taken was the election day poll, where they came out in big numbers to voice their disapproval of the policies here in washington, d.c., that continue to kill jobs. so i think we ought to be looking at what we can do not to kill jobs but to create jobs, what we can be doing to incentivize small businesses to create jobs, not putting more burdens on them and increasing the cost of doing business in

this country. there isn't anything that, in my view, that's happened in this last year, if you're -- if you're concerned about creating jobs, that has been conducive to that. now, there were a group -- there was a group of c.e.o.'s that was pulled in to visit with the president here sometime last summer, and when the president posed the question of them, mr. president, why -- or, why are you as c.e.o.'s, why are your corporations, rather, why are you not creating jobs? and i'll paraphrase this, but i think the answer very simply was, mr. president, it's your agenda. and that's the problem. we've got an agenda here that is killing jobs because it's increasing the cost of doing business in this country. it's a very simple proposition. i don't think it takes a lot to get it, and that's why i think so many people are beginning to realize that either of these proposals, the baucus proposal or the schumer proposal, are the wrong way in which to approach an economic downturn in this country and the wrong way to get that economy back on track and get people back to work. and the latest i think example that was today in the "new york

times" and i quote, "in the latest sign of how this tax issue continues to wrang he will and divide democrats, white house officials said the administration opposes raising the income threshold to $1 million." so we've got the $250,000 vote that's going to occur, the million-dollar vote that's going to occur, but the other thing i want to point out, is even under the schumer bill, which is the million-dollar threshold, according to the joint tax committee, that still impacts 350,000 small businesses in this country who -- whose income flows through to their individual tax returns. so it's a question of who you want to raise taxes on, 750,000 small businesses with the baucus amendment or 350,000 small businesses with the schumer amendment? and obviously, one's better clearly than the other. but the point very simply is this -- the economic theory that we're debating here today about raise taxes to create jobs is the wrong one. it's been proven wrong historically. it's counterintuitive to anything anybody who knows

anything about economics, which is why 60% of all the prominent economists in this country, as was quoted by the senator from iowa earlier today, have come out and said the best way to create jobs and grow and expand the economy is to extend these tax provisions come -- that are going to expire on january 1. that's what this debate's about, mr. president. i hope that we will keep the main thing -- the minimum thing for the american people -- the main thing for the american people, and not get distracted on all these other things. the presiding officer: the senator's time has expired. a senatormr. thune: with that, mr. president, i urge my colleagues to defeat both of these amendments. and i yield the floor. the presiding officer: who yields time? the senator from montana. mr. baucus: mr. president, i yield ten minutes to the senator from vermont. the presiding officer: the senator from vermont. mr. sanders: thank you. mr. president, what this debate

is about is whether or not we continue to take money from the middle class and working families of this country who are struggling in a way that they have not struggled since the great depression, force their kids to borrow huge sums of money in order to provide $700 billion over a ten-year period to the wealthiest people in this country. mr. president, i hear my republican friends time and time again coming down to the floor of the senate, and they say, we have a huge deficit. we have a huge national debt. and today, what they want to do is to drive that national debt

up by $700 billion over the next ten years in order to give huge tax breaks to millionaires and billionaires. so, please, my friends, say what you want, but stop talking about the deficit and the national debt when what you're doing today is driving that debt up by $700 billion over the next ten years. and, second of all, what everybody in america knows is that what's going on in our country today is that the middle class is collapsing, poverty is increasing, but the people on top are doing phenomenally well. in the last 25 years, 80% of all new income created in this country went to the top 1%.

you don't have to worry about the top 1%, the millionaires and the billionaires in this country are doing just fine. they don't need a huge tax increase. today in america, we have the most unequal distribution of income and wealth that we have had in this country since before the great depression. isn't it enough for you that the top 1% now earns 23.5% of all income? isn't it enough for you that the top 1% earns more income than the bottom 50%? isn't it enough for you that in the last 25 years, almost all new income has gone to the top 1%? do you really think that the c.e.o.'s on wall street who makes hundreds of millions of dollars a year really need a tax break?

do you really think so? i don't think most of the american people think that our kids and grandchildren have got to see their taxes go up in order to provide tax breaks for the richest people in this country. and thirdly, mr. president, what i would say without the slightest doubt is if these guys are successful in giving $700 million nor tax breaks to millionaires -- more in tax breaks to millionaires and billionaires, the next thing they'll do is run down on the floor and they'll say, "oh, my word, the deficit and the debt are going up. we've got to cut social security because we have such a large debt." yeah, we've raise the debt by $700 billion. now we've got to cut social security. we can't afford to extend unemployment compensation. we just can't do it. millions of workers out there today, as we get to the holiday season, are worried about how they're going to take care of

their families, how they're going to maintain the minimum level of economic security. we can't afford to extend unemployment security but we can afford to give billions and billions of dollars in tax relief to the top 1%. so, mr. president, i think this is a very easy vote. and the vote is to say okay, let's give tax relief, let's extend the tax cuts to 98%, many of whom are struggling. but let us not give tax breaks today to the millionaires and billionaires of this country who in many ways have never had it so good. thank you, mr. president. i yield the floor. mr. kyl: mr. president? the presiding officer: the senator from arizona. mr. kyl: thank you, mr. president. i think what we've just heard illustrates why it's been so hard for us to reach a bipartisan agreement on how to resolve the tax issues that all

americans face in just four short weeks. but last tuesday, a group of us went down to the white house to visit with the president, the vice president, some of his folks in a spirit of cooperati cooperation, i must say, and a spirit in which the president reached out to us and said all right, the elections are over, my party didn't do so well but it's time now for to us get together, work together, and the first piece of business we have to resolve is this tax issue. we have to figure out how we're going to fund the government for the remaining ten months of the fiscal year and we have to figure out how we're going to prevent americans from getting a big tax increase come january 1. and what i'd like for you-all to do, talking both to democratic and republican leaders in the house and senate, is to sit down and try to negotiate this in a bipartisan spirit that really would give credit to the congress and give the american people some confidence that they can move forward with some degree of clarity about what their tax obligations are going to be. we agreed and he asked us if we

would be willing to sit down literally immediately to begin these discussions. we said yes. he named two of his chief spokesmen, the treasury secretary tim geithner and jack lou, the head of o.m.b., to discuss those issues on behalf of the administration. and each of the four leaders in the house and senate named someone to join the discussions as well. leader mcconnell asked me to do that on behalf of senate republicans. we immediately scheduled a meeting and we got together to discuss the parameters of how we should move forward, and it was a very productive discussion. but it also became apparent, and it became apparent the second time we met, that actually there weren't going to be any bipartisan negotiations to reach a decision until there had been a political catharsis on the democratic side. and so let me respond tbreefl comments by th --respond briefly the majority leader this

morning, who seemed to lay at the feet republicans delay in getting this tax issue resolved, when, in fact, it's been due to the fact that house and senate democrats have had to demonstrate to many of the people in their political base that they can't accomplish what their base would like them to accomplish and, therefore, ultimately they'll have to negotiate something with us. i understand sometimes that you -- you need to go through a process whereby it makes it easier for you to make concessions. and i suspect that's part of what this is all about. and i certainly don't denigrate the motives of any of my colleagues, because this is hard and they're getting a lot of pressure from people in their political base about not giving in to the republicans and so on. but the president asked us to discuss this in a bipartisan way and republicans have been willing to do that. but, first of all, speaker pelosi scheduled a vote in the house that was the democratic position, to allow taxes to be

increased on hundreds of thousands of small businesses and others in this country. that vote was finally held, and i might add that 20 democrats left the fold and joined republicans in saying no, that's not the way to reach a consensus here. and then the senate democrats decided to schedule the same vote and one more vote to try to accomplish the same purpose. because of the lateness of the time in which that was done, the cloture didn't ripen until this morning rption which is why we're here this morning getting ready to cast these two votes. but i just to want make it clear that i have a disagreement with the majority leader if he's suggesting it's somehow republicans who have delayed these negotiations. the fact, is we've had three meetings and i've sat there and we've been very congenial with each other but it's been very clear that we're not going to be negotiating anything until all of this political process is over with. until the partisan votes have been cast.

and then, and only then, will people sit down to seriously negotiate how we're going to resolve the issue. the problem is, of course, there's very little time before christmas. the president has some other things on his agenda, as does the p.m. themajority leader. i now understand we're going to have to schedule time next week for an impeachment trial, for example, that could take about a day and a half. the president would like to see the start treaty brought up in the senate and resolved before christmas. there are other things that have to be done. i just want to make it clear that it's not republicans' fault that these things are taking time and we still don't have the tax issue he resolved. we've been in the lame-duck section two weeks and we -- session for two weeks. the senate has passed a food safety bill which turns out to be unconstitutional. two weeks of lame-duck session and essentially nothing accomplished. our democratic colleagues have been caucus for hours -- hours trying to figure out what to do

while republicans are yesterdayy to -- are ready to negotiate, ready to act. but until this political ka -- s finally run its course, there appears there will be no more negotiation. now, i'm assuming that next time the negotiators get together, i hope it will be monday morning whenever we can get together, that we will then be able to actually sit down and work through the process so that we can extend the policies, the tax policies that have been in place for the last decade so that no americans will have their taxes increased, so businesses will have certainty, that families will have certainty about what their tax obligations will be going into the next year. if that process can begin quickly, i think that we can reach a bipartisan agreement that would make the american people proud and would demonstrate that we can actually come together on an important issue like this for the -- on

behalf of the american people. let there be no mistake, the votes taken in the house of representatives and will be taken here are not because republicans wanted to take these votes. these are votes that the democrats believed were necessary to demonstrate, essentially, that they can't get the support they need to do what they would prefer to do, therefore, enabling them to sit down and talk to republicans. those are the facts. we understand that this takes time. i just don't want to be blamed for taking the time when it's, in fact, not the republicans' fault that negotiations have not been completed. the presiding officer: the senator from alaska. mr. begich: mr. president, thank you very much. as you know i was presiding this morning. i wasn't scheduled to speak, but this time i decided to inform my staff prior to speaking so they would not be surprised. with all due respect to the senator from arizona, let's not cast shadows on either side.

you can't blame one side or the other for delay. i can argue that the food safety bill took too long because of three filibusters from the other side. we're here. i'm new to the whole process the last two years and i've been patient about the issues we face and talk about. but this one is a fundamental issue. it's not the question of how long we extend these tax benefits for the middle class, it's who gets them, the middle class or the wealthy, the millionaires and billionaires? i heard my good friend who sponsored a piece of legislation that passed from south dakota to talk about the small business people, that they'll be affected. well, i'm going to give you some data points. because it's one thing to have opinions. it's one thing to have facts. let's just focus on the facts. the bottom line is businesses in this country -- and i can speak as a small business person. i think the only one, if not probably pretty darned close, the only one who has small businesses in this -- in this

chamber, my wife has four retail businesses. she started her businesses selling smoked salmon at the back of a vending cart. today she employs -- has 30-some employees. who are these people, this small business community that i hear from the other side they talk about? i have no clue most of them have been in it or not, but i have. who are these people? these are people we get our dry cleaning from or we go to the convenience store or the pizza parlor, or wherever it might be, these are the small businesses we're talking about. the small business community of this country who make one million -- $1 million gross, that's not their taxable income, gross, $1 million and under, which probably their net income is well below $200,000, the taxable income is 95% of the businesses of this country. i like the $250,000 and under

proposal, i also like the compromise, the compromise that senator schumer brought forward, a million and under. because it catches 95% plus of the small businesses in this country. when you hear and i continue to hear on the other side that we're going to have an impact on the small business community, you're not. if you support the efforts of helping the middle class and you support the efforts of helping small business, businesses that gross a million dollars -- $1 million an under. for those who don't know the difference between gross and net. net is the profit, gross is what they sell the product for, not what they get taxed on. don't confuse the numbers and confuse the american people. it is 95-plus percent of the businesses will enjoy the tax relief break. don't be confused by some of the numbers thrown around on the other side or their one-liners. i'm going to tell you from an

alaskan, when i thron the constituency, when i get the phone calls, e-mails, the thousand-plus letters and e-mails i get every single week, what do they want? they want to be sure that the small business community -- in our state 56% of the employment is generated by small business. small businesses that every day are making a difference. those are the folks we're focused on. it's a question of not how long these extensions are or how long these breaks are, it's who gets them. is it the millionaire, billionaire club or who people on the other side complain that we're here on a saturday. you know what? there are a lot of alaskans, a lot of americans, a lot of folks from colorado, mr. president, who are working today. they're working on saturday. working on sunday. working one or two or three jobs. so, first i'd say to my colleagues we're here to have a debate. some might want to call it

political. welcome to politics where 100 people get elected to a political process. this is what i came for, to debate and discuss what is important to the american people, important to alaskans. yesterday the "wall street journal", as well as "the washington post," which some may consider a liberal newspaper, just read their headlines. we can talk about what's making the economy move. what's making the economy move is consumer confidence. not millionaire an billionaire confidence. i can tell you that. they have $2 billion stuffed in a bank account -- my friend from iowa, we have done work together, he's right $2 trillion stuffed away with the millionaires and billionaires. but the people who are expending the resources and buying this economy are people who are the middle class, the working people of this country. so it's a question of who do we support? who are we going to help? and we do have this huge

deficit. we have to make some decisions sooner or later here and today is one of those decisions. we're going to make a decision, hopefully, that millionaires and billionaires, we're not going to fund your tax bonus, your tax giveaway from the taxpayers on the backs of the future. but we are going to help the small business community. we are going to help the middle class. when you look at the numbers, cybermoney, somebody may not know what this is. i do because we're in the retail business in our family. first there's black friday, and then vibe are monday. cybermonday alone raked in a historic -- a histori historic $1 billion. no disrespect to the millionaires and billion nation they're not on cybermonday. every day americans are, every day alaskans are. double-digit -- double-tijt increases to the automobile

industry. -- double-digit increases to the automobile industry. we helped out to help them survive, now they're having double-digit details. existing home sales, which is critical to the industry, frc the real estate industry, i know this, 10.4% increase in october. that's not millionaires and billionaires buying those homes. these are working alaskans, working americans spending their money because they believe in the future. here we are about to have this political debate and there's a lot of swapping and trading going on and who knows what will happen next week on other legislation. to be frank with you, this is not the way it should operate. it should be voted on the merits. the merits of the 95-plus% that will benefit. the 98% of the middle class that will benefit, that's who we should be talking about.

when you look at the data points in regards to the consumer confidence we're in now, the third running of -- the third month of running increased consumer confidence. 30 retail chains talk about their record increases in sales. again, i -- you know, the people who are shopping at these places, people like myself, my family, my brothers and sisters, many alaskans, that's what this is about. it's not a question about how long to extend these things. it's who will benefit from the right public policy discussion and decisions? small business folks benefit. and, you know, i understand the other side doesn't like th the $250,000 and under, so a lot of us on this side, moderates, said why not try something a little different. let's up it a little bit. let's get to the million dollar threshold because it covers basically everybody except for the millionaire and billionaire club.

that's reasonable. i have yet to see a compromise from the other side. that's what the election told us. it wasn't one side won, one side lost. what people in alaska are telling me every day, get busy, solve problems, compromise, and move forward. the compromise should not be on how long these go, but who benefits? so in my view, again, i'm going to support both of these. i think the compromise on the million dollars and under, so the argument i hear from the other side and i will tell you this from the other side, i'm a small business person, i know who these people are. so when you talk about it and talk about an economist says this or that, i worked in it, i lived it, i see it. so i understand what they're asking me to do. and going up to that compromise is the right decision in the long term. so i'd encourage my friends that we can reach a compromise here and get to help our small business community, middle class, and put money to reduce

the deficit. to reduce the deaf the sit. -- the deficit. help our economy, reduce the deficit. i'd say that's a pretty good deal and that's what the taxpayers told us and the voters told us in this last election. to my friends on the other side, we're reaching out. they may not like the $250,000. but the million dollar and under is a step in a -- and a positive step to help our communities. and, again, why would we give millionaires and billionaire billionaires $300 billion in another bonus? it makes no sense to me. they're not the ones driving the economy. despite what my friends on the other side might say. it is the people in the small business community. it is the people who work every single day. who are working today while we deliberate this issue. who will be working tonight and tomorrow and monday. for us to sit around and say let's wait until monday to have a compromise, today is the day. right now. this is what we're doing. mr. president, i yield the

floor. the presiding officer: the senator from montana. mr. baucus: i yield 10 minutes to the senator from oregon. the presiding officer: the senator from oregon. mr. wyden a senator: mr. president? the presiding officer: the senator from oregon. mr. merkley: mr. president, i rise to contrast the democrat plan, plan a, and the republican

plan, plan b, and what they mean for the working citizens of the united states of america. let me start by talking about the democratic plan, plan a. it's plan a because it's america's plan. now, why is it america's plan? first, it benefits every single taxpayer in america. that's the first reason. now, some of my colleagues across the aisle have liked to talk about how the democratic plan only helps those who earn under $250,000. but that's because they're not paying attention or they're deliberately distorting the tracts. because the democratic -- facts. because the democratic plan provides a tax break on the first $250,000 no matter what you make. so it helps every single american. the second is reason it's

focused on citizens earning less than $250,000 is because it's the working citizens of the united states of america that have been getting the short end of the stick. the amount of money -- the average income for workers in america plateaued in 1974. that happens to be the year that i graduated from high school. earlier this year, i had the pleasure of taking my son to his first day of high school, the same high school i went to, exactly 40 years later. so for almost 40 years, the working wages for working americans have been flat. but during that time period, the wealth of this country has increased enormously. the productivity of the american worker has increased enormously. and up until the mid-1970's, when the productivity increased, the wages of working american always increased.

they shared in the productivity of our economy because they were the driving factor in our economy. unfortunately, for the last 3 1/2 to 4 decades, that has not been the case. and then along comes the great bush recession. this recession, caused by the deregulation of retail mortgages, allowing predatory mortgages, allowing kickbacks for mortgage originators to create predatory mortgages when folks qualified for prime mortgages, and then the deregulation of wall street so those could be packaged into securities with a two-year ticking time bomb because they had these teaser rates on the mortgages. and when the interest rates went from 4 1/2% to 9% or 10%, not only did the mortgages blow up but the securities based on them blew up and we blew up the whole entire economy. so thank you, very much, friends across the aisle, for attacking the most important financial

instrument to american families, the american mortgage, distorting it, allowing predatory mortgages, allowing predatory securities, blowing up this economy and attacking the american family. i can't tell you how many millions of american families are suffering because of the policies that you-all implemented over the last deca decade. and what is the result? the american family's home has lost value, tremendous amount of value, families underwater. what is the result? huge unemployment caused by this meltdown in the great bush recession. retirement savings decimated. folks who think they could have retired maybe now, maybe in two years, maybe in five years, realizing they may have to work as long as they're able to work, as long as they're able to keep a job. their dreams are blown up. thanks to these bush policies. well, there is a third reason that the democratic plan is the american plan and that's because

four out of five americans support it. 79%, or roughly 80%, four out of five americans support tax breaks for families earning less than $250,000. extending those tax breaks. so that's plan a, america's plan. because it helps all americans, because it's focused on the american worker, who has been hit so hard by the great bush recession, and because four out of five americans support it and understand that we need it. but now let's turn to the republican plan, plan b. plan b consists -- go ahead and we'll switch to the next one here. plan b consists of bonus breaks for billionaires. millionaires and billionaires. now, why bonus?

because every person helped under the republican plan who earns a million dollars or a billion dollars has already been helped under the democratic plan. but my colleagues across the aisle, they want extra for the wealthiest, most successful americans. now, i respect tremendously the entrepreneurs who have been so successful, but there is a time when we have to ask, are bonuses to those best off the best strategy for america to go forward? now, this is quite a tongue twister. bonus breaks for billionaires. and it gets even worse. these are an extension of the bush breaks. and because my colleagues across the aisle are trying to sell it as a job creator -- an issue we'll get to in a minute -- they're bogus. so we've got the bogus bonus bush breaks for billionaires. that's the republican "b" plan that they are saying they will

obstruct any issue on the floor of the u.s. senate so they can get these bonus breaks for their best friends earning millions and billions. well, i'll tell ya, these are expensive. let's ask ourselves, how much is the average value of the republican bonus break? well, $100,000 per taxpayer, that's how much. now, if you take the $700 billion that the republican plan creates in more deficit and more debt, you take that $700 billion and you divide it by the number of citizens, men, women and child in america, 300 million, that's $2,300 for every man, woman and child in america. so when my colleagues across the aisle are proposing taking

$2,300 out of every child's and adult's pocket in america to give breaks, $100,000 breaks to millionaires and billionaires. so let's look at the total cost of this. total cost -- $700 billion before you add on interest. let's add on interest. it's almost a trillion dollars. now, that is a huge increase in our deficit. so it is deficit busting, debt adding, financed by china, and placed on to our children. is that really what the excited republican team coming fresh out of an election is going to say is their top priority in america, is taking $2,300 from every man, woman and child in america so they can give $100,000 tax break to millionaires and billionaires?

well, they have a way of trying to camouflage this. and that camouflage is to talk about jobs. so let's talk about jobs. let's look at the republican plan in terms of job creation. well, c.b.o. ranked the republican plan against many other plans, and where does it come in? dead last. now, i have here the detailed chart from the congressional budget office, and up here at the very top is the democratic plan. and that's to provide assistance to the unemployed. and down here at the very bottom is the republican plan, which is bonus breaks for millionaires and billionaires. let me tell you just how different these are. increasing aid to the unemployment is estimated to create 8 to 19 jobs for every

million dollars in expenditure. 8 to 19 jobs. now, how many jobs are created by the republican plan? one to three. one to three jobs. so the democrats are saying, let's take the dead-last plan in job creation, the republican plan, and let's replace it with the best plan, the democratic plan. republican plan, one to three jobs per million dollars. one to three for a million dollars. the democratic plan, 8 to 19. well, my good friend from south dakota was out here and saying, it's just all common sense. yes, it is common sense. you take the plan that's the worst for job creation and you replace it with the plan that's best for job creation. well, friends across america,

this is about jobs. and the word "jobs" will come out of the rhetoric on the opposite side of the aisle with every speech. but it's bogus. their plan, dead last. democratic plan, top of the li list. check the c.b.o. study. it hurts to haar folks wh hear e out of touch -- the presiding officer: the senator has spoke h spoken for n minutes. mr. merkley: thank you. i ask to yield for 30 seconds. it hurts to hear folks -- mr. baucus: mr. president, might i ask my good friend how much more time he seeks? mr. merkley: one minute would be fine. mr. baucus: one minute to the senator from oregon, please. the presiding officer: without objection. mr. merkley: i thank my friend from montana. it's summarized like this. we have american families that are hurting, they've lost their joz their retirement savings, the value of their house.

let's have the plan that's best for creating jobs, not the plan that's worst for creating jobs. thank you very much, mr. president. i yield the floor. mr. graham: thank you. the presiding officer: the senator from south carolina. mr. graham: am i allocated ten minutes, i think? okay. can you let me know when i'm at nine minutes. i don't want to go over. the presiding officer: the senator will be allowed. mr. graham: thank you. thank you for allowing me to speak. senator grassley, senator baucus, i appreciate this. i guess the first observation i would make is that we're here on a saturday morning and this is democracy in many ways i think at its best. people understand the two votes are going to fail but it's good for americans to have genuine differences to be able to discuss what makes us tick, why we want to go one way versus the other. so the fact that america is divided on a lot of big issues is -- is just the result of living in a free country. now, what was the lessons of the

last election? they are what you would like them to be but here's my observation, for what it's worth. our democratic friends really took a beating. as republicans, we have been there. in 2006 and 2008, we took a beating. 2006, the iraq war was going very badly and americans were very frustrated. president bush's popularity plummeted. in 2008, we had an economic meltdown that i thought was related to housing, that we lent money to people who couldn't afford to pay their mortgages, the mortgages were repackaged and sold as all kind of exotic instruments throughout the world and it brought the whole world economy down. and we've been trying to struggle ever since. we can talk about how much fannie mae and freddie mac were the cause of this problem, how much loose practices when it came to lending, but i think most people understand that our economic crisis was created by the -- the mortgage -- the housing market being

overextended and people getting into that market in exotic ways without a whole lot of regulation. now, here we are a couple years later. i think the last election was a message to our democratic friends, for the last two years, you've been going down the wrong road. the health care bill, which about 80% of americans, if it ever becomes law, will become -- will be under government-controlled health care, was an overreach. the stimulus package was $780 billion-something that wass never done what it was billed to do. the democratic party has been engaged in what is way above what every american charged them to do. this election was not pro-republicans but to our democratic colleagues, stop. and the way you get stopped around here is you get replaced. so the house had a dramatic election. we picked up seats in the senate and some of us thought maybe we could have picked up two or three more and made some pretty poor choices when it came to the

candidates. but that's now behind us. and what i would like to tell my colleagues, that when i look at america, i don't see an undertaxed nation. i think our tax code is far too complicated. 35% is the rate now. how much is enough? is it 39.6%? is that the difference between, you know, a -- a social justice country and -- and a land of the rich? i mean, if -- are we going to increase taxes for the upper incomes by 10% when we can't create enough jobs for americans who are unemployed? i do believe this idea that upper-income americans are the ones who create most jobs for the middle class and people looking for work. that's just a fact. here's how our tax code works today. 40% of americans pay no federal income tax. so 40% of us really don't pay any income tax at all. of those who do, 50% of those who pay federal income tax pay 3%.

the other 50% pays 97%. the top 10% of wage earners in this country pays 70% of the taxes. now, i'm for a progressive tax system but that's just not right. that seems to me to be taking the country in the wrong direction. there's 750,000 small businesses will get a tax increase if we do not extend the bush tax cuts for everybody. i'll make a prediction. there's a lot of unsolved mysteries in this world, a lot of things that we'd like to know, we don't know the answer to. this is not one of them. what will happen, hopefully next week, is that all bush-era tax cuts will be extended because we have high unemployment and now is not the time to pass on to business or upper-income americans more taxes. and i hope we can extend some of the obama tax cuts. i don't want to raise taxes on anyone. if you don't pay taxes, then you shouldn't be getting a tax cut because you have no tax liability. but if you're in the eitc range where you have some tax

liability, the obama tax cuts in the stimulus helped you, i'm one who considers that to be something we should be looking at, that no one's taxes should go up. bush-era tax cuts or obama tax cuts. when it comes to the unemployed and unemployment insurance, we're going to extend that but we have to have a package that makes sense. so once we get this vote hyped us and democrats on the other side will join with republicans on this side to say no to the class warfare approach here. now, one of my good friends from new jersey said something that got everybody stirred up, that negotiating with republicans is like negotiating with terrorists. well, i know bob menendez, he's a fine man, but these are heated times and we say things that sometimes maybe sound good to our base but upon reflection we shouldn't say. and i would argue that nobody over here should be considered in that light. to our democratic friends, we have a genuine disagreement. that's all it is, a genuine

disagreement. the one thing we have in common, when the terrorists, the real terrorists do come to visit america, they could care less how much money you make. they will kill the janitor and the business owner just as quick because they don't see any difference based on income. the one thing that america has in common is that we do believe in free speech, open debate, religious diversity, and that's not something that you believe in based on your income. that's something you believe in based on just being an american. so i would ask my colleagues on both sides to understand that not only are we in this war on terror together, we're in this economy together, and a lot of americans are suffering, some more than others. and the ones that are struggling in the middle class and lower incomes are trying to do one thing that everybody agrees on: get a job. and ladies and gentlemen, i believe the best way for

struggling americans to get a job is not to raise taxes but keep them low in a weak economy, and that's what i genuinely believe. i have not come from a rich family. i'm the first person in my family to ever go to college. my mom and dad owned a liquor store and a restaurant. they worked long and hard to make sure that my sister and myself could go to college. when my parents died, i was 22, and my sister was 13. if it were not for social security survivor benefits, we would not have made it. she received pell grants to go to school when her college days were there and i was in the air force and helped where i could. so i get it. people are struggling. there is a role for the government, but this is not the time for our government to raise taxes on anybody because all of us are struggling to try to find a way out of this economic mess. and there are some stuff days ahead economically.

there are some tough days ahead in the war on terror. let's have these votes, come back next week and see if we can solve some problems that all americans are dying for their congress to solve. get us back on sound economic footing, deal with debt, and to senator durbin, senator crapo, to senator coburn, hats off to your vote on the debt commission. you did some very hard thing, and that product is going to serve the country well. we're all in this together, and i wish everyone good holidays and maybe a time to reflect, that we do have more in common than we have in differences. thank you, i yield the floor. the presiding officer: who yields time? mr. baucus: madam president, i yield ten minutes to the senator from rhode island. the presiding officer: the senator from rhode island. mr. whitehouse: thank you, madam president. i thank the distinguished chairman. madam president, as you know, our job market is still suffering from the fallout of the recession from the end of

the bush years, and the unemployment rate nationally is near 10%. in my home state, it's well over 11%. chairman baucus' proposal would inject hundreds of billions of dollars into this faltering economy. helping struggling families make ends meet and creating jobs in the process. on behalf of the 65,000 rhode islanders who are out there currently looking for work, i want to express my support for chairman baucus' one-year extension of emergency unemployment benefits. without this extension, thousands of rhode islanders will soon be left with no source of income as they continue to search the want ads, no money for the mortgage or rent, no money for food, no money for medicine, no money even for holiday presents for their children. the one-year extension of this lifeline will quite literally mean for many rhode island families the difference between keeping a home or facing homelessness this winter.

the vast majority of unemployed rhode islanders are out there looking for work. they are out of work through no fault of their own, and they are looking for work every day, and the jobs simply aren't there. i was at the cranston senior center just yesterday for their christmas rhode island party and spoke to a lady whose son had been in the work force for 28 years. he had a substantial career. he was out of work. he was stocking shelves at the minimum wage. madam president, people are not ducking work. the jobs aren't there. historically, congress has extended unemployment benefits when the national unemployment rate has been above 7.2%. well, it's over 9%. it's 9.8%, according to the report friday. this one-year extension will give the 65,000 unemployed rhode islanders and over 15 million

unemployed americans support that they need to continue weathering this tem -- tempestuous economy. in addition, this package will continue a powerful incentive for more companies. under the proposal, qualified investments made in 2011 for small businesses would be he eligible for a 100% cap gains exclusion if they are held for five years. i have heard from numerous rhode island business owners that they would like to expand their operations, but they can't get the capital. this provision will encourage much-needed equity investments so that businesses in rhode island and around the country can create and expand jobs. i am also very pleased that senator baucus' proposal would make permanent the current tax rates for 97% of taxpayers and deliver tax savings to 100% of taxpayers. mr. president -- madam president, i'm sure you hear

from your constituents as i hear from rhode islanders that it's getting more and more difficult for families to balance their budgets. each year ticks by bringing higher fuel, food and medicine costs. budgets are stretched paper thin. and it would be harsh now to let taxes go up for middle-class families. senator baucus' proposal would keep tax rates where they are for individuals earning less than $200,000 per year and families earning less than than $250,000 per year. continuing these rates will spare middle-class families considerable tax increases. for example, a family of four earning $60,000 per year would save $2,500 under our plan. i can assure you, madam president, that for some of my constituents, that $2,500 could be the difference between paying their mortgage and facing foreclosure or the difference between sending a child to college instead of out into the minimum wage work force. in addition to continuing the

middle-class tax cuts, this will inject about $200 billion into the economy over the next two years. when middle-class families get additional resources, they tend to spend them, invigorating the economy and supporting local and regional jobs. from family budgets to the national economy, extending the middle-class tax cuts is a clear win-win. this is not necessarily the case for extending tax cuts for millionaires and billionaires. under the democratic plan, the first $250,000 of income for a wealthy family would benefit to that family from extended low rates. $6,000 to $7,000 in savings. but our republican friends want to go much, much farther and give the average multimillionaire a $100,000 tax bonus. every economist knows that a middle-class family is more likely to spend an extra few thousand dollars on groceries, on clothes, on pharmaceuticals than a person who already has

millions to spend will with an extra $100,000. in an age of large deficits, we need to start to make tough choices on our budget, and this should be an easy one. let's keep rates where they are for the vast majority of americans and perm the rates at the very tiptop to go back to clinton-era levels. now, we're warned that if millionaires and billionaires had to pay the same tax rates that they did in the 1990's, the economic recovery would suffer, but were the clinton years a time of economic suffering? of course not. the economy thrived in the 1990's under the clinton income tax rates, far better than it did under the bush tax rates, and there is no reason to think that the recovery would suffer if we restored the clinton-era rates for our very, very wealthiest and most fortunate. i find it astonishing that our republican colleagues continue to filibuster our efforts to get a tax break for all americans. in order to secure a bigger tax bonus for the top 3% of the american population at a cost to

our debt and deficit of of $700 billion. the wealthiest 1% of americans earn about 21% of all knack and own over a third of our nation's wealth. the top 1%. those figures are at their highest levels since the roaring 20's. quite simply, the rich are richer than they have ever been and senate republicans are holding hostage a tax benefit for all americans to demand a superbenefit for the superwealthy. mr. president, i hope that our republican colleagues will stop obstructing this important tax reduction and emergency unemployment legislation from funding the government to authorizing the military. we have so much work to do this year. the price for regular -- too regular americans of obstruction in the senate is becoming too high. i thank the chair and i yield the floor. the presiding officer: the senator from montana. mr. baucus: madam president, i yield five minutes to the

senator from new york. mr. schumer: thank you, and i want to thank my colleague -- the presiding officer: the senator from new york. mr. schumer: i want to thank my colleague, the chairman, for his leadership on this issue. mr. president, today we stand at a crossroads. we have two vital issues facing this country. one is an economy that is moving too slowly. the second is a large deficit looming around the corner. how do we solve that problem? the best way to solve that problem, in my judgment, is to give tax breaks to the people who will spend it, the middle class. and to make sure that the highest income people who have done very well over the last decade, instead of getting a tax break, make sure that money goes to deficit reduction. most economists who would look from 10,000 feet up who are not ideological would say that is the solution. so why then do our colleagues on the other side of the aisle make the linchpin of their economic

policy tax breaks for the wealthiest among us? it can't be because it's needed to stimulate the economy. economic statistics show that very little of the dollar we give them in tax breaks will go to stimulate the economy. it can't be on the purpose of fairness. the highest income people in america, the people who make over $1 million, people who make over $250,000 are the ones who have benefited the most in the last decade while middle-class incomes have declined. and it can't be because they care about the deficit, because if they did, that would be a much higher priority. it is hard to figure out why 42 members on the other side of the aisle say tax breaks for the wealthiest among us is more important than any single other issue. and over the next year, the next two years, when they come to the floor and talk about deficit

reduction, they will be reminded that they chose $300 billion in tax breaks for the very wealthy, not paid for, increasing the deficit over any other priority. our view is simple, mr. president: those of us on this side of the aisle -- madam president, pardon me. our view is that tax cuts should go to the middle class and the well-to-do among us. god bless them, they have done well. we don't resent it. we're proud of them. their huge increase should go to deficit reduction. it's that simple. now, my colleagues on the other side say well, what about small business? virtually no small businesses have incomes of less than

than $1 million. some big businesses disguise themselves as small businesses for tax purposes, but no small business does. so we're not hurting small business one bit. then they say what about moving the economy forward? the answer is very simple: 30 cents out of every dollar we give to tax breaks for people who make above a million dollars goes into the economy. $1.62 goes into the economy when we renew unemployment insurance, and in the most anomalous situation of all, they insist that unemployment insurance be paid for but tax breaks to the wealthy don't be. it is a philosophy far out of touch with what america needs and what average americans believe. the election was not a referendum on tax cuts for the millionaires. very few people campaigned on it. a cbs poll shows 26% of