while we're waiting for people in d.c. to decide what the rest of us can vote on in regard to cutting down on the national debt, and what we can do about being able to continue to -- for government to function on the ability to borrow, all of this is about uncertainty, and you read about the uncertainty every day in the newspaper because people don't know what we're going to do, and then that causes businesses, small and large, not to hire. it seems like they have a lot of cash that they'd like to spend and invest wisely, and some of that would surely create a lot of jobs and get our economy moving. and of course, the situation today where the revision of the quarterly economic growth has come out even less for the second quarter than we

anticipated, bring a lot of things to mind of what we can do to create jobs. because with 9.2% unemployment, that's got to be our concentration. and i would like to advise my colleagues that a lot can be learned from history. we must change course if we want to change jobs. and we've been out of the 2007 to 2009 recession, was officially over during the year 2009, and here we are still with 2 -- or 9.2% unemployment. so this month happens to be the second year anniversary of the official start of the recovery.

but what kind of a recovery? with 9.2% unemployment. it tends to be an official recovery, in other words, a recovery in name only. in this two years, we've had about 2.8% annual growth average per year of that two years, and of course i just said the growth of the last quarter was revised downward. and if you compare what we have during this recovery, which was a very, very bad recession, and you compare it to the recovery of the last deep recession, which was in 1981 and 1982, we compare this 2.8% growth now with a 7.1% growth for the recovery after the 1981

to 1982 deep recession. and of course you can go even further because i said you can compare 7.1% growth after the deep recession of 1 1981-1982 with a 2.8% average growth. so far during this two years of recovery, that has now slowed down to probably 1.5% growth. so statistically and actually and for the people that are unemployed, recovery has, in fact, been very stalled since its very beginning two years ago, as we celebrate that two-year anniversary now of a so-called recovery. still, 9.2% unemployment. so i say we must change course

and so if you want to go back to comparing now to the 1983 and 1984 period of time when we had a much more vibrant recovery, people tend to blame the weak economy today during this recovery on high personal savings rates. but in fact, people are spending more now than they did in the 1983-1984 recovery, because today the savings rate is about 5.6% and in 1983-1984, the other recovery, it was 9.4%. so you can't say people aren't spending enough. why we don't have a recovery. then they tend to blame it on

weak housing. but if you look at the difference between now and 1983-1984, that doesn't seem to be a very good reason. net exports are less now than they were in the 1983 and 1984 recovery. the growth of consumption and the groaft investmenthe growth % to 70% less than it was in the 1983-194 recovery. so what can we learn from this history of the recovery that made the 1983-1984 recession, the last great recession we had compared to this recession, better than the recovery now? why have we stalled today when we didn't stall in a comparable period of recovery after the

last great recession? if not above doesn't explain it, then, what does explain it? why, then, was the recovery of the 1980's so much more vigorous than the recovery now if we are, in fact, in a recovery? and people would doubt that. that's the question where i think we can learn from history. political leaders ought to learn from the lessons of the past, and there's a lot of lessons that can be learned going back over a long period of time. mistakes made in the great depression of the 1930's, or let's say the gigantic inflation of the 1970's. the 1930's and the 1970's were tough decades, but going through those tough times and

remembering them and maybe other tough times as well -- i'm just picking out the great depression of the 1930's and the gigantic inflation of the 1970's -- but these lessons learned by political leaders in the 1980's and 1990's, led to very unprecedented growth during those two decades, when 44 million jobs were created. if 44 million jobs were created during those decades, why do we have such small job growth now? well, i think the answer is that we went back to basic principles that this country was founded upon: political freedom and economic freedom. the principles that dominated the decades of the 1980's and 1990's, when 44 million new jobs were created, aligned with this

principles that are the foundation of our country, political and economic freedoms. those were limited government, incentives to produce, incentives for entrepreneurship, emphasis upon private markets, and rule of law. these tended to be in ascendancy during the decades of the 1980's and 1990's and it led to monetary policy that brought about price stability, that brought about lower marginal tax rates. regulations encouraged competition and innovation. we had welfare decisions that were devolved down to the states where they could be handled more efficiently. and we had spending restraints

that led to balanced budgets during the late 18 -- or late 1990's, playing down $568 billion on the national debt. so there was great hope that what was done during the 1980's and 1990's that brought about 44 million new jobs would extend into the 21st century and that it would be continued to bring market-based principles into social security and other entitlement programs. bring market-based principles into education. bring market-based principles into health care. because if these market-based principles worked during the 1980's and 1990's of the last century and created 44 million jobs, the success of that ought

to carry over into other government policies so we could continue down the road of creating jobs instead of stagnating like we have now. but sometime after 2000 -- and that doesn't mean just after president obama was elected, because there was a republican president before that -- but sometime after 2000, both political parties compromised. and i want to emphasize both political parties compromised on the principles of limited government. they did it for a multitude of reasons and some of these reasons were that they want -- they thought that government ought to control business cycles to a greater extent. that we ought to increase homeownership, and you know how that worked out. we ought to have a policy that if you -- you ought to be able to buy a house that you can't

afford. now, that -- now we know that's a stupid policy, but at the time, we didn't know it. and the prescription drug issue as an example, although there were some market-based principles put into that. but anyway, there's a multitude of reasons why there -- we ought to compromise the principle of limited government but it ended up more interventionist and it made the federal government more powerful and we ended up with unintended consequences. the financial crisis that we still remember, still trying to get out of, the recession that i've already talked about of 2007 and 2009, of which we're celebrating two years of supposed recovery that isn't real recovery. we've had a great amount of expanded government debt and now

we have this nonexistent recovery. 9.2% unemployment. i think looking back, how did this happen? and i was here when it happened. reminds me of the story about, well, i guess i ought to say it and then give the story. it happened so slowly and all these things added up to be bad and bring about the great recession and now not a very good recovery because each one of them happened independent of the other and without one relating one to the other. and so it reminds me of the story of the frog and the water. if you throw a frog in boiling water, he'll jump out and live. if you put a frog in cold water and gradually heat it up to a

boil, he's going to accommodate the changes and die. and so these policies slowly developed and we got into the situation that we're in right now. say it again. change came so slowly, it crept up on us. and then, of course, what happened? the crash came. we had this federal intervention in housing. i stated it before. buy a house if you can't even afford it. we -- we eliminated in some of the laws we passed the federal reserve's account -- we eliminate a lot of federal reserve accountability, particularly when they didn't havhave to report on monetary growth on a regular basis like they did before. and then we had these countercyclical fiscal policies that failed.

we have on -- we had during periods of growth in our economy unrealistic low interest rates by the federal reserve action. and then, of course, we had government bailouts. and, of course, this has led to things all getting worse since 2009. we had more intervention, we had really loose monetary policies, qe1 and qe2 of the federal reserve. we had a stomach husband plan that was supposed to -- we had a stimulus plan that was supposed to keep unemployment under 8% and since it was passed in february of 2009, unemployment's never been below that. it's always been above 8%, 9.2% now, but it was even over 10%. we had the cash for clunkers program. we had the first-time

homeowner's tax credit. all of these together has not brought recovery even though the economists tell us we're in the second year anniversary of a recovery. well, what did they bring that has stalled the recovery? what they have brought is just more uncertainty and more uncertainty is bad for the economy because, as i said when i started out, there's plenty of money out there in corporations, there's plenty of small businesses that want to hire but they don't know what we in this congress are going to do to them so they're not moving forward and, consequently, the unemployment rate's not going down and -- and right this very hour, as people are trying to find something that can pass this body and the other body so that we don't have default, it even brings more uncertainty.

and you read it in the morning paper, this morning's paper. so you have to come to the conclusion with all of this intervention, bringing about all this uncertainty, that big government is not a very good manager. and then i said this didn't happen just since president obama became president. this happened over a period of time of this decade and maybe even going back a little bit into the other decade, but just since president obama was elected, we have added more -- yet more complex intervention. the health care reform bill, dodd-frank, the consumer protection bureau, and the president this very week has been talking about increasing taxes only he doesn't use the word taxes. we have got to have more revenue or we have got to have balance. but it still adds up, all of

these things out there that government doesn't know what all these rules and regulations. do you realize in health care reform, there is 1,690 delegations of authority to the secretaries to write regulations, and they aren't going to be written for years, but there is -- that brings so much uncertainty. so we have more uncertainty plus unintended consequences that come out of these like right now, rising health care costs because of the bill, deterring new investments because of dodd-frank and deterring risk taking, and risk taking is what entrepreneurship is all about, and entrepreneurship is mostly related to small businesses where 70% of the new jobs are created. so government intervention is a problem because government intervention or government not making decisions all adds up to more uncertainty. so i think the solution is to

unwind government intervention in all these regulations that e.p.a. and all the other government agencies. every day in the newspaper you see some new regulation coming out. if you want to get people to hire, you ought to just shut down the printing presses for a while. one sure thing, though. we can thank god that we have run out of monetary and fiscal ammunition because it hasn't worked anyway. we're probably going to have a great deal of inflation because of what the fed did. we have no more spending we can do because all the spending we have done hasn't done the good it was supposed to do. we need no more greater debt, and we don't have any more zero interest rates to put out there because that's practically where it is right now. instead, what we need is

spending controls and what we need is free market principles. historical evidence shows what works and what doesn't, and i said what works and what doesn't is the lessons learned from the depression of the 1980's and the gigantic inflation decade of the 1970's so people in the 1980's and 1990's change policies that were market oriented and we created 44 million new jobs. so we ought to be learning from history. historical evidence shows what works and what doesn't, and right this day in this town, interventionists in the market control today. we need to restore the less intervention, the policies of the 1980's and 1990's to restore

jobs. remember, it created 44 million new jobs. i yield the floor. a senator: mr. president. the presiding officer: the senator from indiana. mr. coats: mr. president, are we under a time agreement? the presiding officer: the senator has ten minutes. mr. coats: thank you. mr. president, for several months now, i have been on the floor speaking, urging both republicans and democrats to listen to americans and take this unique opportunity that we have before us to do what is right for our country's future. 2010 sent a mistakable message. americans do not want us to spend more than -- beyond our means, more than we take in. they don't want hire taxes. they don't want budget gimmicks,

smoke and mirrors. they want the real serious addressing of a real serious problem. we have worked several months to try to do that. as i talk to hoosiers all across the state of indiana, business people, retired workers, young people and others, i sense the fear and the frustration and disappointment of a growing number of people and even anger in their voices that started in 2010 and is accumulating as we continue to kareem toward this date of budget default, without a sensible or serious plan in place that they could look at and feel confident that we're back on the right track toward fiscal health. american families are scared. they are scared and they are frustrated and i think rightfully so. they are worried about paying next month's bills. they are worried about getting a loan to buy a house or credit to help support a business. they are worried about being able to pay the freight for sending their kids to school in

the fall just a few weeks away. our seniors are scared. throughout this debate, they have been used over and over again as a political football for scare tactics. my phones are ringing off the hook with seniors basically saying we have been told that you're going to take away all of our benefits when that is absolutely not true. we're trying to save those benefits. we're trying to take the reasonable measures necessary so that those benefits for social security and medicare are there for the future as seniors age and need those -- need that support. american businesses are frustrated, they are sick and tired of washington's inability to act. "the washington post" reported this week that -- and i quote -- business leaders are growing exasperated with washington, and they say dysfunction in the political system is holding them back from hiring and investing. and the markets are jittery. we have seen a pretty good drop in the markets just this week.

the dollar fell to a new low against the yen and the yen isn't doing all that great. we continue to see stocks tumble. so those -- many have asked why haven't we acted yet? what are we waiting for? why haven't we passed a bill to avoid this default? why are we in this period of uncertainty? taking it right up as the clock ticks toward august 2. and while the president refused to even put forth a plan, house republicans have been working to pass legislation. they passed the cut, cap and balance act. they brought it here to the senate floor. we weren't even allowed to debate or vote on it or have amendments. for those who didn't like it, there would have been an opportunity to improve it. there would have been an opportunity at least to have a yes or no vote on whether this was the path to where we needed to go. we didn't have that opportunity. and now as -- even as i speak,

we are moving toward another vote in the house, something similar coming forward tonight by speaker boehner and republicans in the lower house. unfortunately, it looks like we're going to be blocked from debating that bill. there will be yet another motion to table to deny the opportunity to -- to move forward. now, we know there are things going on around behind the scenes as going forward, but this doesn't provide any assurance to the american people that whatever is being debated and put together is going to solve the problem. we're days away from exhausting our financial options, and we don't even allow those bills that do come before us to be debated and looked at. now, mr. president, we have few options left in these few days that we have remaining. we can, number one, default and watch our u.s. economy being downgraded, interest rates rise

and the confidence in the united states as a place to safely invest your money deteriorate all around the world as we enter the first default in american history except for a technical glitch some many years back. the second option before us is that we can -- we can pass legislation that is below where we need to be and where we ought to be, but we weren't able to get there, but it would avoid a default, but it also might not avoid a downgrade of our credit. because it hasn't matched and met the minimal requirements of what most who have analyzed this situation have understood that we need to undertake. the third option, one that hasn't been talked about too much but several of us have been discussing this possibility, pass a short-term extension that will avert a default but allow us to continue the work for a serious fix that gets to those

minimal measures necessary to make progress toward fiscal health. that first option, i don't believe, is a viable option. default has consequences that we can't begin to understand and eventually those bills which the american people and their congressional representatives have put in place, those bills have to be paid because those promises were made and they have to be paid and adjustments haven't been made in it yet in order to decrease the amount of money that has to go out. the second measure, it may be what we're faced with. perhaps the best of the worst, and that is subpar legislation that begins the process of addressing it but is woefully short of what needs to be done. the third option, the short-term extension, is a way that we can avoid the default and we can

achieve cuts for the amount of necessary borrowing authority to get us through this period of time, whether it's two weeks or four weeks or eight weeks, but this short-term period of time when we can make yet one another last-ditch chance to try to bring forward something that will avoid default but also put us on the road to fiscal health. so i'm urging my colleagues to -- that if we can't come up with something better than what we have, to give that serious consideration. what are those minimum levels? a $4 trillion cut over ten years has been told to us over and over and other by anyone who has analyzed the situation as the minimal amount necessary to go forward. others suggest quite a bit more. the gang of six was working on, i believe, a $6 trillion cut over that period of time. simpson-bowles provided for for $4 trillion or more. senator coburn has brought out a plan and others have suggested

we need to be in the $9 trillion to $10 trillion range, but everyone has said you need to at least be at $4 trillion, and we're short of that, considerably. we're also short of not having a real commitment, a serious commitment, and plan and timetable to address the structural unraveling of our mandatory entitlement systems, medicare and medicaid and social security. this has been the political football kicked around, scaring seniors and others by saying that congress is here to try to take away their benefits when actually we're here trying to save those benefits, but without structural changes in those programs, it is driving this deficit to a point which will be unsustainable in terms of providing benefits for those who need them. we are going forward without a commitment to balance our budget, which i think is absolutely ultimately the only thing that will keep us from being -- doing binge spending

here. the tendency is to want to say yes to everybody and no to nobody, and we need something that will force us to be faithful to the constitution of the united states, to have a balanced budget and not spend more than we take in. and also we all know that we need an overhaul of our complicated tax code to make american businesses more competitive and to spur economic growth. after all is said and done, what really this is about is getting our fiscal house in order, getting our economy moving again again -- a terrible number this morning about virtually small, almost nothing lack of growth in the first and second quarters of this year, but getting that economy growing again so we can get people back to work. that's what it's all about. we're not here to be draconian cuts just for the fun of it. we're here to get our budget in balance so we can get our economy moving so people can have viable jobs for the future,

so those kids coming out of college have a place to go and so the 55-year-old worker who is laid off and may never get back to work can get back to work, and so those that are seeking meaningful employment to pay the mortgage and raise a family and buy a home and send their kids to school will have the ability to do that. that's what it's all about. we're not doing this just for the fun of it. it's no fun to tell people we've got to cut this and cut that and sacrifice here and sacrifice that but we have put ourselves in the position where we have no other choice. and to spend all of this time here, seven months of diligent working by a lot of people -- the speaker pro tempore: the senator's 10 minutes is up. mr. coats: i ask unanimous consent for just one more manipulate. the presiding officer: without objection. mr. coats: thank you, mr. president. i thank my colleague also for her patience. to -- to accepted us here after seven months and come up with

here and come up with something that is short of the minimum that continues the uncertainty, that -- are they going to be able to pull it together with this two-stage process and gathering senators together to put up -- and congressmen to put a plan together we haven't been able to do in the first seven months but we'll do it this the next five months, a lot of people have some real problems with that. mr. president, i just want to close by saying that we cannot give up on the process of getting america back to fiscal health. we have to keep working. i proposed a way here to try to do something better than what we're going to be faced with and doing in order to avoid this default. i'm hoping that we had the opportunity to do that. if not, i'm hoping we had the commitment to go forward and do what we all know we need to do for the sake of the future of the american country, this country we love, and we want to be prosperous and forsake -- for the sake of the future of american families and their children. 34r-79, with that i yield the -- mr. president, with that

i yield the floor. the presiding officer: ms. stabenow: mr. president. the presiding officer: the senator from michigan. ms. stabenow: i rise to talk about what this crisis means for the businesses that i represent. i grew up in a small town, small 2340er7b town of claire, michigan, where my family ran the automobile dealership, the oldsmobile dealership and my mom was a nurse at the local hospital. my first job was washing the cars on the car lot, mr. president, and it was a time when people believed in america and the full faith and credit of america. i can't imagine, i can't imagine my parents and my grandparents ever believing that it would be possible for america

to default on its obligations. but here we are today, and that is a very real possibility. it's outrageous because it does not have to be this way. we have been through a lot in michigan, mr. president, and i know you know that. we've had more people out of work than any other state in this recession, in fact, we've been hit harder, longer, deeper than any other state. we've took the brunt of the recession and people are now just starting to get back on their feet. and they're the lucky ones. when people in washington talk about this default crisis like it's just another political game, it is not a game. it is not a game. to the families i represent, it is not the game, to the seniors

i represent it is not a game to the small businesses or to the manufacturers who have worked very, very hard to turn things around and move forward in our state. it's not a game to the people who are really worried about what's going to happen on tuesday if we can't come together and create a solution. which we absolutely have to do. there are nearly two million people in michigan, senior citizens and people with disabilities, who have earned their social security benefits and might not receive them next week. we have 1.6 million seniors, people like my mom, who may not be able to see their doctor and use their medicare next week. michigan has 700,000 veterans, men and women who have bravely

served our country, and they expect us to keep our promise to them as a country. those are the people i'm thinking about today. as we're trying to find a bipartisan compromise. we have to solve this problem and we need to get it done now, and there is no reason that that can't happen. i'm hearing from small business owners. i've been on the phone today, talking to small business owners. the people who we need in michigan to turn the economy around. they're doing everything they can to grow their companies and to create jobs, but now they need customers, and they have customers who are saying that they're afraid to make a purchase. they're holding onto their dollars, they're afraid to buy a house or furniture.

today i talked to a friend of mine in northern michigan, a prominent auto dealer who indicated that he's got people that normally come in every three years and buy a new car, and they're just waiting because they don't know what's going to happen. they don't know what's going to happen in the economy, they don't know what's going to happen to them and their families, and they are waiting. they're waiting for us. they're waiting for washington to get its act together and to solve this problem. and to move on to the other challenges in front of us, particularly to focus on jobs. our recovery has already taken hits. we saw that this the economic numbers that came out this morning. families in michigan have already taken the 1-2 punch of higher food prices, higher gas prices, and now we have tweem

talking seriously about letting the country default which will lead to higher interest rates. for people trying to raise a family, for small businesses trying to hire new employees, the last thing that they need that anybody needs, are higher interest rates. a default would cripple the ability of our companies to create jobs. and it's the people who are already hurting the most, the middle class, working families, who will pay the biggest price once again. and that is just wrong. and worst of all, that scenario would be entirely self-inflicted by people in both ends of this building who aren't willing to come together and work together on a bipartisan basis to resolve

this. there is absolutely no reason why this country needs to default on its obligations. there is no reason. i'm hearing from seniors in michigan who are really scared that they might not get their social security checks next week, and they're living check to check. benefits they have worked their whole lives to earn, and it is absolutely ridiculous that they would have to worry about that in the greatest country in the world. all because people in washington can't seem to sit down and work this out. for many seniors in michigan, that's all they have to live on. that's all they have to pay the representative, to buy groceries, to pay for their medicine. they're worried about how they're going to live if this country goes into default.

i'm hearing from veterans in michigan, many of whom were left disabled after their service, who are angry and rightly so, that the country they fought for might default on their payments for the first time. i'm hearing from young people who are worried about their future, and the future of their generation if congress allows the full faith and credit of the united states to come into question. now, we all know it is critical to be able to cut spending, to be able to cut the deficit. we also need to grow the economy. we need a full balanced package but we understand the critical nature and the importance of cutting this deficit that has been allowed to accumulate over the last decade. we have already cut spending. we will cut more. the bipartisan plan that will soon come before us -- and i want to thank senator reid for

his leadership in bringing this forward and working so diligently and colleagues across the aisle who have been working here in the senate to create a bipartisan plan. but the plan that will be before us cuts spending by nearly $2.5 trillion. and it does even more. it creates a second step that is absolutely critical if we're going to tackle the rest of the story, the rest of the country's challenges so that we can create a truly balanced approach to eliminating the deficit. and people in michigan understand that to do that, that includes cutting special subsidies and other special interest spending through the tax code. and creating a fairer tax code so that reducing our deficit is not once again put on the backs of middle-class families and senior citizens who have already

paid a heavy price. this has got to be balanced, long term, fair, solve the problem, and allow us to grow the economy and create jobs. and i so appreciate and have worked very, very hard to make sure that the plan in front of us protects and maintains medicare and social security. this has been a top priority for our majority, and the plan that senator reid will be offering does that. most importantly, the senate plan creates certainty for the economy in the markets through 2012. you know, people in michigan don't want us having this debate every month. they certainly do not want us having this over and over and over again.

and we know, because we've heard, that the plan that unfortunately will come to a vote in the house, unfortunately will not have bipartisan support, doesn't solve the problem, doesn't stop us from being downgraded in our credit ratings, doesn't put us in a situation for long-term problem solving. it keeps us stuck in the mud for months, over and over and over again. by only addressing the debt ceiling for four months or six months, we will be right back here again stuck when we need to be able to solve this and move on and focus on growing our economy so that businesses can create jobs. you know, mr. president, people in michigan have had enough. i've had enough.

they've had enough. one man called my office earlier today, said i don't want to relive this nightmare in a few months. i couldn't agree with him more. we cannot be in a situation where we are not creating economic certainty. solving this problem and then moving forward as a country, in a global economy. we have a lot of work to do to be able to compete around the world and make sure that our businesses are creating jobs here at home. families, small businesses in michigan, have been through enough. it's time to get this done. we got to do it together. it is about working together. it is about creating a bipartisan plan. and it's time to get that done.

i know my colleagues here in the senate on both sides of the aisle know the seriousness of this situation. i certainly know our leader does and i'm grateful for his persistence and focus in bringing people together to solve this. we have a serious debt crisis that we can and must solve. and the house must join us in a bipartisan solution. we also have a jobs crisis in our country. we need to resolve the current impasse and then focus like a lairser -- like a laser on growing our economy so companies can create jobs, so that we can get out of debt and we can stay out of debt. i would strongly urge my colleagues, my colleagues on the other side of the aisle here in this chamber, to continue to

work together to find the solution, to come together to get this done in the senate. i would urge my colleagues on behalf of hard-working men and women of the state of michigan. it is time to come together to get this done. we know what needs to be done. we know it has to be bipartisan, and we know we are to work together. people in michigan are saying enough is enough. it's time to get this done. thank you, mr. president.

the presiding officer: the senator from utah. mr. hatch: mr. president, i ask unanimous consent that i be permitted to give my full speech. the presiding officer: is there objection? without objection. mr. hatch: mr. president, according to president obama and treasury secretary geithner, the federal government will befall on its obligations in five days, on august 2, 2011. it is clear that some democrats, including president obama, want to use this fiscal crisis to raise taxes under the guise of closing loopholes. the administration wants to set the stage for tax increases to finance historic levels of government spending. when this president came into office, he saw himself as the second coming of franklin d. roosevelt. he was going to finish the work that l.b.j. was unable to complete and a fawning media was happy to encourage his grandiose vision for national economic reordering.

now, i get a big kick out of this "time" magazine, "the new new deal." using the financial crisis of 2008 and 2009, he was going to transform the united states into a european-style social democracy. businesses and the individuals who start them would no longer be free entities with property rights. they would be arms of the state that exist for the purpose of funding ever-expanding welfare programs. taxation would no longer be a necessary evil with citizens and businesses recognizing a legal duty to pay what was owed but understanding that they were ceding their property rights to the government to provide for certain public goods. instead, businesses and tax-paying citizens would be obligated to share their wealth with the state. and because the progressives running the administration do not believe in natural rights to liberty and property because

they think everything -- everything a family or business makes is, in fact, due only to the largeess of the state, paying taxes is no longer something that somebody done but something people should want to do. they owe it to the government to pay taxes since that money is not really theirs anyway. in this new progressive political community that the president hopes to create, taxation becomes shared sacrifice. and taxpayers become gleeful participants in -- quote -- "spreading the wealth around" as the president once put it. but the president and his party have hit a brick wall. the spending part was easy. the taxing part is hard. for all of the talk about how republicans are divided on the issue of raising the debt ceiling, you only have to scratch the surface to see the deep divisions among our fellow -- our democrats. the reason that the president has offered up no plan to reduce spending and the reason democrats have not passed a budget in over 800 days is because they are badly divided.

they all want the massive levels of new spending that the president pushed through in his stimulus and obamacare but not all want to pay for it. they all want to maintain existing levels of entitlement spending but not all want to raise the taxes necessary to pay for it. they know that some of their constituents, like all this spend -- constituents like all this spending but they know that the vast majority of americans reject the president's funding of his leviathan state through higher taxes, so they do nothing. the president has no plan. i want to repeat that again. the president has no plan. maybe if we shout it from the rooftops, the immediate qua will start to take notice. the president has no plan, and senate democrats don't either. certainly not one that addresses our current fiscal crisis. the critical issue we face is more than imminent default on our obligations. that is unlikely to happen. it certainly should not happen. in my opinion, it will only

happen if the president wants it to happen. on wednesday, i asked the financial stability oversight council, which is chaired by secretary geithner, to provide me and the rest of this institution with an assessment of the cash position of the united states as congress considers options for raising the debt ceiling, it needs to know precisely how treasury plans to pay its bills and when it is going to fall short of cash to do so. i asked that the secretary responsibility to this reasonable request by yesterday afternoon. the secretary chose not to respond. mr. president, i want to be clear that this unresponsiveness by the treasury secretary is unacceptable. president obama needs to understand that this failure to provide the senate with critical information is not tolerable and will not be forgotten. still, i'm confident that the nation will get through this immediate crisis and there will be no default, but that is only part of the problem. the real issue remains, the

united states cannot continue to support the level of spending president obama has given us and that democrats from the new deal onward have bequeathed to the nation in the form of ever-expanding entitlement spending programs. that is the real issue, and the majority leader's proposal does not address this any more than the president's white house bromides about balanced solutions address it -- about a balanced solution. the real throat this nation is not the -- the real threat to this nation is not the threat of a downgrade due to default. the real long-term threat is a downgrade of the nation's credit rating because president obama has written checks that this country simply cannot afford and cash. the real threat is that interest rates will go up for businesses, families, students, homeowners and anyone who has to borrow money. the economic ramifications of a downgrade tnr remains weak.

annualized growth in real inflation-adjusted g.d.p. was only 1.3% in the second quarter. this follows on the heel of a 0.4% growth in the first quarter. along with many others, i have said that if we do not get our spending under control, we are on a glide path to greece and other euro zone countries whose credit ratings are destroyed and whose bonds have junk status. those countries would not have solved their problems by allowing the government to borrow money. their only way out was to reduce the size of their welfare stat states. yet this is what the president and the treasury secretary and congressional democrats are suggesting as a solution. they would have you believe that everything will be set right if only we give the president the legal authority to borrow an additional $2.7 trillion. americans are not buying this snake oil. i know that utahans are not

buying it. they understand that our nation's fiscal problem is spending. giving the president more power to borrow more money is not going to fix the problem. reducing spending is going to fix that problem. the numbers could not be more clear. as you can see, this federal taxes and spending as a percentage of g.d.p. the red line on the top is the spending line, and you can see it's out of control in 2012 obama budget. the blue line is the average of what it's been in the past. and you can see it's tremendously below what the president's budget really -- where it's taking us. federal spending as a share of our economy is trending at a pace 15% to 20% greater than its historical average of 20.6% of g.d.p. if we leave in place this year's level of taxation, including the marginal rate relief of 2001 and

2003 tax cuts and patch the alternative minimum tax, or a.m.t., the federal tax take will equal or exceed its historic share of the economy. liberals suggest that deficit and debt must be addressed through tax increases. this is either deliberately misleading or sadly delusional. maybe we have found the truly shovel-ready products of my friends on the other side and they smell like a freshly fertilized farmer's field. or maybe my friends on the other side simply refuse to come to the grips with reality. but sticking their heads in the sand is not an option here. the markets and the american people understand the nature of our crisis. non-defense discretionary spending is at historic levels and our entitlement programs are headed for bankruptcy. the fiscal year -- this fiscal year, we have a projected budget deficit of $1.5 trillion.

we have a debt of over $14.3 trillion. president obama's budget assumes $13 trillion in new additional debts. this spending needs to be brought to heel and brought under control, but the proposal of the majority leader does not get the job done. it allows for the largest debt ceiling increase in history. this makes sense? president obama has given us the largest deficits in our history and his borrowing needs are historic as well. to pay for his political science experiment to turn the united states into sweden, he earlier required a $1.9 trillion debt limit increase. that was the largest in the nation's history. but now he's coming back for another $2.7 trillion. conservatives understand that

this is not sustainable. it is one thing to raise the debt limit. it is another thing to do so without reforms that would keep us from getting into a fiscal crisis of this magnitude again. that is why i and many others in congress pledged to vote against the debt ceiling increase prior to the institution of immediate spending cuts and spending caps and sending a strong balanced budget constitutional amendment with taxpayer protections to the states for ratification. to be clear, that commitment to cut, cap, balance passed the house with bipartisan support. the senate could have taken up the bill -- taken that bill up last week but democrats chose to table it rather than debate it. and the president chose to tell us what he did not support rather than what he does support. any increase in the debt limit needs to be accompanied by serious spending reductions but the bill of the majority leader does not get us there.

all it does is provide president obama with an opportunity to borrow more money to pay for more spending. the president would get a $2.7 trillion debt limit increase but less than $1 trillion in cuts. and most of those cuts are gimmicks. they assume savings for more spending that the president has not requested, that is unlikely to materialize. ani notice the majority leader s here and i would be glad to yield without losing my right to the floor and also without having my remarks interrupted. mr. reid: mr. president? the presiding officer: without objection. the majority leader. mr. reid: i appreciate my good friend from utah, my longtime friend, for yielding to me. and i agree that his remarks should not appear interrupted in the record. i ask unanimous consent that morning business be extended until 6:45 p.m. today with senators permitted to speak for up to 10 minutes each and that at 6:45, i be recognized. the presiding officer: without

objection. the senator from is utah. mr. hatch: most of these cuts were gimmicks. they assumed savings from war spending that the president has not requested and that is unlikely to materialize. it does not include a balanced budget amendment. and most importantly from my perspective, it assumes a massive tax increase in 2013 by allowing the 2001 and 2003 tax relief to expire, allowing the a.m.t. to hit middle-class taxpayers, and allowing for increases in estate taxes that are a small business and job killer. you won't see that, though, in the talking points. they buried the breadth of that tax hit on their baseline assumptions. but we know that president obama and his liberal allies are planning massive tax increases on the middle class. and while their rhetoric suggests that we can fix our debt crisis just by raising taxes on the rich and closing loopholes, the reality is that they are setting the stage to

roll back tax expenditures. and cutting back tax expenditures will be a tax increase on middle-income itemizers. when democrats talk about tax expenditures, they are talking about your ability to purchase a home or save for retirement or give to your church or put away money for your children's h education that. is where the money is. it is not in bonus depreciation for corporate jets and it is not in tax benefits for energy companies. it is not in changing the treatment of carried interest for private equity companies. it is not in repealing the deduction for mortgage interest related to yachts used as second homes. this issue of tax expenditures is confusing and demands greater clarity. as ranking member of the finance committee, it is my responsibility to correct the record on what the curtailment or elimination of tax expenditures would mean -- would really mean for taxpayers and families. i have spoken about tax expenditures a number of times in the last few weeks but given

the failure of the president and his congressional allies to take on our spending crisis, i want to reemphasize the essential point. if democrats are permitted to balance the budget their way, it will result in new tax burdens for the middle class. tax spendures are not, quote, spending through the stowed, unquote. they are an opportunity for to you keep more of your own money and they are not by and large special interest benefits that disproportionately benefit wealthy taxpayers. the democrats' rhetoric on expenditures does not jibe with the reality of our tax code. the data are clear. tax expenditures tend to skew towards taxpayers below the president's definition of the rich. let's work through some examples of what concrete proposals to cut back tax spendures would

yield in revenue and what they would mean to middle-income americans. i'm going to take a look at the budget outline presented by our friend and colleague, distinguished chairman of the senate budget committee. the senate democratic caucus outline was discussed among the larger democratic caucus. republican members, including long standing budget committee members were briefed by reading the details of the outline in "the washington post." the senate democratic budget called for $2.38 trillion in tax increases when measured against the current policy baseline. the current policy baseline represents the lefg of taxation americans are currently paying. according to materials released by senate budget committee democrats, they are looking at three categories of tax increases. the first category would raise marginal rates on single taxpayers with $500 and over in

income and married couples with $1 million and over in income. for those taxpayers including many small business owners, the marginal rates would rise by 17%. according to the tax policy center for t.p.c., a think tank often cited by our friends on the other side, certainly not a conservative think tank, at least 38% of flow-through income, much of it small business income would be subject to the marginal rate hike. the marginal rate on dividend income would rise by 33%. keep in mind that the i.r.s. statistics of income group reports that 65% of capital gain income would be hit by this tax hike. add in the tax increases from obamacare and in less than 18 months the marginal rates on capital gains and dividends will rise by 59%. is that a positive signal for investors who move capital into

projects? that tax hike represents $380 billion of tax increases in the democratic budget. now, look at this chart. the senate democrat budget tax increases. the total tax increases needed are $2.3 trillion. they suggest raising the tax rates on singles over, that is $380 billion. closing loopholes and curtailing off-shore tax evasion is $262 billion. and the remaining tax increases needed from tax expenditures would be $1.738 trillion. so you would take total tax increases needed,

$2.38 trillion, reduce it for the raising of marginal rates on singles over 250,000, reduce corporate loopholes and curtailing off-shore tax evasions for $262 billion and remaining tax increases needed from tax spendures from tax expenditures alone would be $1.738 trillion. now, the second category of tax increases in the democratic budget, is a set of concepts we've heard about for years in senate floor speeches. president obama frequently refers to them as well. we also see these concepts mentioned in the vast left-of-center d.c. think tank establishment and by liberal pundits. they fall into two groups of proposals. the first group is closing corporate loopholes.

the second group is curtailing off-shore tax avoid answer -- of evasion. now, again, as you can see, they want to increase taxes $2.38 trillion, they want to raise the marginal rates on singles over $200 and married over $250,000, that's $380 billion and they want to close corporate loopholes and curtailing off-shore tax evasion, they think they can save $262 billion on that and that still leaves $1.738 trillion. finance committee republican staff compiled all known specified and scored proposals in these two groups. staff calculated the proposals as summing $262 billion over 10 years. the numbers are joint committee on taxation scores. cons cons to insert in the

record a summary -- i ask unanimous consent to insert in the record a summary of the staff calculations. the presiding officer: without objection. mr. hatch: thank you, mr. president. to president obama's credit, he put his money where his rhetoric is. most of the local closures and off-- loophole closures and measures were contained in his budget. if you subtract the categories of increases there remains $1.73 trillion in tax increases the senate democratic budget must find by cutting back tax expenditures. now, here we go again. this is a very important chart. i remind everyone of something i mentioned in my first discussion of tax expenditures. the joint committee on taxation warns us that the tax spendure figures are not -- ex peppeddure figures are not the same as revenue figures. a march, 2011 the c.b.o. released a set of budget options for deficit reduction. on the revenue options c.b.o. and joint committee on taxation

estimated the proposals, there are a number of them that deal with cutbacks on tax expenditures. if we start with the senate democratic budget's target of $1.73 trillion, we can see an illustration of some policy options that tax writers would have to consider. i have a chart that lists the revenue raised from some of these options. now, look at this chart. it may be difficult to read on the television monitor. so i'll go through them. these are tax expenditure policy options from the congressional budget office to raise revenue. in other words, they're going to tax and take away these tax expenditures. number one would be they would eliminate the deduction for state and local taxes. i don't think many people are going to want that to happen. number two, they'll tax social security benefits similar to defined benefit distribution. that's $438 billion right there.

in increased taxes. number three is tax investment income from life insurance and annuity dwris, $260 billion. foul play numb four, curtail the deduction for charitable giving. can you believe that? that's $219 billion. number five, gradually eliminate the mortgage interest deduction. take that away from people who buy homes? that's $215 billion. eliminate the child tax credit. that's $117 billion. raise tax rates on capital gains, that's $49 billion. eliminate number eight, eliminate education tax benefits, that's $48 billion. number nine, reduce 401(k) contribution limits, that's $46 billion. number 10, tax carried interest as ordinary income, that's $21 billion. well, the first one should cause some concern 0 to my friends on the other side. it would eliminate the state and

local income and sales tax deduction. the 10eud called blue states generally have high state and local tax burdens. eliminating that deduction will mean the constituents of my friends representing those states will find themselves with an effective tax increase up to 35%. that's what they're doing to themselves. eliminating this deduction would yield revenue of $862 billion over 10 years. the second one here would reduce aftertax value of social security benefits received by seniors. this kobayashi -- this option would tax seniors. funny how much fur has flown over social security reform yet this cutback on social security benefits has flown under the radar. it appears that not all tax expenditures are about corporate jets and yachts. that proposal would raise $438 billion over 10 years.

i mean come on. hit social security for something like that? let's look at the third tax expenditure. cutback. option. that would tax inside buildup in life insurance. here's an example. under current law if a father and mother buys a $100 life insurance policy and makes the surviving spouse and children beneficiaries, death benefits a tax-free benefit of 1 hoonts. under this -- $100,000. the difference between the face amount and the premiums would be taxable. that new tax would raise $260 billion over 10 years. who wants to do that? the fourth one on the list is a tax benefit near and dear to many of my fellow utah families, the item itemized deduction for charitable

donations. under this option only those deductions that exceed 2% of adjusted gross income would be deductible. for many utahans who tithe -- and i'm one of them -- we tithe 10% of our gross income. this would mean an automatic cut of 20% of our deduction. not just utahans but charitable givers all over the country. this proposal would reduce the tax benefit of charitable giving by $219 billion over 10 years. now, the fifth one is well known, to tens of millions of our constituents, it is the home mortgage interest deduction if a taxpayer saves up a down payment and borrows for a home, they can take the interest paid on the mortgage as an itemized deduction. this proposal would gradually eliminate the home mortgage interest deduction.

in 10 years the deduction would be gone. this proposal would raise $215 billion over 10 years. the sixth tax expenditure cutback option involves the current $1,000 per child tax credit. that credit drops to $500 per child in 18 months if the 2001-2003 tax relief plans are not extended. it is by definition limited to lower and middle-income tax paying families. the c.b.o. tells us if we were to eliminate it there would be $117 billion raised over 10 years. the secretary of state tax expenditure cutback would partially eliminate the expenditure for lower are rate on capital gains and dividends. it would in effect eliminate 25% of that tax expenditure and significantly drive up capital gains and dividend rates. as i indicated earlier, the top

marginal rate on capital gains and dividends is set to rise by 59% unless an 18 -- in 18 months if the president gets his way, and if my friends on the other side get theirs. this option though described as a cutback on a tax expenditure would drive that rate up higher. the marginal rate on two-thirds of capital gains income would be driven up 72%. it would raise $49 billion, though, over 10 years. for our tax-seeking friends. the eighth tax expenditure cutback option would sharply curtail tax benefits for families who send their kids to college. it would eliminate the hope scholarship and lifetime learning credits and phase out the stiewnd student loan interest deduction and for that half that pays the freight in society, the 49% who pay income tax, our friends on the other side are telling them their load is just going to get much

heavier. that would be their message to middle-income american families who want to send their kids to college. this option would raise $48 billion over 10 years. the ninth tax expenditure cutback option would reduce limits on contributions to retirement plans. about 50% of american workers participate in retirement plans. they save for their own retirement. they don't look to rely on -- only on social security. there is bipartisan consensus that for america to remain prosperous, families and individuals must save more during their working lives. yet this option would go in the other direction. it would mean less in retirement savings. c.b.o. says it would raise $46 billion over 10 years if we take that one away. now, the 10th tax expenditure cutback option is one we've

heard much about here from my friends on the other side. it would tax partnership interest known -- known as carried interest. my goodness. it would actually tax partnership interest known as carried interest. like ordinary income rather than capital gains. interestingly enough, with a solidly democratic senate last year, this revenue raiser did not pass. there's a loft speculation about that. i won't join it but it is curious that when constituencies that favor democrats decisively raise legitimate concerns about the possible negative effects on private equity and enterprise value, this proposal didn't quite make it past the finish line. that proposal would raise $21 billion over ten years. now, mr. president, if you assume no interactive effects,

the list of options i walked through adds up to $2.2 $2.27 trillion in new tax hikes. that's a bit more than called for by the senate democratic budget outline. recall that outline produced by senate democrats boiled down to $1.73 trillion in cutbacks on tax expenditures, but look at how broad these tax hikes are. they hit big chunks of the 49% of american households who pay income taxes. take a look at the chart again. this is a chart that confirms what many of us have suspected. though they might not come clean about it, when you look at the code and you look at our deficits, there is only one place for democrats to go if they are going to close the deficit their way, with no meaningful spending reductions. they are going to have to hit tax expenditures and specifically those that benefit middle-class itemizers. they hit residents of blue states.

they hit seniors. they hit everyone who owns a life insurance policy. they hit everyone who takes an itemized deduction for giving to their church, local food kitchen or other charities. they hit everyone with a mortgage and everyone who receives a child tax credit and anyone with capital gains. they hit middle-income families and students who benefit from education tax benefits. they hit those who save for retirement and they hit those folks who start up businesses and take a future profits' interest in the form of a capital gain. but to hear the president talk, you'd think we could get there by taxing corporate jets and yachts. i'm accustomed to the media carrying the water of liberal politicians, but there has been a real dereliction of duty in allowing president obama to get away with this. even at this late date, he is still getting away with it. he has no plan. tell me -- he has no plan. show it to me. he talks about his plan but we have yet to see it in writing.

in fact, there is no plan. the press ridiculed richard nixon for his secret plan to end the war in vietnam, but here we are in a catastrophic crisis and president obama gets a pass when it comes to his secret plan to balance the budget? to suggest that a debt crisis triggered by $14.3 trillion in debt can be fixed by taxing the luxuries of evil rich people is so childish and lacking in seriousness that the president should have been called out on it immediately but he wasn't. he was allowed to get away with it. mr. president, president obama's balanced approach -- he talks about balanced approach all the time -- one that includes no meaningful reductions to his historic levels of spending, is a plan for economic stagnation and national ruin. and it is a plan to bankrupt seniors. he wants shared sacrifice from whom? we've just shown that the middle class is going to get hit the

hardest. i once shared prosperity by cutting back on spending and getting the federal government out of most of our lives in ways that are intrusive and cost -- costly to being able to get jobs and raise jobs and do what has to be common this country. well, it's a plan to bankrupt our seniors. the president knows this, as do his colleagues in congress. he knows that his supposed plan does nothing to fix the long-term trajectory of his deficit spending. so the question the folks need to ask is: what is he hiding? how does the left plan on closing the gap and balancing the budget their way? the answer is the elimination or reduction of tax expenditures, and that means middle-class tax increases. mr. president, here my friends on the other side -- to hear my friends on the other side you'd think the only folks hit by tax increases will be corporate jet owners, yachtsmen and millionaires. but when you peek behind the rhetorical curtain, you'll find that does not pan out.

most of the tax base is in the middle and upper middle-income families who make up that had 4f americans who are the only ones who really shoulder the burden of the income tax. we know that the recent numbers are the -- the bottom 51% of all households do not pay income taxes. no, it's the 49% of americans who shoulder the burden of the income tax. that's where the money is. and as i've shown with the c.b.o. and joint committee on taxation options, that's where you have to go. without a counterbalancing rate cut, this version of tax reform means fewer resources for homeownership, retirement savings and charitable giving. but don't say i did not warn you. those who want to treat tax expenditures as some abstract budgetary honey pot risk having the folks that make the honey, the tax-paying bees, to rightfully sting you. as one who hails from the beehive state, i can tell you, you will feel the sting.

mr. president, i yield the flo floor. mr. whitehouse: mr. president? the presiding officer: the senator from rhode island. mr. whitehouse: thank you very much, mr. president. i'm here this afternoon to discuss our work towards addressing the national debt and staving off a collision with our debt ceiling or a default on our financial obligations. first i'd like to commend majority leader reid for putting forward a proposal which would make a very serious $2.4 trillion down payment on deficit reduction and, most importantly, end the impasse over the debt ceiling. i encourage my republican colleagues to support it or offer some reasonable changes

that would allow them to support it. but let me also address some developments on the other side of the capitol, where an extremist group of house republicans are continuing their "my way or the highway," what president lincoln called "rule or ruin" approach to these negotiations. amazingly, news reports indicate that pell grants -- pell grants may be put on the chopping block in speaker boehner's latest effort to appease the most extreme members of his party. mr. president, this is getting ridiculous. rhode island's great senator, claiborne pell, first proposed the grants that now bear his name. he envisioned a grant that would enable low-income students to

attend our country's wonderful colleges and universities so that they, too, could share in the american dream. why do these far right extremists in the house want to snuff that out? in 1976, the first year that pell grants were fully funded, a full pell grant paid 72% of the cost of attendance at a typical four-year public college. today a full pell grant covers just 34% of those costs. even that they're willing to attack. this vital assistance from pell grants can often mean the difference between being able to attend college or not, with many families in rhode island and across america still struggling in this struggling economy, we should be looking for ways to

strengthen pell grants, not weaken them. america needs more college graduates, not fewer. during my time in the senate, we've taken steps to improve the pell grant program. after four years of level funding under president bush, we began to increase the maximum grant from $4,050 in academic year 2006-2007, to $5,550 for this coming academic year. we also increased the minimum family income that automatically qualifies a student for the maximum pell grant, a change which better reflects today's economic realities. despite the clear need for continued investment in our future through pell grants, a need that has long had bipartisan support and backing, a group of house republicans this year began an outright

assault on pell grant funding. these grants are needed more than ever as the economic downturn has led more people to seek higher education in an effort to find a job. but not to this banned of extremists. the house republican budget would have slashed pell grants, reducing the average award by $1,775 and cutting off more than 1.3 million americans, including nearly 5,800 students in rhode island. i understand the need to find savings in the federal budget and to make difficult choices, and leader reid's proposal offers up $2.4 trillion worth,

but we could also make bad choices in going about this. and of all the bad choices we could make, cutting pell grants is among the worst. america needs a highly trained work force, and pell grants help make the promise of a college education a reality. after america spoke out and the senate defeated the extreme house republican budget, i hope that the assault on the pell grant was -- i'd hoped that the assault on the pell grant was behind us, at least for awhile. yesterday, however, "the hill," a newspaper here in washington, reported that some republican house members are opposing speaker boehner's debt ceiling increase bill over funding it provides for pell grants. in this article, someone called

pell grants welfare. some welfare. helping kids afford college and pursue their dreams. today there's talk that cuts to pell grants are being discussed as the pound of flesh required by the most far right members of the speaker's caucus as the price of supporting his bill. remember that these house republicans continue to protect every tax giveaway to special interests, every one, while they want to cut off access to college for regular kids. the simple fact is this. pell grants help lower-income people achieve the dream of college and improve those young people's prospects for careers and employment. it's good for them and it's good for america. the pell grant program doesn't

give a free ride but it does give a boost up, and it's a wise investment in the future of our country, a future where the fates of nations will depend on the educations of their people. earlier this week, student and education advocacy organizations, including the education trust, campus progre progress, the national council of la raza, and the united states student association joined together to save pell. i applaud their advocacy and commitment to fighting for pell grants. and i am proud to join their effort. i strongly urge the far right extremists who are pulling their party, the house of representatives and this country over the cliff to end their reckless attack on the american middle class, take the victory

you've been offered and stop the damage. ronald reagan in eight years i believe raised the debt ceiling 18 times. the tea party has been here six months and has put the country on the brink of default, days away. instead, i ask my colleagues to work with democrats on a bipartisan solution that does not attack the fundamental underpinnings of a successful middle class, like medicare, like social security, like pell grants. avert the looming debt ceiling collision and reduce our deficits. thank you, mr. president. i yield the floor. mr. whitehouse: i note the absence of a quorum. the presiding officer: the clerk will call the roll.

quorum call: quorum call: