well, because with the lower rate, people sold more assets and created more economic activity. capital gains tax rates increased by between 37% and 114% over four years. and that's after inflation. by contrast, after a capital gains rate increase took effect in 1987, that was just talked about a moment ago, capital gains revenues actually dropped 55% over the next four years. so we can debate about what the rate ought to be, but the fact is to say that there's going to be a direct correlation between raising that rate and more revenue simply is not borne out by historical experience or by common sense. third, unlike other types of income, capital gains are often double taxed. think about a typical capital investment, someone buying corporate stock. that's the most typical one. holding that stock for over a

year -- you've got to hold it for over a year -- and then selling it for a profit. that gain has already been subject to the 35% rate at the corporate level. it's then followed by the capital gains rate now at 15% when the shareholder sells. for a combined 45% tax on that capital investment. by the way, with global competitors like canada, japan, united kingdom and others moving to cut their corporate tax rates in order to attract jobs, this new tax on capital investment would move the united states further backwards in terms of being competitive in the global economy. our corporate tax rate is already higher than all of our major foreign competitors, as of april 1, japan lowered theirs making us number one in the world and something you don't want to be number one in, which is the highest corporate rate. we don't need new barriers to growth and job creation, and that's what will result. instead of an election-year gimmick that won't help the economy, it's time to focus on fundamental tax reform to make american businesses and workers

more competitive. again, as the president's own simpson-bowles commission has recommended, as the president's own jobs council has recommended. i agree with what former clinton budget director alice rivlin said about the buffet tax, which is that the way to fix the tax code is to fix the tax code, not to add another complication at the margins. the buffett tax is an election year distraction. why not focus on the elephant in the room? an outdated and complex tax code that is hurting our economy, weighing down our economy, making it harder for us to get out of the kind of doldrums we're in right now with this weak recovery. i believe there is a consensus among economists and serious thinkers across the spectrum, republicans, democrats, independents alike, that an increasingly competitive global economy, we'd have to reform our tax code to help us get out of this rut we're in, this

historically weak recovery that leaves too many people vulnerable, too many parents wondering if the future is going to be brighter for their kids and grandkids as it was for them. i believe there's also a growing bipartisan consensus about how to do it, tkhas we ought to do -- which is we ought to do it by broadening the base, getting rid of growing credits and deductions i talked about earlier. lowering the marginal rates on american families and on our businesses to be able to create jobs. that will ensure that those who can afford to pay more will pay their share, their fair share. and the economy will grow. rising tide lifting all boats. truly helping families who are worried, for good reason, about their economic future. mr. president, the american people don't deserve more gimmicks as we'll see this week in washington. they deserve real leadership. thank you, mr. president. i yield the floor.

mr. whitehouse: mr. president? the presiding officer: the senator from rhode island. mr. whitehouse: mr. president, while we are waiting for the next senator to arrive and be recognized, i just wanted to respond to a couple of the statements that have been made recently on the floor. it's interesting that my republican colleagues tend to refer to this as a tax gimmick. it was referred to as tax gimmick week because we're considering having people earning $250 million pay a rate equal to what a truck driver pays. that doesn't sound very gimmicky to me. that sounds like pretty main street fairness to me. the bottom line is there is a gimmick at stake. gimmick at stake. >> the bottom line is there is a gimmick at stake. a it is the gimmick in the taxriv. code that allows for it to take, place. it allows for a hedge fund billionaire to claim a lower

tte than a truck driver.'s beet if there is a gimmick here, it is the gimmick that we are trying to remove. it is not a gimmick that we are trying to pursue. a it has been said that this is an tax on investment and if our purpose should be how to add back the jobs lost in the recession, we just passed a highway bill with 75 senators supporting it, only 22 opposed, which as we know around here in this partisan environment, is a landslide. it came out of the environment and public works committee unanimously. it had 40 amendments accepted. and now three million jobs are bottled up on the other end of this hallway in the house of representatives because the republican speaker doesn't want to use democratic votes. if you want to do something about jobs, tell the republican speaker to pass the senate highway bill. it's as simple as that.

three million jobs, bipartisan. so when we talk about jobs, i've got a really good recommendation. pass the big highway jobs bill that's being kept bottled up here. senator harkin, do you seek recognition now? the other point that i wanted to make on the question of whether the tax system is really progressive or not, the i.r.s. and the federal reserve point out that for the top 1% in america, the top 1% in terms of wealth control 33.8% of the nation's wealth. the top 1% in taxes pay only 28.3% of the taxes, when all taxes are taken into consideration. the top 5% control 60% of the nation's wealth. but the top 5% in taxes only pay 44.7%. so if you want to take numbers

sort of without context, you can make it look as if it's very progressive. but when you measure against the wealth and inequality in this country and income inekwult in this country -- equality in this country it is hard to say we're running a progressive tax system. that is why as reuters reported, about 65% of taxpayers who earn more than $1 million face a lower tax rate than the median tax rate for moderate income earners making $100,000 or, less ÷ year. according to the congressional research service.

>> what do you? how do you interact with the white house and the ftc and etc.? >> we are a branch of the department of commerce, or by statute we are the advisors to the president on communications and information policy issues. the sec, of course, is an independent regulatory agency reporting to congress. but many of our issues intersect

with the fcc. i work on spectrum, i work on broadband. we work closely with the sec and have an overall good relationship with the commission's. >> you mentioned spectrum. there was a recent report that came out were you recommended how to free up 95 megahertz of spectrum. >> what's involved with that? who owns that now or who uses that now? is that unused? what was going to be involved in free meta? >> as you will recall, the president in 2010 charged both nti and the sec work to find 500 megahertz of spectrum to reallocate to commercial broadband use. the report we released a couple of weeks ago focuses on one particular band of 95 megahertz of spectrum. almost a fifth of the president's goal. the band is currently used by about 20 federal agencies him and they each have a total of 3000 assignments of spectrum

within that band. what we're looking at is what's involved in reallocating that ban to commercial use. what we allocated was an entire band to commercial use, but to do it the traditional way, which is to be low -- relocate and cost $18 billion and take 10 years, we thought that is too much and too long. what we have proposed is that we move forward and work in tandem between industry and the federal agencies to figure out if there is a new paradigm that we can apply here that leaves some number of these federal operations in place and allows the commercial providers to come in and share that spectrum with the federal users. we think we can make the spectrum available faster and more cheaply if we follow that approach. we are about to sit down with industry and with the agencies

to have those discussions. >> there were some dod concerns. they used some of that spectrum. how is that address? >> dod is a very complex user of that spectrum. one, in particular, is the air combat system. these are systems that are embedded in the skin of aircraft while pilots are doing their training runs in the sky. there is a stream of data being transmitted to the ground, which provides almost instantaneous feedback to the pilots when they get back. they come out and they are able to get a review and critique of their performance based on use of this information that is transmitted. that system alone would cost, according to dod, about five hundred dollars if we were to put in a new transmitter system. that is a perfect example of a system we would like to explore. how could we leave that in place and let it use the spectrum it

currently uses, for the most part, that system doesn't use spectrum in our major metropolitan areas, so there may be a way that we can leave the system there and allow the commercial folks to come in and use that same spectrum -- sharing it with the federal agencies. these are issues we need to explore with the agencies and with industry, and those are the discussions we want to get underway as quickly as we can. >> join our discussion with larry stripling of the national telecommunications administration is jasmin melvin, who is that telecommunications reporter for reuters to thank you. in terms of your latest proposal and the emphasis on sharing the airways between government and commercial users, the ctia has said that while they know some sharing is inevitable, their hope is that the primary goal would be to clear as much of the band as possible for solely

commercial use. what is your thinking in this area? >> that is the way we have done in the past. in the past, the solution was always to move the federal agency somewhere else and allow the commercial provider to take the exclusive use of the spectrum. we just don't have the ability to do that much any longer. part of the problem is that would use is growing. just as the commercial demands are increasing, so, too, are the needs of federal agencies to perform the emissions they carry out. aerial drones is a good example of a system that didn't exist as a spectrum user 15 or 20 years ago, but increasingly, these systems are being put into operation, not just in areas of europe, but in the united states. we just don't have places to move the federal agencies to any longer. so we have to find a way to coexist or and allow industry

and the federal agencies to use the same spectrum. the way we can take advantage of it is the fact that the federal agency use is somewhat intermittent. more portly, it doesn't involve the entire country at any point in time. advances in the new cellular technologies, particularly lge, offer an opportunity for the commercial industry to apply this new technology and eager to operate in an environment where they don't have the exclusive use of the spectrum any longer. we know that industry was interested in the bottom 25 megahertz of this megahertz band, the 1755 band we reported a couple of weeks ago. but our goal is to find 500 megahertz of spectrum as the president asked, and indeed, we are hearing from industry that they think they need will be greater than that. from our perspective, we had an opportunity to put 95 megahertz

of spectrum on the table and bring people together with this new paradigm of spectrum use. we thought that was the responsible thing to do. to try to continue to do it the way we have done it before and put another incremental 25 megahertz on the table, it would not have met the president's goal. frankly, it would have been an irresponsible way for us to proceed. when we had the federal agencies willing to talk about accommodating commercial use in all 95 megahertz of the spectrum. >> with the school of getting 500 megahertz, the goal is to get within the next decade. how soon do you think consumers will start to really feel the effects of this spectrum crunch? >> the congress and the payroll tax holiday extension act is directing the fcc to conduct a number of options within the next three years, with the idea that that spectrum would be in the marketplace probably within five years. last year, we identified 115 megahertz of spectrum

through our fast-track review, which we felt could be made available within five years. the fcc is making evaluations as to when that will be available. i do think consumers and industry will be able to take advantage of the spectrum within five years. overall, the goal was to have it made available within 10 years. >> okay. you mentioned the payroll tax compromise verdict that included legislative language for a public safety network that would give some airways to create a nationwide broadband network for first responders. what will be nti's role in that? >> it would be an independent authority within ntia,

consisting of a board of 15 people, including the attorney general, secretary of homeland security, and the head of omb. their mission will be to design, build, and operate a national interoperable public safety network. this is something that we have known has needed to be done for years. it was a recommendation from the 9/11 commission to improve the interoperability of these public safety commemorations. frankly, we owe it to our first responders to give them a modern communications network. that is exactly what this legislation does. congress created and put it under ntia and indicated that $7 billion from auction revenues would be made available to first night to go ahead and design and construct this network. we are in the process right now of putting together the board. the board has to start its operations this summer, and then

get on with this very large complicated task of getting the network built. >> larry stripling, when looking for the 500 megahertz of spectrum, do you foresee using broadcast spectrum at some point were recommending that that be shared as well? >> that is within the jurisdiction of the federal communications commission. another landmark of recent legislation was to give the fcc the authority to conduct incentive options, which they are now organizing to do. this will involve providing broadcasters an opportunity to make their spectrum available for auction, and then they will share in the proceeds of that. that will be handled at the sec's. >> so ntia does not have a role in the spectrum auctions? >> no, that is handled at the fcc. >> the spectrum that we are identified in four reallocation for federal use, the idea is

that much of that spectrum can be considered for the fcc. in addition, there is an opportunity to look at some spectrum that might be made available for unlicensed use in the legislation that we have been talking about. congress directed us to take a look at a couple of bands in the five gigahertz range, which is typically higher than what the commercial cellular industry reviews today. but we are going to be studying that with the legislation with an idea that might be made available for unlicensed use, which would allow anyone to come in and use that to try out new technologies, new ideas, which, of course, is what led to the development of wifi in this country. that was a result of the use of unlicensed spectrum. thankfully, i don't think any of us, including the existing cellular carriers, could exist without wifi that is available today at.

>> i understand he do play a role in military and government spectrum. this got you involved in the regulatory review of phil falcone's lightsquared. i know you're able to use -- you were recommending in february no easy solution to interference, cost with gps. do you see any way that the lightsquared situation could be resolved? >> that is now a matter before the fcc. our role was to service the honest broker of the competing lab and testing report. the testing was conducted last year into separate charges. the first, being the first pass of the year, then after lightsquared proposed modification in its operating structure, we did a second test. the government ran a second set

of tests in the second half of the year. we were trying to determine the extent to which the lightsquared operations would interfere or overload gps receivers. our technical evaluation concluded in february that as currently planned, we cannot could not find a way to solve the interference issues. and still leave lightsquared with what it deemed to be a viable network. we did take, the test results that emerged out of testing last fall, and use that data to combat the lightsquared with an option as to how they could proceed to build, without causing interference or overload to the gps receivers, but quite reasonably, they looked at it and concluded that because it would involve ramping back the power of their network, it did not leave them with a viable commercial network. that left us where we had to end

up. given the state of technology as it exists when we did the testing. going forward, we certainly believe that part of the issues involved receiver specifications and receiver standards. we are going to initiate an effort with the federal agencies to look at the extent to which we could develop receiver specifications for future procurement by federal agencies of gps receivers that would avoid the kind of interference that they otherwise would've suffered from the lightsquared operations. that is a five, 10, 15 year ever, and it only handles devices by federal agencies. we have no ability to deal with the larger commercial base. we think it is a step forward. we do think that the question of evaluating how receivers perform is a necessary part of the

larger question of where do we find 500 megahertz of spectrum? if we are going to run into situations where receivers prevent us from using broadband, we will have a very hard time meeting the president's goal. in longer-term, this has to be part of the solution. >> in a recent interview with the "washington post", phil falcone talked about how his situation with lightsquared could put a damper on future innovation and ways to make the spectrum more efficient. what are your thoughts? >> i think we had a very unique set of facts and a unique situation with with the lightsquared issue. the spectrum that they had purchased -- the spectrum that is directly adjacent to gps, anytime you are putting a high-powered, land-based cellular radio service next to one that is depending on much

fainter signals from satellites, you're going to have potential issues. we worked as hard as we could, and all the federal agencies worked hard to really understand and evaluate how those two very disparate types of systems could coincide with each other, all we could conclude was that based on current technology, we couldn't see a path forward that was going to be helpful in the business needs. >> larry stripling is our guest on the show "the communicators." he is the administrator and assistant commerce secretary for communications and information, argus reporter, jasmine melton of reuters. >> is following up on the lightsquared issue. the company has said that if the federal communications commission were to pull the authority previously given to the company to build its network, they would collect a bait and switch by the

government of historic scale. do you believe that the government and the lightsquared preceding? >> this is really a matter over the sec. i am not in a position to comment on those sorts of allegations. >> the company has proposed several things, including swapping it interfering spectrum. do you think there is any spectrum that npi manages that would be available for the scots were not. >> again, that is a matter between lightsquared and the sec. if light squared wishes to put a proposal with them that might involve spectrum used by federal agencies, it would certainly respond any request to work through those issues. i am aware of one band of spectrum that is on the other side of spectrum that

lightsquared has, but that actually is a shared band that is used by federal agencies as well as commercial aerospace companies. again, i think one of the first questions that would have to be addressed the extent to which companies such as boeing and sherialyn byrdsong's and those who make use of that spectrum would be able to consider swapping their spectrum. and if there is spectrum they could move into. in the first instance, that is the question for the sec. we are here and willing and able to support if they want to move forward. >> larry stripling, switch topics. the white house introduced recently to privacy bill of rights. what is your current thinking on how consumers data should or could be used? >> the privacy effort is one that we started earlier and demonstration. first we did a green paperback in 2010 and followed on with the administration's blueprint that came out in february.

what we set forth is a plan that we think both protects consumer privacy, but just as importantly, protects and promotes innovation on the internet. from the start, we were concerned about those being in conflict. but if you regulated in favor of privacy, and you might damage or deter innovation. we know that american companies that are most innovative on the internet, it would be a big loss to our overall economy and innovative position if that were deterred through heavy regular share. that was paramount in our thinking throughout this process. but we ended up proposing and what the administration has set forth as the plan is to enunciate some very specific privacy principles. those are the seven elements of our consumer bill of rights. they are very straightforward,

declarative sentences of what consumers have a right to expect. we really did model it against the constitutional bill of rights. then we had a choice. what we could have proposed was that those basic principles be taken and handed off to a regulatory agency for a lot of detail making and creating of definitions. but that we felt good lead to the outcome we wanted to avoid. which was heavy-handed regulation, descriptive or prescriptive regulation that would actually, by not being able to predict where technology will go, it would hamper innovation. our solution was let's let the private sector will in the gaps. let's bring industry together with all the other relevant stakeholders, including the consumer groups, academics, and others come and take these pencils and apply them to specific situations through the

creation of what we call voluntary but enforceable codes of conduct. that is a process we are going to manage that ntia. we just concluded a comment. were we asked industry as well as the consumer groups what topics we should take on what these codes and what process we should use. one of the issues will always be if you don't have someone making the decision at the end, how do you know and how do you reach consensus? how do you ensure transparency? how do you ensure that people have pulled visitation rights? >> these are things we want to get right. the they are just as important to the success of this effort is what we end up, which is the actual substance of a particular code of conduct. again, we are focusing on what we think is creating important protections for consumers in