with controlling the economy. they now want to control to an even greater degree than is currently the case, the political process as well. and that's what these campaign contributions of hundreds and hundreds of millions of dollars are about. when i think bac -- when i back on the history 6 -- history of this country and the enormous sacrifices that men and women made, the entire world looked to the united states for what a strong democracy was about -- one person, one vote. in my state we have march meetings. one person, one vote to discuss the municipal town budget, to discuss the school budget. and now we have evolved to a situation where one family can spend $400 million buying politicians, buying elections. that is a long, long way away

from what democracy is supposed to mean in this country. so, mr. president, the disclose act is a very important first step forward, and i hope that we can get strong support for that important piece of legislation. and with that, i would yield the floor. mr. whitehouse: mr. president? the presiding officer: the senator from rhode island. mr. whitehouse: mr. president, senator murray will be here shortly, and when she does arrive, i will promptly yield to her. but i wanted to take the time prior to her arrival to follow up a bit on what i said i would do earlier, which is, because this has been in some respects half a debate -- other than my friend, senator mccain, who has courageously fought on this issue for so many years, we have not really heard very much from

the other side of the aisle here. and so in some respects it's only half of a debate. in another respect, of course, it's no debate at all because we are in a filibuster situation with the republicans blocking us, actually going to the senate debate on this bill. so while it's debate in the lay sense of the word, it is a discussion; it is not senate debate on the floor because we stand here being filibustered with a majority of senators that demonstrably support going to this bill. but i said that i'd describe some of the things that my republican colleagues have said in the past about disclosure. and so let me begin doing that. senator mcconnell, of course, has been very publicly in favor of it. that may relate to the fact that a report by the -- hang on, let

me get the name on the front page -- corporate reform coalition went state by state, and the republican leader's home state of kentucky has a ban on independent expenditures by corporations in its state constitution. his state constitution bans the conduct that is at issue here. kentucky has disclosure provisions that require disclosure when independent expenditures of over $500 are made in any one election. here's here objecting to a $10,000 limit, and kentucky disclosure provisions, according to this report -- quote -- "require disclosure when independent expenditures of over $500 are made in any one election." and if further requires under kentucky law, kentucky statutes

121.190 subpart 1 that the name of the advertising sponsor must be put on any communication. so consistent with the laws of his home state, our republican leader has for many years stood out in favor of disclosure. he said, "republicans are in favor of disclosurement. " around 2000 he said that. and he said "public disclosure of campaign contributions and spending should be expedited so that voters can judge what is appropriate." other leaders have said, "i support campaign finance reform. to me, that means individual contributions, free speech, and full disclosure." in other words," he continued, "any give can give whatever they want as long as it is disclosed every day on the internet." that is exactly what this bill

does, but only for donation dons $10,000 and more. i don't believe there was a floor in senator alexander's remarks. so i see that the distinguished senator from iowa has arrived. and in the spirit of going back and forth, i will yield the floor. a senator: mr. president? the presiding officer: the senator from iowa. mr. grassley: last september president obama responded to amnesty proponents denying that he had authority to unilaterally grant special status to individuals who may be eligible under the dream act. the dream act has been around the senate for discussion for about a decade, and in different forms. it's been voted down several times by this body, and mostly because the leader won't allow for an amendment process to improve the bill.

otherwise it probably could have been worked upon. when asked by amnesty advocates to push the bill through executive order -- this goes back to a few months ago -- president obama said this, and i quote, "this notion that somehow i can just change the laws unilaterally is just not true. the fact of the matter is, there are laws on the books that i have to enforce, and i think there's been a great disservice done to the cause of getting the dream act passed and getting comprehensive immigration passed, perpetrating the notion that somehow, by myself, i can go and do these things. it's just not true. we live in a democracy. you have to pass bills through the legislature and then i can

sign it." end of quote of president obama. september last year. but just one month ago, president obama continued his "we can't wait" campaign and circumvented congress, again to significantly change the law all by himself on june 15, he announced that the department of homeland security would lay out a process by which immigrants who have come here illegally could apply for relief and remain in the united states without fear of deportation. so now what has changed in the last nine months, when the president of the united states said last september that he could not unilaterally do amnesty? before i dive into the details of how poorly planned and

implemented the directive of june 15 will be, i have to question the legal authority of the president to institute a plan of this magnitude. i, along with 19 other senators, sent the president a letter and asked if he consulted with attorneys prior to this june 15 announcement about his legal authority to grant deferred action and work authorizations to a specific class of immigrants who have come here illegally. and it's important that we get that question answered because, just last september, the president said he didn't have the legal authority to do it. we asked the president if he obtained a legal opinion from the office of legal counsel or anyone else within his administration. to date, we have not received any documentation that discusses any authority whatsoever that he has to undertake this massive immigration directive.

i know that the secretary of homeland security has discretion to determine who is put in removal proceedings. prosecutorial discretion had been around for a long time, but it hasn't been abused to this extent. the president is claiming that the secretary will implement this directive using prosecutorial discretion. however, millions of immigrants coming here illegally will be instructed to report to the u.s. citizenship and immigration service and proactively apply. this is not being done on a case-by-case basis, as they want to make it appear. the president's directive is an affront to our system of representative government and the legislative process, and it's an inappropriate use of executive power. based upon what he said last september that he didn't have the authority to do this.

the president bypassed congress, because he couldn't lead an immigration reform, and he couldn't work in a bipartisan manner on an issue that involves undocumented young people. the president's directive runs contrary to the principle that american workers must come before foreign nationals. his policy only increased competition for american students and workers who struggle to find employment in today's economy, and that unemployment is 8.2%, official. 11% or 12% unofficial. according to the bureau of labor statistics, the unemployment rate among this age group 16-24 has been nearly 1 7% for the last year. according to a gallop poll, 2 2%

of the 18-year-olds if not unemployed are underemployed. the president's plan to get people back to work is to grant immigrants who come here illegally a work authorization. he must be seriously out of touch, if he doesn't think there's competition already for american workers. now, i'd like to talk about how poorly this directive has been thought out. this is the implementation of a directive the president said he didn't have the authority to do in the first place, but if you're going to have an illegal directive, you ought to at least now that it will work. it is my understanding the white house informed the homeland security officials of this plan just days before it was announced june 15.

they were unprepared and have since been scrambling to figure out how it will be carried out. u.s. citizenship and immigration service, the agency in charge of all immigration benefits, including work authorizations, visa applications, asylum petitions, and employment verification for employers, will be the agency tasked with handling millions of new applications for deferred status and work permits. agents in the field are confused as to how to do their jobs and fear retaliation if they don't do the right thing. 10, in essence -- so, in essence, the white house is telling agents in the field to begin a practice called "catch and reels release." just last friday, homeland security officials briefed the judiciary committee on the

directive. staff of the judiciary committee was told that agents of the agency would be required to release immigrants who come here illegally if they fell into the criteria laid out. but what are the ramifications if an agent does not release them yo but instead uses their discretion to say the person was not eligible and put them in removal -- removal proceedings? well, you'll be astounded by the answer we got, because the department of homeland security explained that such an agent would be subject to disciplinary action. disciplinary action if you're doing what your job is requiring you to do in the agent's actions would be considered during the annual personnel review.

so there will be no discretion for agents, and they will be forced to give deferred action to anyone that comes close toss the criteria laid -- close to the criteria laid out, even despite their hesitation to do so, or face retaliation from bureaucratic higher-ups. it is as if homeland security forgot their mission, which is, quoting the law, to ensure a homeland that is safe, secure, and resilient against terrorism and other hazards where americans' interests, aspirations, and way of life can thrive. end of quote of the law. once we overcome the question of legal authority and the reality that there was little thinking put into this plan before it was announced on june 15, we're left to oversee the details of the

implementation plan. homeland security officials say that they will have a process laid out by august 15. we have very little details, but homeland security officials did some insight on friday in this briefing to members of the judiciary committee staff. here's what we learned. we know that people under the age of 30 who entered before their 16th birthday will have been here for at least five years and are currently in school may qualify for deferred action. we know that there are caveats to the criteria. some criminal offenses will be okay, and young people can finish their education after they are granted deferred action. we know that individuals with final orders of removal will be eligible for deferred action. we know that these people will

not have to appear for an in in-person interview to benefit from this directive of the president of june 15. we know that this'll be granted this special status for two years, and those that are denied will not be put on removal proceedings. we know this isn't aimed at helping just youth since the age limit is 30, so who are we going to help over age 30? because we thought by the president's announcement that if you're over 30 years of age, nobody's going to benefit from this. we know that people under the age of 30 are not the only people going to be considered for relief. secretary napolitano said so herself. she told cnn's wolf blitzer the following -- and i quote -- "we have internally set it up so that the parents are not referred for immigration enforcement if the young person

comes in for deferred action." now, i wasn't born yesterday. this administration is going to give a benefit to immigrants here illegally and then force his or her parents to leave the country, which begs the question: what will they do if the young people are eligible and receives deferred action but the parents is a criminal, a gang member or a sex offender? because this program hasn't been well thought out and because it's being rushed to benefit people by the end of the year, there's no doubt that fraud will be a problem. how will federal officials who process the applications ensure that information provided by the individual is accurate? how will they verify that one truly entered the country before

the age of 16 or currently under the age of -- or are currently under the age of 30? homeland security officials act as though they're prepared to handle the influx of counterfeit documents that will be present presented. the department officials are going to rely on their small fraud detection unit who happen already to be very busy working every day on other types of immigration benefits, to determine if people are truly eligible. what will be the consequences for individuals who intentionally defraud the government? they need a fraud and abuse prevention plan. without one, they'll likely legalize every single immigrant coming here illegally who are already on u.s. soil. the administration will announce more details about this plan in

the next few weeks. i'm anxious to see if they plan to only provide deferred action to this population. department officials refuse to elaborate on whether some of these individuals will be able to get advanced parole. that's a special status that allows the immigrant coming here illegally to adjust to permanent residence then gain citizenship. this administration wants people to believe that this isn't amnesty and that these people will not have lawful status. but i'll be watching to see if they try to pull the wool over our eyes and provide a status that allows these people to adjust and remain here permanently. finally, a major flaw in the president's plan is how this is going to be paid for. a massive amnesty program is going to cost a lot of money. so what are the taxpayers going to have to cough up out of their hard-earned dollars to pay for it?

department officials said on friday that illegal immigrants may not be charged for their special status. the individual would be charged $380 if they choose to apply for a work authorization. they could not assure us that funding would not be redirected from other programs to this initiative. to -- to reprogram funds within the department, the secretary must notify and gain consent of the majority and minority leaders of the appropriations committee. however, when pressinge pressed, department officials could not assure us that they would not bypass the long-standing process and reprogram dollars on their own. the u.s. citizenship and immigration service will be forced to concentrate on this program, leaving employers, foreign workers and legal immigrants without the service that they need to work, visitor remain in the united states. if the u.s. citizenship and

immigration service adjudication staff will be diverted from their normal duties to handle the millions of potential deferred application applications, this can only have a devastating impact on other programs within the department. i fear that this plan will bankrupt the agency that oversees immigration benefits and it will affect all legal immigration for years to come. so, mr. president, i fear that the president has overstepped his authority again. the president time and again has shown no leadership or refused to work with congress on issues that directly impact the american people. and when it comes to the immigration issue, he promised the people in the 2008 election that in his first year in office, he would have an immigration bill before congress and he hasn't even presented an immigration bill yet. he insisted that he was coming here to change washington but he

changed for the worst. he insisted that he was going to make this the most transparent administration ever, but congress and the american people are left in the dark. no matter where one stands on immigration, we should all be appalled at how this plan has been carried out. whether it's legal or illegal is one thing, but when it i it isnt thoroughly thought out how it's going to be implemented is not a chief executive of a major operation like the u.s. government ought to be acting. we should all be concerned that our votes are rendered meaningless as a result of the assumption of power on june the 15th that the president said last september he didn't have. until we can end this plan, i encourage my colleagues to watch over its implementation for the future of our country. the integrity of our whole immigration system is hanging in the balance. and this immigration system is very important, because the united states have open doors -- opened doors for more people than any other country in the

world to come here legally. and about a million people come here legally. so we're a welcoming nation. we're a nation built upon immigrants bringing new ideas to this country, making this a very not only colorful country but a dynamic society. and we ought to leave it that way. but this jeopardy to our immigration system for people to come here illegally jeopardizes a lot of people that want to abide by our laws and come here and make our country even richer. i yield the floor. mrs. murray: mr. president? the presiding officer: the senator from washington. mrs. murray: mr. president, i come to the floor today to speak in strong support of the disclose act, which will help put an end to secretive campaign spending and close the glaring campaign finance loopholes that have been opened up by the citizens united ruling. mr. president, i want to thank the senator from rhode island for his tremendous leadership on

this really critical issue and all the work he's gotten to us -- to this point he today on this very -- point today on this very important bill. mr. president, this supreme court ruling was truly a step backwards for our democracy. it overturned decades of campaign finance law and policy and it allowed corporations and special interest groups to spend unlimited amounts of their money influencing our democracy. the citizens united ruling has given special interest groups a megaphone that they can use to drowned out the voices of citizens in my home state of washington and across the country. the disclose act would return transparency to this process, it would return accountability to this process, and it would be a major step to returning citizens' voices to the important election decisions that we make in our country. mr. president, this is a very

personal issue for me. when i first ran for the senate back in 1992, i was a long-shot candidate without a lot of money or wealthy corporate backers. but what i did have was an amazing and passionate volunteers who were at my side. they cared deeply about making sure the voices of washington state families were represented. they made phone calls, they went door to door with us, they talked to families across our state who wanted more from their government. well, mr. president, we ended up winning that grass-roots campaign because the people's voices were heard loud and cle clear. but, to be honest, i don't think it would have been possible if corporations and special interests had been able to drowned out their voices with this unlimited barrage of negative ads against candidates who didn't support their interests. so that's why i support this disclose act. i want to make sure no force is greater in our elections than

the power of voters across our cities and towns. and no voice is louder than citizens who care about making their state and country a better place to live. mr. president, the disclose act of 2012 shouldn't be contentio contentious. it simplely does what a majority -- it simply does what a majority of american people view as a no-brainer. it requires outside groups to divulge their campaign-related fund-raising and spending. plain and simple. and it does this by shining a very bright spotlight on the entire process and by strengthening the overall disclosure requirements for groups who are attempting to sway our elections. you know, too often corporations and special interest groups are able to hide their spending behind a mask of front organizations because they know voters will be less likely to believe ads if they knew the motives behind their sponsors. for instance, an indication of who is funding many of these shadow organizations can be seen

in the delayed disclosures of the so-called super pacs. in fact, a "forbes" article recently reported that 30 billionaires -- 30 billionaires -- now back -- are backing romney's super pac. it's unknown how many of these same billionaires or their corporate interests are providing to other organizations with even less scrutiny. disclose act ends all of that. specifically, the act requires any of these front organizations who spend $10,000 or more on a campaign to file a disclosure report with the federal elections commission within 24 hours and file a new report for each additional $10,000 or more that's spent. mr. president, this is a major step in pulling back the curtain on the outlandish and unfair spending practices that are corrupting our nation's political process, and it is a major step towards the kind of open and honest government that the american people demand and

they deserve. the disclose act brings transparency to these shady spending practices and makes sure the voters have the information they need so they know who they can trust. it really is, it's a commonsense bill. it should not be controversial. and anyone who thinks voters should have a louder voice than special interest groups should be supporting our bill. mr. president, this bill aims to protect the very core of our federal election process. it protects the process by which our citizens fairly assess the people who they believe will best come here and be their voice and represent their communities. it exposes the hidden hand of special interests and it creates an open process for who gets to stand here before them representing them. so i'm very proud to support this bill and i'm very proud of the efforts by senator whitehouse and so many others here in the senate. i urge all of our colleagues to vote for this bill. let's move to forward. let's do what's right for

america. thank you, mr. president. i yield the floor. the presiding officer: under the previous order, the senate stands in recess until 2:15 p.m. coming up this afternoon on c-span3 the committee for a responsible federal budget will officially launch their campaign to fix the debt initiative. that is a bipartisan effort that aims to build support

for a debt reduction plan to be passed by congress and signed by the president by july 4th, 2013. speakers include former vice chairman of the federal reserve board, alice rivlin and former debt commission co-chair erskine bowles. we will have it live at 2:00 eastern, on c-span3. federal reserve chair ben bernanke is on capitol hill this week to deliver his semiannual monetary report to congress. this morning he was before the senate banking committee. tomorrow he goes before the house financial services committee. we'll have that hearing live beginning 10:00 a.m. eastern tomorrow on c-span3. >> if i'm president, job one for me will be creating jobs. let me say that again. my agenda is not to put in a place a series of policies that get me a lost attention and applause. my policy will be number one, create jobs for the american people. i do not have a hidden

agenda. [applause] and i submit to you this if you want a president who will make things better in the african-american community, you are looking at him. [applause] you take a look. >> republican presidential candidate mitt romney and vice president joe biden spoke at the naacp national convention in houston. >> just close your eyes and imagine, imagine what the romney justice department will look like. [booing] imagine when his senior advisor on constitutional issues is robert bork. imagine the recommendations for who is likely to be picked as attorney general as the head of the civil rights division or those other incredibly important positions at justice. >> watch their entire speeches online at the c-span video library. >> there has been a

hostility to poverty since the war on poverty. lyndon johnson was the best president and looked at poverty issues and spent money on it and taubed about his social service programs. lyndon johnson, let's follow that, i hate to say this, richard nixon is actually the father of minority business development. an inside his minority business, established the small business administration, minority business development agency and used the term, economic justice. richard nixon. economic justice.

>> washington senator patty murray yesterday said that she and other democrats are willing to let all of the bush tax cuts expire in january if republicans don't agree to a deficit reduction deal that includes significant amounts of revenue. republican leaders responded saying the move would hurt small businesses and that the government would waste any increased revenue. senator murray, a member of the democratic leadership, delivered her speech at the brookings institution here in washington. she is followed by a panel that included bob greenstein of the center for budget and policy priorities. he said congressional democrats have taken this latest approach after getting no new revenue as part of their 2011 debt ceiling agreement. this is an hour and a half.

>> my name is ron haskins. welcome to brookings. we're glad to have you here for this interesting event. you may know we have had a project here since 2004 on the budget deficit. unfortunately none of us can vet or introduce bills. we're always glad to have someone can do both those things not to mention the chairman of the committee to come here and tell us about the deficit and what their plans are. we're very pleased to be doing that. here is a brief overview of the event. i will begin with a brief introduction of senator murray. then the senator will give her talk. then i'm going to ask her a question and the audience will have a chance to ask her one or if we're lucky, two questions. we'll go to a distinguished panel that i will introduce at the appropriate time. the audience will have much more time to ask questions of the panel. so, let me first say the talk today is going to be in part about the so-called, cliff or slope or whatever you want to call it, that

there are a lot of things coming due by january 1st. so just in case there might be one or two people out there who don't know exactly what it is, it includes the bush tax cuts, it includes unemployment compensation extension. it includes the payroll tax holiday. it includes a $1.2 trillion sequester. and a number of other items. many of you are probably familiar with the expression in washington that, i don't have a dog in this fight. there is nobody in washington that doesn't have a dog in this fight. so this is really a big deal. and senator murray will tell you the rest. senator murray. thank you. >> thank you [applause] well, ron, thank you so much for that introduction. i am so glad to be here today to discuss this issue with so many of you who have been working on this for a very long time and i want to thank the budgeting for national priorities project at brookings for hosting you

here today as well as the great members of the panel that you're going to be hearing from shortly and all of you for taking time to be a part of this discussion. as all of you know last august i was asked by majority leader reid to co-chair the joint select committee on deficit reduction, or the super-committee as it was commonly called. this certainly wasn't the most sought-after job in congress as you may imagine. it was probably just a notch below the chair of the dscc but i agreed to do it because i thought it represented a few important opportunities. the opportunity to avoid the pain of sequestration that would be triggered if no deal was made of course. to pass a responsible, long-term deficit reduction plan with a simple majority, guaranteed vote in the house, no ability for it to be filibustered in the senate which is no small deal these days. and also after years of

partisan rancor cull minute nating -- culminating in truly, ugly and absolutely unnecessary debt ceiling battle, the opportunity to finally show the american people their government wasn't broken and we could come together when we needed to. well, as everyone in this room knows the super-committee was not successful and we couldn't come to a bipartisan deal and the reasons for that, the lessons learned from those four months of intense bipartisan talks are absolutely critical, as we face those exact same issues heading into the end of the year and the so-called fiscal cliff. because if we want a different outcome, if we want to come together around a balanced and bipartisan deficit reduction deal, the american people expect and deserve, something is going to have to change. so today i want to talk about the vision, values and

priorities that drive my approach to tackling our budget challenges. and i'm going to contrast that with what i see as the short-sighted and deeply flawed vision that has been dominating the republican party. i will run through how these contrasting visions played out in the specifics of the super-committee negotiations and the recent budget debates and then i will lay out how i see a path forward as we now head towards the end of this year. now my approach to this issue starts with my own family. it starts with a story that probably isn't so different from stories told by families across the country. i was born and raised in a small town of botha, washington, in a big, loving family. my dad ran a 5 and 10 cent store on main street and everyone in our family helped out at the store. my family was certainly not rich but we never felt

deprived in any way way. but when i turned 15, things started to change. my dad, who was a world war ii veteran, was diagnosed with multiple sclerosis. in a few short years his illness got so bad he couldn't work anymore. my mom, who had stayed home to raise a family, had to take care of him, but she also needed a job so she could support our family. she found some work but it didn't pay enough to support me and my six brothers and sisters and a husband with growing medical bills. without warning my family had fallen on hard times but thankfully we lived in a country where the government didn't just say, tough luck. my dad was a veteran. so he got some help from the va for some of his medical care. for several months my family had to rely on food stamps. it wasn't much but it put

food on the table so we could get by. to get a better-paying job my mom needed some training. fortunately at the time there was a federal program that helped her attend lake washington vocational school where she got a two-year degree in accounting and eventuallyly a better job. and my brothers and sisters and i were all able to go to college through federal grants and student loans. like millions of americans, we got by with a little bit of luck, we pulled through with a lot of hard work. and while i would like to say that we were strong enough to make it on our own, i don't think that is really true. i know that the support we got from our government was the difference between seven kids who might not have graduated from high school or college and the seven adults that we have come to be. all college graduates, all working hard, all paying taxes, and all now giving

back to our own communities. so this is the primary prism that i view our nation's budget through. and it is what guides me as i work in the senate to impact the choices that we make. not that government can or should solve every problem. of course it shouldn't and it can't but that we are a nation that is always come together to stand with families like mine, to invest in our people, in our communities, in our future, and to build the most robust middle class the world has ever seen. that a budget is not just numbers on a page. that despite what you may think if you listen in to some of the debates we've been having recently, the word budget is not just a synonym for deficit reduction. it is not just about charts and graphs and trajectories. we often hear about that those are important too but that a budget tells a story of what kind of nation we

are and the kind of nation we want to be. and that it is a statement of our values, and our priorities and our vision. or at least that's what it ought to be. these ideas led to some very clear goals as i went into the super-committee. first i thought everything needed to be on the table when we started. this didn't mean members were supposed to check their values at the door but it did mean we had the best chance of success if members didn't rule out any changes to entire swaths ever the federal budget before we even began. second, i felt very strongly that any deal has to be balanced and include both spending cuts and new revenue. the middle class and vulnerable americans had already sacrificed so much. they lost their homes, the value of their home. they lost their jobs. they lost their life savings.

they should not be called on to continue bearing the burden of deficit reduction alone. third, i wanted to make sure we didn't let the very real need to tackle our deficit and debt cause us to cut off the most critical invests in our families and our future, or set aside the values and priorities that have made america great. fourth, i wanted to do a big deal, a grand bargain. i was willing to consider a small deal to avoid the pain of sequestration, but i it should be a last resort. i wanted us to put, truly put our country on track to tackle the debt and deficit, not simply continue lurching from crisis to crisis and i was willing to make the tough compromises that were required to get there. but up fortunately while there are many republicans who share those goals, who

see the value of a government that works for the middle class families, their party has been dominated by an extreme idealogical strain that allows itself only to think in terms of cutting and shrinking and eliminating and never in terms of investing, or growing, or fairness. they have a vision for our country in which families like mine would not have gotten a hand up. we would have been left to fend for ourselves. a vision best articulated by one of their idealogical leaders, grover norquist, who said, i'm not in favor of abolishing the government. i just want to shrink it down to the size where we can drown it in the bathtub. grover norquist, by the way was kind enough to wish me luck on the super-committee by telling reporters that the lady from washington doesn't do budgets. well he has a elicited a pledge from almost over

single republican member of congress to never, under any circumstance raise taxes by even a penny, despite the fact that the wealthiest americans are paying the lowest rates in generations. despite the fact that the wealthiest americans are today, paying the lowest rates in generation, and, that the federal government is taking in the lowest level of revenue in decades. unfortunately far too many republicans have latched onto this deeply damaging ideology. they pay lip service to deficit reduction but what they actually seem to be concerned about is cutting taxes for the rich and starving programs that help middle class families and the most vulnerable americans. if republicans really thought that the deficit was the most pressing issue, you wouldn't have seen their presidential nominee say he

would reject a deal to cut $10 in spending for everyone dollar in tax increases. you wouldn't have seen them do everything possible to protect the bush tax cuts for the rich. you would have seen far more interest among their leaders in congress and compromising with democrats to get the grand bargain that everyone in this room understands we need. and you would not see their single-minded focus on slashing, non-defense discretionary spending which only makes up 16% of the federal budget, is already shrinking and provides critical support for our families and investments in our future. so, it was with very different visions and priorities that the two sides came together in our super-committee last year. i understood it would be difficult but i knew democrats were ready to compromise and open to the

concessions a balanced and bipartisan deal would require. and i was hopeful, that the republicans were as well. the first day that the super-committee met as a group we went around the table and we each talked about what we wanted to accomplish. we shared some coffee and runney eggs and our hopes for the coming months. democrats discussed our priorities and our willingness to put everything on the table, to get a balanced deal. we discussed our desire to continue working to cut spending responsibly. we talked about our willingness to tackle entitlements and to make sure they were strengthened in a way that insured they would be there for our children and our grandchildren. we highlighted the need to responsibly reduce defense spending while making sure that our national security needs were addressed.

we laid out our belief that in a fragile economy, with millions of americans out of work, it made sense to invest in the short-term while putting our nation on a path to long-term debt and deficit reduction. and of course, we talked about the need for a balanced approach that included revenue. republicans opened in a very different way. one said that defense cuts were off the table, and indicated that instead of trying to go big, the group should focus on doing just the opposite. he wanted us to go small. republicans pushed for us to focus on the so-called low-hanging fruit from prior negotiations before working on any of the tougher issues, meaning, that they wanted to start by locking in and agreeing to all of the spending cuts that were identified as potentially working in a larger deal, but none of the revenue

increases that would have actually made such a deal possible. this was a tactic that we had seen before and of course, we were not going to agree to an approach that would lead to an all cuts, unbalanced deal. so it wasn't a great start but my hope was that this was just a negotiating position, not a hard-line. we continued our bipartisan conversations. we traded offers and ideas. we had our staffs draft and analyze potential language. there were times when i thought we were very close. but looking back at the offers from the other side that represented the greatest attempts at compromise, it's clear while we were close on the spending side, republicans hadn't even left their corner when it came to revenue. the biggest offer democrats put forward was an attempt at a grand bargain. this proposal, built on the one trillion dollars in cuts

in the budget control act, with an additional $1.3 trillion in cuts to spending and changes to entitlement programs as well as 1.3 trillion in new revenue. and it included a short-term investment in jobs to give our economy a much-needed boost. to be honest, it was a painful offer. it included compromise on entitlements that personally i wasn't absolutely comfortable with. it had deep concessions on the spending side but i knew that the only way a deal was possible was if both sides were willing to accept some pain and i was willing to do that for a balanced and fair deal. but our balanced proposal stood in sharp contrast to the offer republicans would hang their hats on when it all ended. the tombmy plan. this was their attempt to exact like act like they

were putting a compromise on the table while in fact it was doing the exact opposite. the tomb toomey plan was small. it was less in cuts than the democrats offered. around $300 billion in new government fees and 300 billion what they were calling new revenue. it is important to note that many of those numbers were fuzzy and it is unclear exactly how cb would have actually score ad lot of that but i want to unpack that last number a bit because the republicans were trying to do here is not unique to the toomey plan. we've seen this over and over in their budget proposals. the tomb my plan would permanently cut the top tax rate for the wealthiest americans from the 35% it is now, and scheduled to increase to 39.6 on january 1st, down to 28%, which would add trillions more to the deficit.

gets even worse. the tomb my plan claims this lost revenue would be offset by closing loopholes and ending he do, dids and further there would be 300 billion dollars in extra revenue once this was all said and done. while the plan is explicit about giving the rich the biggest tax cut since the great depression, it is painfully vague when it comes to where that revenue is going to be found to offset that. in fact it ignored that part completely. it simply assumes congress will be able to get that done through tax reform. well, there was some analysis done on a proposal that was similar to toomeys and what they found. in order to pay for the tax cuts for the rich, we would have had to slash to the bone the personal and dependent exemptions, almost all itemized deductions including the most popular ones we all know, home mortgages, charitable

donations, state and local taxes, child tax credit, college tuition tax credit, almost every other tax credit. so to spell out the obvious, under the tomb my richest americans would get a big tax cut while middle class cu that befit them thex . meone making over miion dollars a year wod e anverage tax cut o 30 -- $31,700. for anyone making less than, the middle class, the poor, the cuts in rates didn't make up for the exemptions and deductions lost. for example, someone earning $55,000 would see an average increase of almost $1,000. so not only is it deeply unfair to ask the middle

class to foot the bill for another deficit-busting tax cut for the rich but the tombmy -- toomey plan would lock them in. there is nothing responsible about that in my book. in fact i find it off fence sieve. i was reminded of the tombmy plan when i saw the ryan budget this year. ryan's budget cuts taxes for the rich deeper than toomey's. down to 25%. it uses the same parlor trick to raise revenues toomey does. ryan need the congressional budget office to score its plan as a deficit reducer, not the deficit buser it actually was. he simply directed the cbo to score his plan assuming it would raise 19% of gdp. well that is quite an assumption. wish we could oomph all of

our problems away like that. farmer -- former reagan advisor bruce bartlet slammed ryan's plan. he offers the sugar of rate reductions without what the medicine of base broadening will be. i should add republican presidential mitt romney's plan does something similar. cuts rate for the rich while refusing to name what deductions would be closed to pay for it. so the tombmy plan was a gimmick. it was a was a leap towards the tea party and away from a deal. the democrats were willing to match the republicans dollar for dollar on the spending side and more. we went even beyond the toomey plan when it came to entackling entitlements. we had backing from our leadership and our party to make a big deal. we jumped right into the middle of the ring but republicans refused to move an inch in our direction on

revenue. they actually tried to use deficit reduction committee to cut taxes for the rich even further. and they were so focused how their extreme base would react they simply could not summon the will to leave their partisan corner. why is this? why is the modern republican party so opposed to allowing the rich to pay just a little bit more in taxes to help solve the debt and deficit problems of this country that they would prefer no deal at all? after all it wasn't always this way. president reagan raised taxes 11 times. president george h.w. bush, famously raised taxes to rein in the deficit. this really shouldn't be controversial. outside of today's republican party, it isn't because if you believe that the deficit and debt aren't major problems that need to be addressed as democrats do, and as pubs -- republicans claim to you can't simply

ignore revenues at a time at 15.4% of gdp, they are the lowest in 60 years. poll after poll has shown the american people overwhelmingly want to reduce the deficit with a combination of cuts and revenue. every single bipartisan group that has made progress in the area from simpson-bowles to domenici rivlin and others were able to come together because their plans were balanced. and let's be clear. we do not want to increase revenue for the sake of increasing revenue. of course not. but as a nation, we need to pay for the services and programs the american people want. we need to rein in the deficit and debt and we need to do it in a responsible way. democrats understand this. and congressional republicans should too. because all of this is coming to a head once again. unlike last year the consequences of gridlock could start to be felt

immediately. millions of jobs could be lost you there the allic cuts. programs that families depend on would be slashed irresponsibly across the board and middle class tax cuts would expire. once again, if republicans won't work with us on a balanced approach, we are not going to get a deal. because i feel very strongly that we simply can not allow middle class families in the most vulnerable americans to bear this burden alone. it is just not fair. so if we can't get a good deal, a balanced deal, that calls on the wealthy to pay their fair share, then i will absolutely continue this debate into 2013 rather than lock in a long-term deal this year, that throws middle class families under the bus. i think my party and the american people will support that. i hope it doesn't come to that. i think we have some good reasons to think a deal can happen before the end of

this year. i know democrats are willing to compromise. we just need a partner. thankfully i'm seeing some encouraging signs from republican who is are sick and tired of being boxed in by the most extreme elements of their base, who don't like being responsible for continued manufactured crises that hurt our economy and destroy our nation's faith in its government and who are concerned about the impact of sequestration. in the privacy of back rooms and in small gangs republicans are far more willing to discuss the need for revenue and there are some republicans passionate about national defense and willing to make some tough choices on revenue, to protect the pentagon. in fact, some of the productive conversations that my republican colleagues have been having have led grover norquist to decry their quote, impure thoughts when it comes to taxes. well, i hope these impure thoughts continue. if norquist is mad, and i me that in the angry sense of

that word, then we must be on the right track. because the only way that we can get a balanced and bipartisan deal is if responsible republicans can persuade their leadership to stand up to the most extreme elements of their pace and come to the table with real compromises. . . >> and the pledge will no longer keep republicans boxed in and unable to compromise. if middle class families start seeing some money coming out of

their paychecks next year, are republicans really going to stand up and fight for new tax cuts for the rich? are they going to continue opposing the democrats' middle class tax cut once the slate is wiped clean? i think they know that that would be an untenable position, and i hope this pushes them to come to the table with real revenue now, before being forced to the table if we don't get to a deal by the new year. because you know what? we really shouldn't wait. it's not good for the economy, it's not good for the markets, and most importantly not good for our taxpayers and small businesses across america. so when it comes to the expiring bush tax cuts, i agree with president obama. let's extend them for the 98% of workers and 97% of small business owners, democrats and republicans agree should have their tax cuts and then have a real debate about the tax cuts to the wealthiest americans that we disagree on. you know, before august we are going to have a vote to do that

exactly in the senate. senate republicans have indicated that they're going to make an effort to extend all of the bush tax cuts including those for the rich. i challenge them to do something different. to be honest about what they really want and allow everyone to clearly state their position on this issue. i challenge them to offer an amendment to our middle class tax cut that would simply extend the tax cuts they're fighting for, the tax cuts for the rich. not a political amendment offered simply to give their members a way out of voting against a middle class tax cut, a real amendment. if they do this, all of the bush tax cuts would be up for a clean, honest extension vote, and the american people would know where everyone stands. any senator who supports extending tax cuts for the middle class can vote for our bill. any senator who supports extending tax cuts for the rich can vote for the republican amendment. and any senator who supports

extending all the tax cuts can vote for both. that would give everyone the opportunity to vote for exactly what they want, and it would give -- make sure that the political gimmicks don't get in the way of delivering results for the 98% of workers both sides agree should have their tax cuts extended. if republicans don't do this, if they don't playing political games with this vote and only offer an amendment to kill this bill, then they will have proven conclusively they don't care about certainty, they care about extending those tax cuts for the rich, and they will use every bit of leverage they have to do it. if we are really going to address these issues, we have to cut through the political smoke screens. it's time to put our cards on the table, offer real choices and have a debate that is worthy of the senate. holding the middle class tax cuts hostage may be a smart tactical move if the goal is to protect the rich.

but it's not good policy, it's not good politics, and democrats are going to keep reminding the american people why middle class tax cuts aren't being extended immediately even though both sides say they want them to be. you know, i've also heard the claim made that we need to extend all the tax cuts to give us time to reform the tax code. well, we absolutely need to reform the tax code. it is badly broken. and i'm certainly willing to discuss a fast-track process for getting that done. but there's absolutely no reason, not one, that we need to extend the tax cuts for the rich as a precondition for reforming the tax code. and when we do get to work on this, republicans are going to have to accept that tax reform is not going to be a back door way for them to sneak through more tax cuts for the rich, and it's going to have to raise revenue to help rein in the deficit and debt. now, in addition to the

expiration of the bush tax cuts, we also face a $1.2 trillion in automatic spending cuts. as you all remember, sequestration was included in the bipartisan budget control act to give both sides an incentive to compromise. but republicans weren't willing to offer any concessions to get to a deal, and now they want to have their cake and eat it too. they want all the deficit reduction but without any of the bipartisan compromise of shared sacrifice. you know what? if democrats were willing to accept a wildly-imbalanced deficit reduction plan to avoid the automatic cuts, we would have done that back in the supercommittee. we didn't then, we will not now. so anyone who tells you sequestration is going to simply disappear because both sides want to avoid it is either fooling themself or trying to fool you. it is going to have to be replaced, and that replacement is going to have to be a balanced plan. we are also not going to allow

just the defense cuts to be replaced without addressing the domestic spending cuts that would be devastating to the middle class. none of the automatic cuts are good policy. they were packaged together in a bipartisan fashion to get both sides to the table, and they will be replaced or not as a package. here in d.c. the defense cuts get most of the attention, but across america all the automatic cuts would be deeply damaging to our families and our communities. that is exactly why i've been working across the aisle with senator mccain on legislation calling for an analysis of the impact of sequestration across both defense and nondefense spending. and i'm hopeful that that information will help us bring the same spirit of bipartisanship to a balanced and bipartisan approach to replace those automatic cuts. because once again, i will not agree to a deal that throws middle class families under the bus and forces them to bear this burden alone.

unless republicans end their commitment to protecting the rich above all else, our country is going to have to face the consequence of republican intrance generals. this is more about our debt and deficit. it is about our nation. we cannot ignore this challenge, we need to rein in the debt. but it is not all that defines our budget. our budget and our nation will be defined by the scientists who come out of our schools, by the businesses that we create, by our communities, our universities, our research, our development, our innovation. and we will be defined by the opportunities we afford to every one of our families and workers, by the fairness of our society and how we treat the most vulnerable among us. when i go back home to washington state, my constituents don't come up and say they want the federal

government to spend 18% of gdp or 20% or 25%. they tell me they want a strong school system for their kids. they want them to go to college if they want to. they want good jobs in their communities, safe roads. they want their government to be there for them when they need support getting back on their feet. in other words, they want government to do what it did for my family, what it's done for millions of families for generations. they do want us to tackle our debt and deficit. they certainly don't want us to hand the bill to our kids. but they want it done in a balanced and fair way that doesn't leave the middle class holding the bag alone. those are the priorities that i will be pushing for when we vote on the tax cuts next week and in the weeks and months and years ahead. i believe that they reflect the american values that have carried our nation forward for generations and the vision that will continue our great nation's leadership into the 21st century

and beyond. i know that democrats are ready to go to work. we want to make a deal, we are ready to compromise. i'm personally willing to talk to anyone from either party who wants to solve this problem. and as soon as republicans decide to work with us, i'm confident we can get to a balanced and bipartisan deal that the american people expect and deserve. thank you. [applause] >> so, senator, thank you. i don't think anybody will accuse you of a lack of clarity in this presentation. [laughter] except on one point, perhaps, and that is on entitlements. you say democrats are ready to deal. can you give us any indication of the kind of deal democrats would put on the table and what specific entitlements would be changed and how?

and do you think a majority of democrats would support it? >> well, in fact, as i indicated on the supercommittee democrats did put a package forward that did include changes to entitlements to assure that they were there beyond one generation. i have a granddaughter. i don't want just medicare to be there for my daughter, i want it to be there for my granddaughter. i understand that, and i'm willing to make decisions to make sure we have long-term security for medicare and medicaid and our entitlement programs. but that is in the context of a balanced approach. the reason that those changes and suggestions were not accepted is for one reason alone, and that's because the republicans wouldn't put any revenue on the table to help meet that deal and come to poise. -- compromise. >> now we have time for one or two audience questions. not statements, questions. let's make a clear question that's short. yes, over here. >> [inaudible] >> there's a mic right here.

just pass it down the row, please. we're lucky nobody grabbed it. >> well, my question, my basic question is wouldn't it make the negotiations a lot easier, make it easier to get on with going big in the grand bargain if there were some more money to work with right now that could be generated without any increase in the national debt? now, in one minute flat i can sharpen up that question to be as precise as it should be -- >> well, we don't want to take a minute. just give us the essence of it. >> is that all right? >> not a minute, no. give us the essence of it. you have an idea. >> the essence of it is as many of us note during the '30s there were many prominent economists who argued that to fight the great depression we should reintroduce the lincoln era greenbacks. greenbacks are a means of exchange which do not increase the national debt at all. um, it's a complicated subject,

there's a lot of history. there have been many times and places in history where paper standard, fiat money, greenbacks have been used very successfully and with very limited inflation. in fact, in one case the least level inflation ever in our country's history for a period of 52 years. there's a lot more i could say, but it was a major debate, a grand debate, if you will, of the '30s, and my question is shouldn't we be reopening that grand debate as well as the grand bargain? >> good luck with that one. [laughter] >> fortunately, we're at the brookings institute, and you have a wonderful panel that will come after me. but i sat on the supercommittee. everyone wants a magic answer. everyone wants a miracle to occur. everyone wants to pull something that looks good, sounds good but in reality cbo doesn't score it as something that will reduce

our debt and deficit. we have to come forward with a plan that will reduce our debt and deficit. the democrats on the committee did that, but where we didn't get any compromise was on revenue on the table. >> right here, quickly. >> thank you, senator. good to see you again. my question is the issue of jobs and outsourcing. if you remember when i lived in seattle near you, it was during the clinton administration that there was a proposal that was passed for nafta that still continues where they're outsourcing jobs, and it has not changed in both houses whether you're democrats or republicans have endorsed this and continue with the outsourcing of jobs which eliminates jobs in this country. what do you think or what position do you take, how will this create the economy? will this create jobs in america if we delete our eliminate nafta and gat because that is very important in terms of loss of jobs for americans here that are

going overseas for lower salary and production. >> well, we're not here today to debate trade policy, but i can tell you that every democrat strongly believes that we should be making things here in this country and creating jobs and showing the world that we can be strong in the future. and that takes a lot more than trade agreements. it takes training and education for our work force, it means making sure that people have the skills we need to manufacture and build here in this country. and i can tell you standing here if all of our deficit and debt reduction comes out of that small portion of the budget, 16%, and eliminates education and training, we will not be able to manufacture and build things here in this country. >> senator, thank you very much. >> i know we're out of time. i do just want to say this -- >> sure, go ahead. >> to you and all your audience. i believe we can get a good deal. it will take leadership, it will take compromise. there are good people working at this at every level, and i am, again, willing to work with

anyone who comes to the table and is willing to bring real revenue and a balanced approach to solve this really important generational challenge for our country. >> senator, thank you very much. >> thank you. [applause] >> if you'll stay in your seats, we're going to bring the panel up now and start the next phase of of our program. [inaudible conversations] [inaudible conversations]

[inaudible conversations] >> thank you very much for your patience. now we get to the part where we ask questions that are directly pertinent to what the senator just got through telling us which i think was an extremely important statement. our panel consists of three people from brookings and one person who's not from brookings. so let me just say down on the

far right is bill friends el, where -- frenzel, where he's used to occupying territory. bill gale, foremost expert in taxation and a senior fellow here at brookings. bob greenstein, the center on budget policies, he masquerades as director, but he's the whole shot. and he has written frequently and very, i think, perceptively on this issue, and so it'll be interesting to hear what he has to say s and alice rivlin who has been more involved in this debate, commenting on others' plans and generally teaching all of us, including people here at brookings about what we have to do to get a budget deal. so this is a remarkable statement. i should tell the audience that several months ago xavier becerra came here and for a friday lunch, quiet session with about 30 people, and we had a very lively discussion because he proposed the democrats should do exactly what patty murray

just proposed. i think a lot of people in the room were incredulous at that point, but now we have it from a person who's on five committees in the senate, head of the senatorial campaign committee, so now we have to count this as a serious proposal. obvious first question to the panel is, would this work if we did? would it work? and what would the result be if we actually went off the cliff or slope as bob prefers to call it? what would be the consequence for the economy and for the budget debate? bill frenzel. >> well, i think part of her speech that impressed me the most was the ending where she said he she was optimistic and hoped for a deal. but the qualifier throughout the whole discussion was that it had to be a balanced deal, and as i interpreted her definition of a balanced deal was half taxes and half spending. my own guess is that isn't going

to pass muster in any kind of an arrangement. also it seems to me what she was calling grand bargain, under that definition looked like it was going to be a little thin. that it wasn't going to get us where we need to get. simpson-bowles which is the standard and rivlin-domenici were in the five billion area more or less, i think she's -- looks, sounds like she's about halfway there. and so i think we need to escalate her aspirations a bit. >> alice, anything you want to say about this? you looked like you were -- >> yes. i actually think it's a very bold move on the part of the senator. when you say will it work, i think the question of what "it"

is. as a negotiating tactic, i think the threat to let the whole kit and ca good l expire -- ca good l expire at the end of the year is a brilliant negotiating tactic. i hope it doesn't actually happen because i think if we did that, we would take some risks with the economy. cbo among others has pointed out that going off the cliff would risk recession in the first half of next year. don't know whether that's really right, whether it's too pessimistic or maybe too optimistic. but there are real risks here. on the other hand, as a negotiating tactic it makes sense. if you remember back when the negotiating tactic of the republicans was, well, let's

default, let's let the debt ceiling rip, that was truly scary to those of us who thought that default was an unacceptable option. but going off the cliff is risky, but it has some advantages. it would mean that the debt ceiling problem wasn't a problem and that it would buy some time to think of a better answer and probably not be totally catastrophic for the economy. i'm not for going off the cliff, but i think as a negotiating tactic, it makes a lot of sense. >> bill gale. >> i don't think it's just a negotiationing tactic. i don't think she's just playing poker. maybe she is. but there's more to it than that, and that is 90% of the republicans in congress have signed the no new taxes pledge.

if i had any criticism of her speech, it was that she was referring to extreme elements in the republican party that didn't want to raise taxes. well, 90% is a pretty big, extreme group. it's not an extreme republican idea to sign the no new taxes pledge. it's a mainstream republican idea. so the problem the democrats have is if they want taxes to be any part of a budget deal, they have to not only negotiate with the republicans, they have to get the republicans to negotiate themselves so they can all hold hands and violate the no new taxes deal at the same time. so one way to avoid that is simply to let the bush tax cuts expire. that's 2% of gdp and revenue right there. and they can get that by doing nothing. so it's a substantive issue as well as a strategic issue. and i wouldn't want to downplay the substantive part. you can get more revenue out of a deal if you just let the tax

cuts expire than if you keep, keep extending them. in terms of the long-term effects, the way i think of it is if we let the tax cuts expire and we initiate the sequesters, we will be on a much better long-term path than we are now in terms of budget advocates. now, nobody will like the structure of what we will have done because we will have raised tax rates instead of expanding the base, and we will have cut discretionary spending instead of addressing entitlements. but the fact that we're on a better path would give us more revenues, less spending. it would give us an opportunity to reach a budget deal, and it would, of course, give us the incentive to reach the budget deal because nobody likes that particular structure. the short-term concerns alice mentioned cbo said this could push us back into a recession, that could be dealt with via an explicit short-term stimulus package that did not involve the

bush tax cuts. i had a piece online about this earlier week, but i think this partisan debate about how much of the tax cuts do we extend or how much do we not extend is not getting us anywhere. there are many more interesting issues, believe it or not, than what share of the bush tax cuts ought to be extended. and i think the right way to do that is, to deal with this is to deal with something explicitly short term and temporary now, let the tax cuts expire and deal with tax reform. lastly, i want to talk about the balance issue. i didn't hear senator murray saying anything about explicitly 50/50. maybe i missedded it. >> i didn't either. >> but -- >> you're right. >> i don't think -- it's not my impression that 50/50 is a requirement for anybody both because it's an arbitrary division with and because there are these huge items called tax

expenditures which are really spending that happens to be embedded in the tax code. so things like the mortgage interest deduction, the charitable deduction, the deduction for state and local taxes, those could just as easily be structured as spending items. and donald marin at the urban institute and the tax policy center and eric toter have a piece that shows the spend anything tax expenditures is a good 4 president of gdp -- 4% of gdp. so conservatives could call them spending cuts and liberals could call them tax increases if they want. so i don't think the ultimate, exact decomposition of the balance is important. i think it's important that for this to be a sustainable deal, both sides have to be seen as getting something, as giving up something. >> rob greenstein. >> i very much agree with bill. this really is much more of a negotiating tactic, and i can say that not just from senator murray's speech today, president obama's statement last monday

that he would veto a bill that extends the upper income tax cuts in conversations i've had with people in the white house. the history is what's happened over the last year or two. for months we had negotiations last spring and summer, and at the end of the day, we ended up with a budget control act package that was no revenues, upon the risk if you didn't do that, the nation could default. over the last five or six weeks, in meetings i've had with various democratic senators and senior staff to democratic senators, i have posed the question to them. i have said when you go into negotiations in the lame duck, do you believe that although you'll talk about a balanced package, that republicans enter the negotiations believing that when you get right up to january 1st you, the democrats, will reluctantly relent and agree to extend all of the tax cuts? and everyone who answered the question -- not everyone did -- everyone who answered the

question said, yes, that is what the republicans believe. well -- >> and, hence, what they would do, right? >> that is, and from the administration and the democratic standpoint, they heard speaker boehner say, what, a month or two ago every dollar we raise the debt limit has to be offset by at least a dollar in spending cuts, no revenues. the only budget that meets that is the ryan budget. so there is now, i think, a much clearer understanding than there was a year ago in democratic ranks of what senator murray is reflecting. that if you don't somehow change the terms of the debate and show that you will not agree to any more deals that are spending cuts only, that you will just continuously go farther and farther down that path. and with regard to the economy, i think the view which i very much share, reflected in a paper chad stone at the center has done, is what cbo really said

was if all the tax cuts expire and say expired, the sequestration goes into effect and remains in effect. then over the course of the first half of 2013 we're likely to slide back into a recession. my view is just as in 1995 when clinton and gingrich couldn't agree and the government shut down, the pressure on both sides was so great there was a deal in three weeks. the pressure here will be even greater, i believe, given the state of the economy and concern in the markets. i think if we don't have a deal by january 1st, we likely will have a deal by, say, the end of january. i wish it weren't the case, but that may be the only way to actually get a deal that includes revenue. and because it includes revenue, leads democrats to go significantly farther than they otherwise would in areas like medicare. one last point. to the degree that republicans really come to believe -- and i don't think they do yet -- that

people like the president and senator murray are serious, that they really will go into january if necessary, if that is widely believed, then it increases our chances of getting it done without going into january. >> absolutely. let's just clarify one point here. negotiating point that alice implied but no one has said it explicitly, and i want to see if you agree with this. if we went off the cliff and now we're on 1, january, the situation is republicans could agree to proposals that would produce additional revenues, and they would truly be tax cuts because the tax rates have all gone up as of 1, january, correct? and then going back to your statement, bob, does that create a possibility that you really could get a deal that involves revenues, because republicans then would truly be saying these are tax cuts, and yet they're producing a trillion or whatever it happens to be in revenues. >> i think that's a little too canned and cute. i view it a different way.

as senator murray said, i think there are some republicans who behind the scenes feel we need to have some revenues. we need a balanced package. it is very hard for them to get out in front of that in their party. a few have done it, but not very many. if we actually go into january, the top raise is risen to 39.3%, there is volatility in the measurings, financial markets, there's tremendous concern. the media is focused on this incessantly, the president has called bipartisan round-the-clock negotiations at the white house. in that context i think it's somewhat easier for republicans to move. it's not this cute little technical thing. well, it's no longer -- it's the larger -- >> it would be difficult at that point, bob. bill, what do you think? do you think republicans would be able to cut a deal with tax increases more easily after january 1 if the bush tax cuts disappear? >> i really don't know, ron.

i look on this, alice says this is less worse than the republicans threatening the debt ceiling. i think it's the same kind of an adventure. it is -- this is the season when the parties are in conflict, they are throwing down their threats one to the other. i think it's a whole different game after the election. they ought to sit down and decide what they want to do. maybe still a stalemated game, and i think what bob has suggested is a possibility. there might be a kick the can down the road, there might be a fall off the cliff and followed by negotiation to save one's self. but i don't think we know that. i think what we do know is that there are precious few days in a lame duck session. and the problems are

sufficiently complicated that it is extremely hard to negotiate the full kind of bargain. so however it gets kicked over into 2013, a lot of the decisions are still going to be made in 2013, particularly with respect to tax reform which will take the committees at least a year, i assume. >> so let me sort through that and just ask you a yes or no question. >> politicians don't know those questions. >> yeah, i know, but you're not a politician anymore. you're a scholar. >> i've gone straight. [laughter] >> yeah, okay, good. so you'll answer. right. so we're january 1st again, and we went over the cliff, and now it's truly the case that if we -- we could do things that would raise revenues and still be tax cuts and to take bob's scenario, meanwhile, the whole country is going nuts, and the financial markets maybe, and the media's covering it incessantly. with those two factors, is it

more likely the republicans would allow some deal that would be a trillion or, you know, some amount in tax increases? >> again, i don't know. if i had to guess, i'd say bob is on the right track, and that is a possibility. but i really don't know. it seems to me that when the republic is in chaos and the economy is going if ruins there, will be heavy incentive for both sides to agree -- >> they'll -- bill gale. >> i think your question is missing an important element of the discussion. there are two aspects of the tax debate right now. one is how much revenue to raise, the other is structural reform of the tax system, okay healthcare? if the bush tax cuts expire, the revenue question is done, right? we've just raised an enormous amount of money. that means from the perspective

of getting enough revenue to be part of a at least a medium-term budget deal, a four trillionish deal, we're done. if they want to -- if congress wants to continue to work on structural reform, that's great. i'd be all for that. but in terms of getting revenue into the package, into the deficit reduction package, simply letting the tax cuts expire does that. and in that sense it would make reform, i think, significantly easier because then it would be about revenue-neutral or tax cutting relative to the baseline rather than about raising taxes. >> okay, alice. >> as you pointed out, that is a short term. because you've not ratcheted down in that scenario any of the, any of the cost drivers in the long term. >> no, that's right. sure. it's not the whole solution, no question. >> alice? >> i just want to speak up for the grand bargain because whether going off the cliff is a

negotiating tactic that results in a deal in december or a deal in january is not as important as recognizing that that's not what we want to do. we don't want to raise more revenue by raising rates when we have an opportunity to greatly improve the tax code and improve its pro-growth nature and its progressivity at the same time. and the sequester is not how we want to cut spending. so -- because, mainly because it doesn't deal with the entitlement programs as your question to senator murray pointed out. if we're going to solve this problem, we've got to have a grand bargain that does comprehensive tax reform that raises revenue and slows the growth of entitlements in the future. we can't get there unless we do

that. so we need some kind of forcing mechanism, and we've got one. >> bob greenstein. >> well, following up on what alice just said, excuse me, we're all saying that, you know, we'd much rather this occur in november or december than january. but if we go into january, the increase in the top rate to 39.6% maybe -- we don't know that it will be, may be such a forcing mechanism. >> yeah. >> bill frenzel said, exactly right, that tax reform could take six months or a year. if current law goes into effect on january 1 and the top rate goes to 39.6%, my hunch is that that significantly increases republican interest in tax reform, because they don't want a 39.6% top rate. >> really? >> democratic position then will work with you to get a top rate significantly below 39.6 in return for enough tax

expenditure closers that we get a net contribution of, hopefully, somewhere in the 1.x trillion range, the deficit reduction. and if the republicans go for that, they only go for that if in turn democrats agree to certain things on entitlements. and if it worked, you then have a process that takes six months or ten months, whatever. and you have a time frame by which the committees are to produce legislation which says raises x in entitlements, y in revenues, you package them together and have some kind of enforcement mechanism if they don't do it. but i do think there's a somewhat better chance of actually getting there if the 39.6% actually takes effect briefly. one last point which is i do want to be clear that if we go into january, start down the slope i would say rather than over the cliff, there's no way that all of the bush tax cuts stay expired until the whole tax reform deal was done.

when they work out this so-called framework agreement, they will make the bulk of the tax cuts -- hopefully not the high-income ones -- retroactive to january 1st. >> right. >> bill, you were dying to say something. >> i wasn't dying to say something, but -- >> you can speak anyway. >> thank you. [laughter] i think there's an issue here that we should keep in mind that we've had one pay your tax reform in 50 years -- major tax reform in 50 years. we've had one major health care reform, structural reform in i would guess about the same amount of time. we cannot afford to let the perfect be the enemy of the good. we cannot wait for the perfect tax reform or the perfect health care reform before we deal with medium-term budget deficit is the and long-term budget deficits. and that means we may have to take a deal that gets us on the

right path even if it doesn't get us the right structure. because once we're on the right path, we will have the opportunity and incentive to get on the right structure, and we'll have the money to deal with it. it means we may have to -- we have to deal with the deficit before we're going to ever resolve all the issues in health care, certainly before we're going to resolve the issues in tax reform. and i just want to be sure that people don't have the sense that if we don't solve the entire 75-year or 150-year deficit issue, then anything short of that is a failure, all right? there is no public policy issue that we have solved 75 years out into the future. and it's, i think, a result of inflated expectations and rhetoric to expect that we're going to solve this problem 75 years out or 100 years out in the future. so i guess my message is let's not let the perfect be the enemy of the good. and if we can get onto a good

path but not the perfect structure, let's work from there to get to a better structure. >> alice? >> i agree with that, but -- [laughter] let me be a little more optimistic about tax reform. this may be a moment where we drop the impediments of incentallism -- incrementalism in tax reform which is fatal because then you're arguing about whose ox gets gored. this might be a moment in which we blow up the whole tax code and start over and put in a more sensible set of provisions which would tax almost all income at the same rates, lower the rates and reinstate only a few of the most necessary and important

provisions, child credit and a earned income credit and a credit, not a deduction, for a home mortgage. you could, you could do that, and it is very attractive. and there are a lot of actual republicans who think this way. and not all are in the grover norquist camp. if you read tom coburn's op-ed in i think it's today's times, he sounds a republican note of hope here. >> and he was even mourning it while grover norquist, then senator murray, i believe -- >> he was, he was. >> i realize we're mostly scholars here. we're negotiating with frenzel, but he said he's going straight, so that implies he's not a full politician anymore. [laughter] so let me ask you a political question. this is really a risky strategy by democrats. it could blow up.

it could really produce some big problems for them. are any of you concerned about that? >> i am -- >> less risky than risking national default like the republicans did last summer? [inaudible conversations] >> well, bob, too late! it worked. >> i think it is similar to that -- >> you'll get a chance, a minute. go ahead, bill, go ahead. >> i think that a high risk, maybe a worse risk, but this is a very high risk too. high risk for the economy, plus but it's high risk, i think, for the democratic party. they've got a lot of interests involved in that tax code. they've got amt, they're going after their people, they'll lose their child credit, they lose their 10% rate. they lose a hell of a lot of things they like to have, and they like to have growth in the tax system, too, just the way republicans do. so, yeah, i think it's high risk, and i tend to look at it as a before the election kind of

threat or challenge to the republicans. i think you get the same thing back from the republicans. i think it's a whole new game after the election day. >> bill gale's not dying to say something, but he can anyway. >> i think it's a competing risk issue, not a high risk. the risk -- they've seen the risk, the democrats have seen the risk of going to the table and negotiating. what they got out of it in the debt deal was an all spending cut deal which wasn't even predominantly entitlements, it was discretionary. they're not happy with that strategy, with that outcome. they want the government to beef up its revenue structure in the long term. the only way to do that that i see is to let the tax cuts expire. i can't believe that the republicans -- again, 90% of whom have signed the no new

taxes pledge -- i can't believe that their going to defect en masse even if, despite what coburn wrote. so there's one risk, that we never get enough revenue to deal with the long-term fiscal issue. another risk -- which would be incredibly damaging to the economy. and another risk is that we hurt the economy in the short term. and i think it sounds to me like what they're trying to do is say we're going to take the second risk, and the argument may be that we could get some stimulus short term. that's not related to the bush tax curts. and we're going to try to move toward on the revenue aspect of the long-term fiscal solution. that seems to me like a choice, balancing one risk against another. no matter what you do right now, you're facing risk. >> bob. >> you have to ask yourself the

question, if we had defaulted last august and maybe three or four weeks later come up with a plan, would that have caused no more damage to the economy than if we go into january, come up with a plan in late january that's retroactive to january 1st? every person i've asked that question to says it ain't remotely close. once you default, you do permanent damage to the full faith and credit of the u.s. government. the reason that going over the cliff causes damages to the economy is because of all the aggregate demand it pugs out of an aggregate economy. as i've said, any deal will make most things retroactive to january 1st. yes, it would create uncertainty in the markets, so i've asked a bunch of new york, wall street-type guys. interest might go up temporarily, but if you then got

the deal, that would fade away. and what's very striking is the paper put out by the carlyle group. you can't get much more establishment. they base basically say, yeah, there's a risk, but the bigger risk is kicking can the down the -- kicking the can down the road. i think this is a challenge and a risk to both pears. everybody talks a good game on tax expenditures. i mean, coburn's piece this morning.

and you actually then get into the finance in ways and means committees and look at what you have to do to mortgage and charitable and the employer health exclusion and the like. do they have the gumption to do it? i don't know. i'm worried about that and, frankly, that's why my recommendation would be just lock in your revenue number and say the more you're willing to close tax expenditures, the more you low or the rate. but i worry that a deal that locks in the mack mum top rate and gives you a revenue number, that those two numbers conflict

when the policymakers confront the specific choices, 401(k)s. and i worry that if that occurs, the revenue number gives way, and we don't actually get the deficit -- >> you're right to worry, but in defense of senator coburn, he signed simpson-bowles -- >> that's true. >> -- which had a full-fledged tax reform that did all of the things that you say. >> but it was purely illustrative. >> well, it may be illustrative, but the point is such plans do exist, and some republicans are for them. >> i don't think're party, i don't think you could get either party to vote for the bowles-simpson. i think it's a terrific plan, i'm all for it, but i'd be amazed. >> oh, i'd be amazed, too, but i'm just suggesting that we may be in a different environment with respect to taxes which is less incremental than it used to

be. >> i agree. >> perfect example, though, of coming back to letting the tax cuts expire. letting the tax cuts expire would raise more revenue than bowles-simpson would generate. >> but not in as good a way. >> no, no, it's got a structural issue -- >> not just the high-income taxes. >> yeah. sorry. the current law baseline would raise more revenue than the bowles-simpson plan did. so my sense is it would be easier to get to a bowles-simpson outcome by letting the tax cuts expire and then saying, gee, we got a lot of money, we don't like the structure, so let's reform, let's cut taxes overall and get down to bowles-simpson. that's going to be -- >> that's what i said, and bob greenstein said it was naive. >> well -- >> well, i don't think policymakers are going to let all the tax cuts stay expired. >> let me just finish the point. the point is that the be -- if

you start from there, you have an incentive to make a change to bowles-simpson. if you make the change now, that would be scored as a revenue increase, and plus you'd be killing a lot of people's tax expenditures, so you'd face a double whammy. so i think the strategy here matters a lot. >> i really hate to think we get driven to responsible tax reform by this, by falling off the cliff. but maybe it is -- >> as opposed to we don't get driven to responsible tax reform -- compared to what? >> maybe some of them need it. i would like to think that the congress could and the president could move jointly into tax reform. >> you're a former member of congress. what does it mean to you that 90% of republicans have signed the no new taxes pledge? >> i think they haven't got much guts.

>> think? so how do we get tax reform from the current system then if -- how do you get around that constraint? >> i, i don't know how many have signed it, but i understand as alice does that there are a number who are willing to discuss putting revenue into any kind of a grant conclusion. and i'm with her, i think that eventually it is going to happen, but i hate to see us thrown off the cliff to have it happen. and i noticed a couple of people here mentioned that if we got thrown off the cliff and took, what'd the cbo say it'd cost us, a percent and a half of -- >> yeah, 1.4, i think it's 1.4 or 1.3%. but in the second six months it increases more than the first six months. so, i mean, that's -- >> okay. that's pretty toxic. >> yeah, yeah, yeah. >> and somebody said, well, it's

possible we could have some stimulus programs. i can't imagine that if they couldn't agree on the cliff problems, that they would agree on a stimulus question. >> okay. let's go to the audience now. tell us your name, don't make a statement, ask a question so we can get more questions in. you're going to have to come up here. go ahead. >> thanks very much. i'm garrett mitchell, and i write the mitchell report, and i want to ask this group of economists, including dr. haskins, a political question. and that is if we define best of all worlds as some sort of deal in december or the early part of january followed by some substantive tax reform over the course of the next 6-12 months, what political configuration do

you think creates the greatest likelihood that either or both of those could get done? status quo, meaning obama's back in the white house and republicans have the house and democrats have the senate, a romney in the white house and status quo in the congress, a republican sweep, a democratic sweep, is there something to be said -- and i would add to this that the reporting that i've been doing and seeing is that virtually all of the new recruits, republican recruits running for congress, are not signing the pledge. which, i think, is interesting. so anyway -- >> it's a great question. so what do you think? alice rivlin. >> i think sweeps are not in our interest at this moment, that we must have a bipartisan deal, and the chances of getting one are

greater either with the status quo or some other party. >> i can answer briefly. what she said. go ahead. >> i was thinking about a half hour ago that maybe we should clarify that, frankly, most of this discussion we've had is based on the assumption that, for example, there would not be a republican sweep. if a republican sweep, i think you just get everything extended until the new congress comes in and president romney takes office, and then you have a budget resolution and and a reck reconciliation bill with deep spending cuts and deep tax cuts and, actually, romney might then be forced to move forward with his, in my view, deeply irresponsible rate cuts which are also in the ryan budget. so i think the whole thing we're

talking about really implies mixed government and something like the current configuration. one other point. you mentioned something we've all been saying, that you can't do tax reform up front. you'd have a process with tax reform. i just want to make the point that in some of the entitlement areas, particularly health care, medicaid, mid care and -- medicare and social security, the same is true. the weakness of the bowles-simpson plan, in my view, is some of the medicare and social security proposals have serious problems in them and actually injury people on the lower part of the scale. and they were highly illustrative, thrown together at the end of the day for a variety of reasons. i think the optimal package is at the same point that you have x months to produce tax reform, on a parallel track you do the

entitlement changes. you have targets for them too. i think we should remember that what we really want is to knit the revenue and entitlement pieces together. the democrats don't get -- tax increases pass, the democrats don't get it -- >> i want to add to this. i'd like to say that i hate to find myself agreeing with bob. [laughter] i think it's going to tarnish my reputation. but i think he's just right. taxes and entitlements have got to walk hand in hand. they are the whole essence of the problem, democrats defending entitlements, republicans defending no tax increases. whatever has to be done, they have to be done together. with respect to the answer to the question, i'm with alice and

ron. i believe that we're going to have a divided government. no way the republicans can win everything plus 13 seats in the senate and that's the best way. we still have to have both parties. in this country you've never been able to do much unless you have both parties cooperating at least minimally. >> so, actually, i think this is a really interesting question whether divided government or unified government is more likely to reach the outcome. the argument in favor of divided government is, basically, the dimension that each side's going to have to do things odious to their own constituencies and they can blame the other side for those items. but it's interesting to think about unified government and whether that would work.

the attractive thing about unified government is there's accountability, and somebody is responsible for this. and if the republicans sweep the white house and the congress, then they've got to do something about it. if you look at countries like, you know, that have parliamentary systems, they're generally more adept at dealing with these issues than we are precisely because there's, you know, somebody, some party's in charge, and they're responsible. if they screw it up, they get voted out. so i don't know. i think mainly what it takes is policymakers that, like, want to act like adults and solve the problem. and i think i'm not sure whether that's bipartisan. >> next question. it's all the way on the end over there. go back about four rows and all the way on the end. okay. >> ed keane from the observatory group. question for mr. greenstein, but others can also answer it too. what i'd like to hear your

thoughts about is who the senate democratic leadership could keep all of their members in line, say, come december. particularly i'm thinking of the senate democrats from red states who might be up for re-election in 2014 to, essentially, agree to allow the cliff to expire. then they'd have to go home and then tell their constituents, well, your taxes are going up, but don't worry, we'll fix this. i'd like to hear the other end of that conversation from the constituents. and in particular with moderate democrats from red states. i know what is the senator said, but i'm wondering about those who might be up for re-election in 201, whether they might agree with that. >> first off, there's an issue for both parties, right? so, you know, the republicans go home, and the question can be

why did you block -- this is the line senator murray advanced -- why did you block the extense of the middle class tax cuts just so people could have an average tax cut of whatever number of thousands of dollars a year? so there's a line, you can see the script of what each party's line would be if trying to blame the other. do i think there would be some democrats who would be nervous about that? yes. i'm not sure that the number doesn't go down after the election. either they won or they lost, but in either case it's not as big a risk to them after november 6th as it is before november 6th. in any event, i think the question would have a bigger relevance if the democrats had the potential if they held on to

every vote to actually passing their proposal. but, of course, they don't because it'll take 60 votes. so i neither see the democrats in the senate able to get 60 votes for extending the middle class tax cuts without the upper income, nor do i see the republicans able to get 60 votes for extending all of the tax cuts. so i don't think anything passes the senate. the final point, of course, is if so many democrats got nervous, the president would veto it as he said last monday, and he'd clearly is have one-third plus some margin in both houses. so i don't think that factor actually interferes with this approach and this strategy, and what it underscores is, basically, in the absence of a bipartisan deal, you can't pass anything in the senate.

>> one more question. right there. >> [inaudible] my understanding is that the fiscal cliff would not completely eliminate the deficit in 2013, and if it didn't, then we're going to hit the debt ceiling that year at some point. later on, but at some point n. which case it bring back the dynamics of the republicans negotiating over another extension. and we didn't really comment on that a whole lot. just wondering your thoughts. and specifically whether or not the democrats are prepared to watch the republicans try to drive the country over that much bigger cliff. >> bill, you're smiling the most, so you get to go first. >> go, go, please. [laughter] >> i like your smile better than mine. i have no idea. i just hope the republicans who think it's a good idea to fuss

with the debt ceiling will mature a bit over the years and have learned something from their experiences in the past. that's not a good way to enforce any kind of economic or budget discipline. you're dealing with the full faith and credit of the united states, and nobody should want to see that even threatened. >> bob? >> well, if and when there is an initial bipartisan framework deal whether it be as we all hope but don't think is that likely in december, whether it's in january, it's hard to believe that such a deal wouldn't have a modest term extension of the debt limb. what i think is most likely is we've been talking about the first bill is a framework bill, and then you have tax reform and potentially entitlement changes that are to be produced by a

date certain laettner 2013. my guess is the debt limit is extended so it expires at about the some time you're supposed to pass the entitlement and tax changes. and then if congress fails to make good on those, you're headed up to hit another debt limit. if you make good on those and the reduces entitlement spending, moving forward somewhere in 2013, presumably that has an extent of the debt limit in it. but i think the debt limit gets tied into all these other things and is not totally divorced. >> bill frenzel, if you don't want bob greenstein to have the last word, you better speak up now. >> well, bob's words have been pretty good today, well above average. [laughter] >> well, join me in thanking members of the panel, and i'm sure everyone in the office will

send a nice note to senator murray. whatever or else might be said about this debate, we're having a lot of fun. thank you. knox no,. [inaudible conversations] [inaudible conversations] >> the senate is in a recess now to allow members to attend their weekly party lunches. they're back at #u 15 eastern. at 3 they'll take a procedural vote on the motion to proceed to the campaign finance bill.

republicans defeated a cloture vote yesterday, but democrats kept the senate in session late into the night to force a second vote on the legislation today. live coverage of the senate when members return here on c-span2. and elsewhere on capitol hill this week, federal reserve chair ben bernanke is delivering his semiannual monetary policy report to congress. this morning he was before the senate banking committee, and tomorrow he'll go before the house financial service committee. here's a look at some of today's hearing with the chairman addressing the recent scandal involving barclays bank ofey h london.ff >> regarding the federal reserve's role, the federal reserve bank of new york takeshe the lead in gathering marketle, intelligence for the federal reserve system. it was in the process of gatt gathering market intelligence when it received information in which a trader in barclays new york told an employee of theclay federal reserve that he thought

that barclay was underreporting its rate. about that same time, stories began to appear in the media. there was an april 16 story. i would like to make two preliminary points before talking about their response to that information. the information the fed received was about the banks possibly cementing lower ranks in order to appear -- submitting lower ranks and ordered to appear less week. the transcripts of the phone calls have no reference to the manipulation of rates for profit by derivatives traders as alleged by the recent decision. the second point i would like to make is that this issue was complicated during the crisis by the fact that there were very few transactions than occurring

overnight. banks are asked to report what they would pay their borrowing at a certain term. it may have been that transactions were not taking place. we will get more information on that as the investigations continue. it is clear that be on these disclosures that the libor system is structurally flawed. part of the response was to address those flaws. the federal reserve bank of new york after receiving this information responded quickly and set up an internal group to address the issue. it informs all the relevant authorities in both the u.k. and the united states, notably on may 1 president timothy geithner brief to the working group -- briefed the working group.

they briefed the treasury on may 6. it was followed up with enter agency staff briefings to provide more information to the various agencies. they also followed up with the bank of england and the united kingdom. there was active effort to report to all of the relevant policy makers and enforcement agencies the information that had been received. the second step that the federal reserve bank took was to develop recommendations to address structural problems with libor that i mentioned before. the new york fed released a memorandum list of suggested changes that they submitted to the bank of england on june 1 and following earlier discussions with the bank of england. there are also communications with the british bankers' association which is a private group that constructs libor

prior to june 1. the federal reserve bank of new york took the lead. they released information. they are looking for additional information. we were supporting -- in supporting mode. we provided reports related to the construction of libor. our staff were in contact with the sea stc -- cftc. i think it is important to note that following the federal reserve bank of new york's disclosures to the appropriate authority that there was a rapid follow up. the cftc was making increase as early as april 2008. it sent requests to banks.

they initiated inquiry in 2009. the european commission and a range of regulators are also investigating. we know about the june 27 settlement with barclays. there was a substantial respond by the -- response by the federal reserve bank of new york that information led the investigation. it also contributed to thinking about how to better structure the libor panel and >> that clip from today's appearance before the senate banking committee. you can see this hearing in its entirety on our web site, c-span.org. and mr. bernanke will be back on the hill tomorrow at 10 a.m. eastern on c-span3.

>> if i'm president, job one for me will be creating jobs. let me say that again. my agenda is not to put in place a series of policies that get me a lot of attention and applause. my policy will be, number one, create jobs for the american people. i do not have a hidden agenda. [applause] and i submit to you this, if you want a president who will make things better in the african-american community, you are hooking at him. you take a look. >> republican presidential candidate mitt romney and be vice president joe biden spoke at the naacp national convention in houston. >> just close your eyes and imagine, imagine what the romney justice department will look like. imagine when his senior adviser on constitutional issues is

robert bork. >> no! >> imagine the recommendations for who is likely to be picked as attorney general or the head of the civil rights division, or those other incredibly important positions at justice. >> watch their entire speeches online at the c-span video library. >> there has been a hostility to poverty since the war on poverty. lyndon johnson was the best president and looked at poverty issues and spent money on it and talked about his social service programs. lyndon johnson. let's follow that by, i hate to say this, but richard nixon is actually the father of minority business development. and inside his minority business, um, established the small business administration and used the term economic justice. richard nixon. economic justice. >> the former president of bennett college for women, julianne malveaux, regularly

writes and comments on politic, education, and african-american economic history. and hive sunday, august 5th at noon earn, your -- eastern, your questions, calls, e-mails and tweets for the author of "surviving and thriving." julianne malveaux, "in depth," august on c-span2's booktv. >> the senate is returning momentarily from their weekly party lunches. in less than an hour, at 3 p.m., they'll take a vote on a motion to proceed with the campaign finance bill. republicans defeat add cloture vote, but democrats kept the senate in session late into the night, forcing a second vote on the legislation today. now to our live coverage of the senate here on c-span2.

the presiding officer: the senate will come to order. under the previous order, the time until 3:00 p.m. will be equally divided and controlled between the two leaders or their designees. mr. whitehouse: mr. president? the presiding officer: the senator from rhode island. mr. whitehouse: mr. president, i believe that we have a number of speakers who are coming over from the caucus lunch to discuss the upcoming vote on the disclose act. i wanted to take the time that's available until a speaker shows

up to continue to report the previous support for disclosure from republicans, from our colleagues and from other republican officeholders and officials. i think where i left off in my previous listing, the next was senator lisa murkowski, who wants citizens united reversed. and says said that "super pacs have expanded their roll in financing the 2012 campaign due in large part to the citizens united decision that allowed unlimited contributions to the political advocacy decisions. i stood to gain from that however, it is only appropriate that alaskans and americans know where the money comes from." my friend, senator jeff

sessions, the ranking member on the judiciary committee at one point, has said, "i don't like it when a large source of money is out there funding ad ads adss unaccountable. to the extent we can, i tend to favor disclosure." senator cornyn has said, "i think the system needs more transparency so people can easily reach their own conclusions." senator collins has been quoted, "it is important that any future campaign finance laws include strong transparency i guess provisions so the american people knows who is contributing to a candidate's campaign as well as who is funding communications in support of or in opposition to a political candidate or issue." that's from "the hill." senator scott brown has said, "a genuine campaign finance reform effort would include increased transparency, accountability, and would provide a level playing field to everyone."

senator tom coburn has said, "so i would not disagree that there ought to be transparency in who contributes to the super pacs, and it ought to be public knowledge. we ought to have transparency. if legislators were required to disclose all contributions to their campaigners the public knowledge would naturally restrain legislators from acting out of the current quid pro quo mind-set. if you have transparency, you will have accountability." as i reported earlier today, the republican senate support for this goes to people who have left the senate as well, and i would remark again on the extraordinary editorial written in "the new york times" by senators hagel and rudman. the house speaker has said this, representative boehner:ings, "i think what we ought do is we ought to have full disclosure.

full disclosure of all of the mo enthat we raise and how it is spent, and i think that sunlight is the best disinfectant." representative eric cantor, who is the majority whip, i believe, has said, "anything that moves us back towards that notion of transparency and real-time reporting of donations and contributions, i think, would be a helpful move towards restoring the confidence of voters." newt gingrich has called for reporting every single night on the internet when people make political donations. mitt romney has said that, "it is an enormous, gaping loophole if you form a 527 or 501(c)(4) that you don't have to disclose who the donors are." well, that is chance for our

colleagues to close that enormous, gaping loophole that their presidential nominee has pointed out. one of my favorite comments is by mike huckabee. he said, "i wish that every person who gives any money" to fund an ad "that mentions any candidate by name would have to put their name on it and be held responsible and accountable for it." he went operation "and it's killing any sense of civility in politics because the cheap shots that can be made from the trees by snipers that you never can identify." "the cheap shots that can be made from the trees by snipers that you arthat younever can." " let me give an example of that. in the newspaper, i think this morning -- "the new york times" -- just one quick story while i'm waiting for my colleagues to appear.

i'm just going to read from the article some parts of it. "in early 2010, a new organization called the commission on hope, growth be, and opportunity --" -- with a name like that you know it's got to be pad in this environment -- "filed for nonprofit tax-exempt status telling the internal revenue service that it was not going to spend any money on campaigns. weeks later, tax-exempt statistic news hand, as well as a single $4 million donation from an anonymous benefactor, the group kicked off a multimillion-dollar campaign against 11 democratic candidates, declining to report any of its political spending to the federal election commission, maintaining to the i.r.s. that it did not do any political spending at all, and failing to register as a political committee required to disclose the names of its donors. then faced with multiple

election commission and i.r.s. complaints, the group went out of business. as citizens for responsibility in washington said, 'this or, chgo's story is a tutorial on how to break campaign finance lurks impact elections and disappear. the political equivalent of a hit-and-run." "a cheap shot from the trees by a sniper you can never identify" and to this day no one has ever identified the $4 million donor that funded those. i see that the senator from new jersey is here. i am delighted to yield to him, so he has a chance to make his ranches i yield the floor. -- to make his remarks. i yield the floor. mr. lautenberg: thank the senator from i are. mr. president? the presiding officer: the senator from new jersey. mr. lautenberg: yesterday we witnessed quite a sight here. not a single republican was willing to stand up to oppose secret money in exwills.

today they'll have another chance to announce their support and tell their constituents whether or not they prefer that secret money buys the politicians or does it take their constituents' votes to get people in place who care about where this country is going. republicans will have a chance to show americans where they stand with millions of individual voters over the few billionaires who seek to drown out the voices of our citizens by using secret money. yesterday i came to the floor to present the identities of two of the biggest sources of money in politics -- david and charles koch. they're also joined, we read in the papers, heard in the news, about a fellow named sheldon adele son, whose brain money earned from japanese gamblers to

buy american politicians. that's some deal. the koch brothers are putting together a seat for a group of wealthy friends who will spend $400 million to manipulate the upcoming election. this effort is one of an egregious example of the flood of big, secret money in our politics, and this unaccountable money is spent with a clear goal of determining our laws and deciding our elections, and the policies that this country will follow in the future. the koch brothers -- here they are -- are so set on picking their preferred politicians. too bad, a country of over 300 million people, and these two fellows want to decide who should run this country of ours. koch industries controls oil, chemical companies that do

business around the globe, a understand so what do the -- and so what do the koch brothers and their anonymous friends want from politicians who benefit from their secret money? they want laws that benefit the companies like the ones that they own, even when those laws come at the expense of millions of other americans. i think the reason is clear. they want people in office who will put their special interests above the public interests. these brothers run koch industries, giant international conglomerate, and one of the largest privately held companies in the world. the koch brothers, to take another example of secret money -- americans for prosperity has opposed e.p.a.'s new american pollution standards. these historic standards will

prevent 130,000 asthma attacks, 4,700 heart attacks, and up to 11,000 premature deaths. and americans for prosperity funded by secret money, oppose the rule that will save these lives. they'd rather have the money. we know what millions of people who live near power plants want. they want the plants to clean up their acts and stop poisoning them and their neighbor neighbo. the kochs and industry lobbyists argue that these standards just cost too much. what is the value of a life to these guys? let them answer that question publicly. turn in the secret money and let the people across our country decide who they want in the senate, in the house, and in the white house.

how much poorer is our society when children are born with developmental problems? a child born with pollution in their body is set back from day one. that child's potential is stunted before they have even taken their first breath. polluters just ignore the cost to american families. they think they're right to pollute -- their right to pollute is more important than the average person, the children in our country have the right to breathe. it's foul play you've ever seen it. puput your money up. take fresh air away from young people. create problems that mercury in our environment does. mr. president, secret money in politics makes it possible for

polluting companies to spend millions of dollars influencing elections, and the american public is kept in the dark. so i say to my republican colleagues, let your conscience rule your decision. let's say -- let's tell the truth. i wish that the vote could say, yeah, i want secret money to continue being spent. they wouldn't dare use that language. so, come on, guys. there are good people over there. let's shine some light on who's pullings the strings in this country. is it the people or is it the money that makes the difference in the way this society functions? i yield the floor. mr. sessions: mr. president? the presiding officer: the senator from alabama. mr. sessions: mr. president, i'd ask that i be notified after five minutes. the presiding officer: without objection. mr. sessions: mr. president, i understand we're going to have a second vote on the disclose act.

it got only 51 votes previously. we need 60 to move forward to passage. it's not likely to happen. i know our democratic colleagues were down here last night into the midnight hour talking about the disclose act, which is political campaign-related that we have significant differences of opinion about and it is not going to pass. so i'd like to ask my friends and colleagues, what is it that we ought to be disclosing here? is it some individual amount of money, some individual american made honestly and spent? or maybe there's some other things we ought to disclose. i would say this senate ought to disclose to the american people what its budget plan is for the future of this country. we haven't had a budget in three years. senator reid said it would be foolish to bring up a budget.

foolish because we don't have time? we have time to spend all night last night -- or half the night, have a second vote on the same bill again today. why don't we -- why don't we spend some of that time on something really important like deal with our $16 billion debt. why don't we disclose -- why don't our democratic leaders disclose to us what their plan is to deal with this surging debt, a debt that's increasing at $1.3 trillion a year, unsustainable as every estimate we've ever been told and witnesses testified to before the budget committee and other committees. unsustainable. yet they refuse to even lay out a plan for how we're going to confront that. the house has. they laid out a really historic plan.

congressman ryan and his team in the house passed a long-term budget plan that will alter the debt course of america and put us on a responsible path. not so in the senate, even though they talked about it in secret amongst themselves that they had a plan. well, let's disclose it. why don't we have a disclosure of it. and october i 1st coming up pretty fast, particularly since we're going to be in recess virtually the entire month of august, and it looks like the entire month of october. so by october 1, the united states congress has a duty and a responsibility to pass legislation that funds the government because the new government fiscal year begins october 1. senator reid just announced he's not going to produce a single appropriations bill.

there are 13. we usually -- when i first came here, we tried to pass all 13 every year, before october 1, when the year starts. not even going to attempt it. so i think the american people ought to ask, well, what do you plan to spend your money on next year? the country's suffering substantiasubstantially. why don't you disclose, senator reid, what the appropriation bills are going to be, how much money you're going to spend on each one of the items and sub-items and sub-items and sub-items and sub-items so we can examine it, bring it up on the floor, we can bring up amendments like the united states senate is supposed to operate. why don't you disclose that? isn't that important for america? i'd have to say, since i've been here, this will be the least performing, most disappointing year of the senate in our history. no budget, no attempt to bring up a budget, no appropriations.

those are our bread-and-butter requirements of any -- any senator. food stamps, the snap program. in 2000, we were spending about $17 billion on food stamp program. last year we spent $79 billion. it's gone up four times. it's out of control. it needs to be managed. it needs to be focusing more on helping people in need, not just subsidizing people in need, helping them move forward to independence and responsibility. why don't my colleagues disclose a plan for that? isn't that important to america? i think it is. there are a lot of other things that ought to be on the table. the presiding officer: the senator's five minutes have expired. mr. sessions: i thank the chair. there's a lot of other things on the table that we need to be dealing with and talking about and being honest about.

it's time to disclose what our financial plans for the future is, what we're going to do about this debt, what we're going to do about wasteful spending. not being done. it's a disappointing year. i thank the chair and would yield the floor. mr. nelson: mr. president? the presiding officer: the senator from florida. mr. nelson: mr. president, lest we get totally off track here and before the senator from alabama leaves the chamber, i want to thank him and con dprat late him. the system works when democrats and republicans come together. as the senator from alabama and i have worked on many things together, including the nation's national security, so too just recently the senate showed how

it could work on the restore act on the gulf of mexico when we added this act that will direct the fine money that will be imposed by a judge in new orleans, we directed that fine money to come back to the people ask the environment and the critters of the gulf. and that passed in this chamber 76-22, a huge bipartisan vote. i've had the privilege of working with the senator from alabama on many other things, including the times that the two of us led the strategic subcommittee in the armed services committee on some of the nation's most significant things, such as our overall strategic umbrella, protecting this country. and there again, it was democrats and republicans

working together. so to hear a lot of the rhetor rhetoric, someone outside of the senate would think that we are totally in gridlock. that has not been the case. however, we come to a point of gridlock again because of the senate rules requiring 60 votes to shut off the debate so that we can go to this bill called the disclose act. now, what the disclose act does is common sense. it's common sense to say, if you're going to affect the political system by giving money to influence the votes at the ends of the day in an election, all the campaign laws say that you have to disclose that money. and but for a 5-4 supreme court

decision which is contorted at best and is way over the edge at the very least, its ruling comes up and says outside, because of freedom of speech, outside of the political system, you can make advertisements, you can speak freely, in other words, by spending money buying ads and you don't have to disclose that. and oh, by the way, that whereas the campaign finance law prohibits in the federal elections corporations from donating, this contorted supreme court decision says that that can be corporate money and it doesn't have to be disclosed.

well, that's what we're seeing an abundance of that kind of political speech right now. and all of these attack ads, and these attack ads are going just rapid fire. and you look at who it's sponsored by. it's not sponsored by the candidate. it's sponsored by some organization that has a high-sounding name, but you don't know where the money is coming from. now, all this piece of legislation in front of us, of which yesterday we got 53 votes for. we need seven more votes to cut off the debate just to go to the bill. this vote is coming at 3:00. we're not going to get it. it's going to be the same vote, 53-47.

why? because these outside, unlimited source of funds that are not disclosed are affecting elections. and it is achieving the result. and you know it. you put enough tv advertising. you can sell a box of soap, whatever your brand is. that's the whole theory behind this. elect who the undisclosed donors giving unlimited sums, elect who they want and that's going to completely distort the political system. you know, we start from a basis of old is h is a secratic ideask

to socrates. that in the free marketplace of ideas, that the cross-currents of those ideas being discussed, that out of it, truth will emerge and the best course of action will emerge. and it is upon those ideals that this country was found. this country, wanting a representative body such as this, to come forth, freely discuss, freely, openly discuss the ideas and hammer out policy. and yet what we're seeing is that in bringing those elected officials here, by electing them by overwhelming advertising from unlimited sources, those elected representatives will be beholden to those particular sources and

will not have an independence of judgment, will not have the secratic able in the free marketplace of ideas to hammer out the differences of ideas and achieve consensus in order to direct the direction of the country. so the very underpinnings of the country are at stake. now, why is this being fought? something that ought to be like a motherhood bill. you're for disclosure of who all is giving money to influence the political system, just like all of the federal candidates have to disclose? and, oh, by the way, are limited in the amounts of contributions to each candidate. well, what is such common sense

is being thwarted if this legislation were to pass and they had to disclose who is giving the money. and you know what? most of them would stop giving it. and they'd have to operate under the normal campaign finance laws which say, you report every dime of your contribution, you're limited as to the amount that you can give, and the candidate is limited as to the amount that they can receive. now that is fair, but it's more than fair, it's absolutely essential to the functioning of the electoral system in order to elect a representative democracy. that's what's at stake, and that's what we're going to vote on again.

and unfortunately, we know what the outcome of the vote's going to be. 53 in favor of disclosing and 47 against. and you're not going to know who is giving all of this money. mr. president, i -- i can't say it any better. it's old country boy wisdom that says this ought to be as easy as night and day, understanding the difference, and yet that's what we are facing. i yield the floor. ms. murkowski: mr. president? the presiding officer: the senator from alaska. ms. murkowski: mr. president, i have not taken an opportunity to speak to either the disclose act

which is currently before us or the holding of citizens united and i haven't -- i haven't come to the floor to address that, but having said that, it does not mean that this has not been a discussion of -- of great import in the state of alaska. alaskans are a pretty independent lot. i think like to -- like to know what is behind -- what is behind certain initiatives certainly when it comes to -- to the financing of campaigns. they want to know where and when and how and why. and that's appropriate. and our state legislature has -- has enacted some campaign finance reforms that i think have been -- have been good. and have as alaskans i think looked very critically at the citizens united decision and its -- its impact on campaigns

in this country. i have made no secret of the fact that i disagree with the holdings of the citizens united decision. it makes it possible for individuals and business entities to make contributions in any amount, at any time to independent efforts to elect candidates at the federal, the state and the local levels. i think this decision not only overturned long-standing federal law, it also, to a certain extent, displaced state laws, including the laws in my own state of alaska which barred corporate participation in state elections. it gave birth to a new form of political entity. we all know it. we're all talking about it now with -- particularly with the presidential elections. this is the super pac, a vehicle for large donors. when we're talking about large donors, we're not just talking about donors that can put forth thousands of dollars.

we're talking about donors that put forward multimillions of dollars to donors, and it's done to influence the american political process in secret by contributing to organizations with very patriotic names, but they -- they lurk behind post office boxes. there is an anonymity, there is a -- a covering that i don't think that the american public expects nor respects. i believe strongly, i believe very strongly that the citizens united decision is corrosive to democracy and at a very minimum, the american people who deserve to know who is really behind the organizations, who is funding them, what their real agendas are. i think if you were to ask the

average american out on the street do you think it's reasonable that there be disclosure, full disclosure of where the campaign dollars are coming from, i think the average american would say yes. i think the -- i know that the average alaskan is saying yes. and so when -- when they see what this supreme court case has allowed, courts have determined that this is constitutional, i don't think anybody assumed that what it would lead to is an ability for an individual to give millions of dollars to influence and election, and yet not be subject to a level of disclosure that is fair and that is balanced. mr. president, i came to the floor very late last night. you were sitting in the chair. my colleague from new york was -- was actually standing there speaking.

i flew in from alaska. i left at 7:00 in the morning. my plane touched down at about 10:15 last night. as i landed, i looked and i saw the lights of the capitol on. i knew somebody was still home. and i drove home, and the flag that flies on the -- on the senate side of the capitol was still up, meaning that the senate was still in session. so i decided to come to the floor and see what was going on, and to perhaps listen to a little bit of the debate. i was tired, mr. president. i was tired from flying, but i was really tired that as a body, when we have an issue that is as important, as significant as whether it's campaign finance or whether it's the tax issues that

we face, whether it's the -- the sequestration issue that we will shortly be facing, that we are once again in a position where we're doing nothing but messaging. i am so tired of messaging. and i think that the folks that we represent are tired of us messaging. i want, i want us to have some reforms when it comes to campaign finance and the disclosure that the american people thinks makes sense, that they say good, this is not something where you're hiding behind the organization, whether it's a 501-c-4 or 501-c-3 or super pac or whatever it is, however we define it. we want to know that you're open and you're transparent so that we get it. now, i didn't stay too late last night to listen to -- to the

debates, but i will tell you that the comments that i heard from my colleagues were pretty sound. for the life of me, i can't fathom why it is appropriate that the name, the address, the occupation of an individual that makes a contribution of between $200 and $5,000 to lisa murkowski's committee must be disclosed -- that is what is required under the law -- but somehow or other there is a constitutional right for someone who gives a million dollars, $15 million to an independent effort that either supports or opposes my election, that they can do so in secrecy, they can do so in a way that is not subject to disclosure. i don't think that makes sense, and i don't think it would make sense to anybody else out there on the street. what's the difference?

what's the difference? but i would also suggest to you, mr. president, the converse is true as well. i don't believe that the membership lists of whether it's the sierra club or it's the national rifle association or whether it's the naacp, i don't think that those lists need to be made public because an organization has made a relatively small donation from its treasury funds to independent efforts. those who choose to affiliate with broad-based membership organizations deserve, i think, to have their privacy interests maintained, so you've got things going on both sides here. so, again, what we should be doing in this case is trying to figure out where that balance is, where is that fairness? and given that a 2,500-dollar contribution to me as a candidate, the maximum that can be given to any candidate for any election has to be disclosed, i don't understand why with this bill that's before

us, the disclose act 3.0, sets the bar for disclosure of a contribution to an independent effort at $10,000. i -- that doesn't make sense to me either. so i guess where i am at this point in time, recognizing that in a matter of minutes here we're going to have yet another vote on disclose under reconsideration, i do think that all of these issues need to be addressed in a disclose 4.0. maybe we move to that next iteration, but that's not going to be happening here. yesterday's vote was decisive. as i mentioned, i was flying all day. i was not here at 6:00 when that vote was taken, but that vote was pretty clear. there is no way that you can reconfigure things, even with the support of lisa murkowski, so that we could actually get to this bill and start making those changes. so we're sitting here at a point

where we have got precious little time before us before we -- we break for august and then come back, we have got the campaigns. we've got a lot on our plate. i think we recognize that. and saying that, i've already said i think that this is a critically important issue, but it is an issue that we will not resolve today. it is not possible to resolve today, so we should accept that fact, we need to move forward, we have got a lot to do. what i -- what i intend to do is to continue the work that i have begun months ago with colleagues on the other side of the aisle to work to resolve some of these issues. to work on a bipartisan basis on a bill that i hope that we can take up as a body. there are senators who want to

work on this. i have met with them, we have talked about it. we continue to try to figure out that path forward, but that path forward has to be a bipartisan path. it has to be a bipartisan path. i hope that we can put some kind of a vehicle to hearings in the regular order. consider it on the floor with an open amendment process the way that we can and should do things around here. that's what i strive to do. that's my commitment. i want to work with my colleague from rhode island. i want to work with my colleagues from colorado and oregon and new york and my colleagues on the republican side of the aisle. i think we all recognize that this is in the best interests of -- of not only those of us here in the senate, but for those we represent, that there is a level of transparency, openness, fairness and balance when it comes to -- to campaign finance. that's my commitment. with that, mr. president, i know i probably have consumed more

than my time, but i appreciate the -- the opportunity to work seriously and genuinely with my colleagues on this issue. i yield the floor. mr. schumer: mr. president? the presiding officer: the senator from new york. mr. schumer: first, i ask unanimous consent that i be given four minutes, the senator from rhode island be given six minutes to conclude and we vote immediately thereafter. the presiding officer: is there objection? without objection. mr. schumer: thank you. first, i'd just like to make one preliminary comment and then i'd like to address what my colleague from alaska has said in this bill. just on an other issue. i have just heard that vice president cheney came to address the republican caucus on our fiscal cliff. i would suggest that the man who said deficits don't matter is

not a very good teacher for the republican caucus when it comes to deficit reduction and the fiscal cliff. they could get better teachers than that. now, as for this issue, first, i want to thank my colleague from alaska for her heartfelt comments. she is what we need, somebody who cares about this issue, somebody who has great reach across the aisle and somebody who is willing to work with us. it is true, it is obvious that we will not have the votes to win the disclose act. it is simple disclosure. we tried to make it under the leadership of senator whitehouse, i will address that in a minute, we tried to make it as narrow as possible. we tried to deal with all the objections we heard about labor unions and other things. that's why there is a 10,000-dollar amount, far beyond labor dues and any dues that i am aware of. we tried to make it as down the middle as possible for simple

disclosure. but i understand where my colleague from alaska is coming from, i respect it, and i look forward to working with her. she might be the bridge we need, because mark my words, mr. president, if we don't do something about this, we will not have the republic we know in five years. it's that simple. this great country that we all love has been dramatically changed by citizens united and the failure to correct its huge deficiencies. to have such a small number of people have such huge influence on our body public. we have never seen it before. oh, yeah, we read about our history and we know that there were small groups that were powerful in the past, the robber barons, et cetera. but never, never, never have a handful of people had such awesome tools to influence our political system in a way they

choose without any accountability, never. the robber barons were more accountable and more diffuse, the small group that led america supposedly in the 1920's was more accountable and more diffuse, the military industrial complex that president eisenhower warned about was far broader and more diffuse. to have a small number of people, most of them angry people, most of them people who don't even give any attention to someone who doesn't agree with them, to give them such awesome power, which is the power to run negative political ads over and over again and have no accountability as to who is running them, that is a true danger to the republic. and it befuddles me that our

u.s. supreme court doesn't see it. we want our courts to be insulated from the vicissitudes of politics, but to have a court that is so insulate thad it doesn't see, smell, hear, touch what is going on in this republic doesn't speak well of that court, and i think it's the main reason that its popularity has declined. and i hope our justices will wake up and realize what they are doing. now, i would say again -- first i want to thank senator whitehouse. he has been a great leader on this issue. and i want to thank all my colleagues. we have been debating this bill for ten hours, more than ten hours, i believe, and there hasn't been one quorum call, which means that there has been speaking time from 6:00 last night until 1:00 in the morning -- the presiding officer: the senator's time has expired.

mr. schumer: i ask unanimous consent the rest of my remarks be added to the record, and yield the floor. the presiding officer: without objection, so ordered. mr. whitehouse: mr. president? the presiding officer: the senator from rhode island. mr. whitehouse: mr. president, at least -- at least ten republican senators are on record supporting transparency and disclosure in election spending. some of them are very significant leaders on the republican side. senator mitch mcconnell, i think disclosure is the best disinfectant. senator john cornyn, the head of the republican campaign operation, i think the system needs more transparency, so people can more easily reach their own conclusions. other senators, colleagues and friends, come from states that require disclosure in election

spending. the states that they represent know that this is wrong. the arguments against this bill are few. some of those arguments are false. others don't hold water. huge majorities of americans, republican, democrat, and independent, support cleaning up this mess. more than 700,000 americans signed up as citizen cosponsors of this bill in the last few days. i think the actual number is 721,000. but then that ran up against this. outside political spending that went from 1% to 44% not disclosed. in the last election and these secret groups like crossroads

with $76.8 million, the majority of the money that they spend, secret money. and that has changed the debate. but those who are out of the need for that secret money, like republican senators rudman and hagel, are clear. a bill being debated this week in the senate called the disclose act of 2012, this bill, is a well-researched, well-conceived solution to this insufferable situation. we believe that every senator should embrace the disclose act of 2012. this legislation treats trade unions and corporations equally and gives neither party an advantage. it is good for republicans and it is good for democrats. most important, mr. president, it is good for the american people. i urge my colleagues on the republican side to follow the

example of their former colleagues, senator warren, senator rudman, sorry, warren is his first name, senator rudman and senator hagel, and i pledge to senator murkowski we take her comments very seriously. she has cast a sliver of daylight and i intend to pursue that sliver of daylight ardently to work through this problem and i will conclude by also complimenting senator mccain who came to the floor. he believes there is a benefit for unions in here that i do not see, that i disagree exists but certainly he has a record of courage and determination on campaign finance that unless his judgment to our respect and i look forward to working with both of them and others. i yield the floor. i yield back our time. the presiding officer: under the previous order, the motion to proceed to the motion to reconsider the vote by which cloture was not invoked on the motion to proceed to s. 3369 is agreed to and the motion to

reconsider is agreed to. the clerk will report the motion to invoke cloture. the clerk: we the undersigned senators in accordance with the provisions of rule 22 of the standing rules of the senate hereby move to bring to a close the debate on the motion to proceed to calendar number 446, s. 3369, a bill to amend the federal election campaign act of 1971 to provide for additional disclosure requirements for corporations, labor organizations, super pac's and other entities and for other purposes, signed by 18 senators. the presiding officer: by unanimous consent, the mandatory quorum call has been waived. the question is, is it the sense of the senate that debate on the motion to proceed to s. 3369, a bill to amend the federal election campaign act of 1971, to provide for the additional disclosure requirements for corporations, labor organizations, super pac's and other entities, and for other purposes, shall be brought to a close.

the yeas and nays are mandatory under the rule. the clerk will call the roll. vote:

vote:

the presiding officer: are there any senators in the chamber wishing to vote or change their vote? if not, on this the yeas are 53, the nays are 45, three-fifths of the senators duly chosen and sworn not having voted in the

affirmative, the motion upon reconsideration is not agreed to. the clerk will call the roll.

quorum call:

quorum call:

mr. reid: mr. president, is the senate now in a quorum call in. the presiding officer: the senate is in a quorum call. mr. reid: i ask unanimous consent that that be terminated. the presiding officer: without objection. mr. reid: i withdraw my motion pending motion to proceed. fer if the motion is withdrawn. mr. reid: i move to move to s. 3364. the presiding officer: the clerk will report. the clerk: s. 3364, a bill to provide an incentive for businesses to bring jobs back to america.

mr. reid: mr. president, i have a cloture motion at the desk in reference to this legislation. the presiding officer: the clerk will report the cloture motion. the clerk: cloture motion: we, the undersigned senators, in accordance with the provisions of rule 22 of the standing rules of the senate, do hereby move to bring to a close debate on the motion to proceed to calendar number 442, s. 3364, a bill to provide an incentive for businesses to bring jobs back to america. signed by 17 senators as follows: reid of nevada, stabenow, whitehouse, franken, durbin, brown of ohio, blumeening that will, merkley, coons, casey, cardin, shaheen, gillibrand, schumer, reed of rhode island, mikulski, rockefeller. mr. reid: i ask that the mandatory quorum required under rule 22 be waived.

fer if without objection, so ordered. mr. reid: once again, i'm disappointed, as i think most people in the country are, on an issue as timely as this, outsourcsourcing jobs, that we e again are being sometime mid into -- stymied into moving to that legislation. we're going to have a rule on this -- we can't have a vote on this until two days go by, so that's a vote on thursday. and if cloture is i voked on that, then we're only on the bill. and then to get off of it, take another series of days. i mean, get final action on this is going it take a week. that's so unfortunate. that's so unfortunate that we have to go through this, and we've gone through this so many times. and there's, i repeat, not an issue more timely than this, outsourcing jobs. whether it's the olympic

uniforms or the many other jobs that have been lost around this country, the american people are tired of this. and i think it's unfortunate the republicans are stopping us from being able to start legislating on this bill. ms. stabenow: mr. president? the presiding officer: the senator from michigan. ms. stabenow: thank you, mr. president. i rise today to urge my colleagues to support the motion we have before us, to begin consideration of my bill, the bring jobs home act. i want to thank our leader for making this a priority and thank the president of the united states for also making this a priority as we move forward. and let me first start on process to say it is true, of course, as the leader indicated, we could be simply on this bill and working to complete it and to pass it. but unfortunately, as happens on everything now, when the leader attempts to move to a bill, there is an objection to do th that. when there is, it puts us into a

situation where we have to spend several days trying to overcome a potential filibuster to be able to move to the bill. so that's process-wise where we are. but from a substance standpoint, it is absolutely critical that we move to this bill and that we pass it. the great recession and the financial collapse of 2008 were absolutely devastating to our economy. we know that during that time, 8 million americans lost their jobs. 8 million americans. many, many still struggling to get out of their own deficit hole because of what happened. these are people who have worked all their lives and played by the rules only to have the rug pulled out from under them. many of these people were -- were folks who worked in manufacturing and many in my great state of michigan. we are so proud that we make things in michigan and we don't

have a middle class, we don't have an economy unless we make things. and that's what we do in michigan. and for decades, this has been the foundation of our economy and it, frankly, created the middle class of this country and we're proud that it started in michigan with the beginning of the automobile industry. it's no coincidence that as those jobs have disappeared over the decades, that the middle class has begun to disappear as well and families are feeling more and more difficult -- are feeling in more and more difficult situations permanently as a result of that. those jobs have been the driving force of our economy for decades, as i indicated. those jobs are the jobs that have allowed the greatest generation to build the greatest economy in the world. the greatest economy we've ever seen. and those jobs led to tree-lined streets with at least one car in

every driveway and the freedom to raise a family and send them to college and maybe have the cottage up north or be able to take family on vacation and have the american dream. today, in fact, that dream is in jeopardy and every american family knows that. but it doesn't have to be that way. in the last decade, companies shipped 2.4 million jobs overseas. 2.4 million jobs were shipped overseas. and to add insult to injury, american taxpayers were asked to help foot the bill. you know, it's amazing when i explain that to folks in michigan, they say, you've got to be kidding. or they say other things that i can't repeat on the floor of the united states senate. just imagine if you are one of those workers in michigan, or in virginia, or in ohio, or in wisconsin, or anywhere in this country who maybe was forced to

train your overseas replacement before you were laid off. imagine what your reaction would be. more colorful than i've been able to state here. when an american worker is asked to subsidize the moving expenses, as they do today under current tax policy, the moving expenses and costs so their own job can be shipped overseas, there is something seriously wrong with our tax code and with our priorities. it does not have to be that way. in fact, we can change that. we can change that this week on the floor of the senate by passing the "bring jobs home act" and sending it to the house and then sending it to the president, where i know he will enthusiastically and immediately sign it. instead of rewarding companies for shipping jobs overseas, we want to reward companies for bringing jobs home. that's the whole point of this bill.

we stop the tax deduction for moving expenses related to moving jobs overseas. that's what this bill does. right now you can deduct those expenses as part of your business expenses. we say, no more. secondly, we say, however, if you want to come home, we'll happily give you that deduction for the costs of moving back to the united states and we will add an additional 20% tax credit for those costs of bringing jobs back to the united states. that's what we are doing in the bring jobs home -- in the "bring jobs home act." this is just common sense, unfortunately not that common these days. but it is common sense, and it's good economic sense as well, mr. president. it is so important that we pass this bill.

we talk about tax reform, we talk about having a lot of tax loopholes. this is one we can eliminate right now together on a bipartisan basis. let's start here. number one loophole, we'll close it. number one priority, jobs in america. now, i know some of my colleagues don't believe that these jobs are ever coming back. i hear that all the time. we in michigan have been seeing that same defeatist argument for 20 years. but, in fact, that's not true. and one of the things that i'm proudest of in the last 3 1/2 years is that we have refocused on advanced manufacturing, making things in america in this country. we have a lot more to do but we have, in fact, refocused on jobs here at home. and we are seeing, because of that, a whole range of policies, whether it's the advanced manufacturing tax cut i authored in the recovery act that allows

a 30% write-off for clean energy manufacturing jobs, or whether it's the retooling loans that we put in place to be able to help retool plants, to be able to modernize them with advanced manufacturing, it's bringing jobs back. we have put in place some initial things that are making a difference and we are now seeing every month that manufacturing is having an uptick. it's been really one of the -- the only areas that has seen pretty much every month, we've begun to see a slow return. we're beginning to see some of these jobs come back as a result of that. our companies are doing the calculations, finding out that bringing jobs home makes good business sense. and it's time our tax code -- tax code stops standing in the way and actually caught up with what many businesses are doing.

ford motor company brought jobs back from mexico to support advanced vehicle manufacturing at their newly retooled wayne assembly plant in wayne, michigan. chrysler's growing and expanding their operations here in the united states, investing 95%, i believe, is the last number i heard of their investments are being done in america and we're proud to have them investing in detroit and in michigan. and last week we saw reports that g.m. is about to go on -- quote -- "a hiring binge" -- and i love this. i love anything called a hiring binge -- as they bring almost all of their information technology needs back in-house and to america. we have a great company in detroit, actually from new jersey now in detroit, galaxy solutions, who has an outsource to detroit effort going on to bring i.t. jobs back from places like india and brazil and china.

and they have on the side of one of our largest buildings, mr. president, this great sign that says, "outsource to detroit." if we're going to outsource somewhere, let's outsource to our american cities. and we love the fact that they are part of the effort to rebuild and refocus on detroit. we have companies that want to invest in america. we have stories about g.e. coming back. we have stories in every state of companies that are bringing jobs back to america. we have men and women who want to work, we have companies that are looking at bringing jobs back. and cnbc called it the stuff that dreams are made of. i think that going forward, the great economic resurgence for us is involved in advanced manufacturing, making things in america and bringing our jobs back to america.

and it is more than time. it's what our workers are dreaming of. and we are proud in michigan of our work force, these folks that know how to work, they want to work, they work hard every day. and i have to say that efforts like outsource to detroit are giving them a new chance to do that, as well as the other efforts that are going on around michigan. there are so many opportunities right here in america. we've got the great new ideas. we've got the ingenuity, the innovation. we just make -- we have to make sure we have the right policies to make it happen. that we around doing anything in our tax code that encourages jobs to go overseas, that we do everything possible to support efforts to bring them back and then to reinvest and to expand upon research, development, innovation, retooling the plants that we have, reinvesting in communities, reinvesting in our

cities and focusing on a strategy of american jobs. that's what everyone wants us to be doing. and there's a great place to start and that is with our tax code so that it catches up with what leading-edge business leaders already know: american businesses, american workers can compete with anybody in the world if we have a level playing field and we give them a chance to do it. this is really a moment, i believe, for us to indicate very strongly to everybody in the country that we get it and that we're not going to allow the tax code to continue to create a situation where if someone wants to close up shop and move overseas, they get a tax write-off as a result of that.

that that makes absolutely no sense. you know, i can't imagine any other country in the world allowing that to happen. when i think about places like china, where, madam president, at this point, they'll -- they say, come on over, we'll build the plant for you. forget about a retooling loan. we'll build the plant for you. of course, then we'll steal your patent. and there's a whole range of other challenges. but come on over and we will build the plant for you. the last numbers i saw showed that china was spending $288 million a day -- it's probably more now -- on clean energy policies in manufacturing and new cutting-edge efforts to try to compete and beat us in an area that we should own. you know, between our universities and our businesses and our great work force, we ought to completely own these technologies. now, i'm very proud to say that michigan is now number one in

new clean energy patents, and we were proud to open last friday the first u.s. patent office outside of washington, d.c., in detroit, michigan. as a result of that. and there are great ideas happening all over this country right now. innovators. frankly, people who have lost their jobs and are now back in their garage or their basement or the extra bedroom with new ideas. we want to create businesses, support their creation of businesses by incentivizing th them. not having a tax code that incentivizes somebody to move overseas. so this legislation i think is pretty simple, madam president. it's very simple. it's about bringing jobs home to america and it's very simple. we're going to stop writing off

the costs, allowing that business to be subsidized by all of us, including the people they lay off, in order to move overseas and instead we're going to say, no, you move overseas, you're on your own. but if you want to come back, we are happy to allow you a business deduction for those moving expenses and we will add another 20% towards the costs of your expenses on top of it. that's what we should be doing. that's smart tax policy. it's common sense. it's one step in a series of things that we need to do in order to be able to bring jobs home and make things in america again, and i hope that we will see an overwhelmingly positive bipartisan vote on this bill. it would send a wonderful message that we can work together. you know, we worked together not long ago to pass a farm bill

with a strong bipartisan vote because we know we need to grow things in america. we need to make things and grow things. that's how you have an economy. that's how we have a middle class in this country. we came together and i'm very appreciative of everyone coming together working with senator roberts and i to be able to get that done. this is another opportunity, another way for us to come together and say we get it, we understand what's going on in the country, and let's work together and let's get the job done. so i strongly urge colleagues to come together and to pass the bring jobs home act. thank you, madam president.

ms. stabenow: madam president, i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

a senator: madam president? the presiding officer: the senator from north dakota. mr. hoeven: i ask the quorum call be suspended. the presiding officer: without objection. mr. hoeven: i rise to speak on the need for comprehensive pro growth tax reform.

one week ago monday, president obama proposed to raise taxes on over one million small businesses in this country. even though he has said in the past that we cannot raise taxes in a recession and that higher taxes will hurt our economy and hurt job creation, he proposed raising taxes on more than one million small businesses across this country. so last week i came to the floor to talk about why that is not the right approach and to discuss the approach that we should take, the right approach. i pointed out that his approach, the administration's approach, has made our economy worse since he has taken office. now, here the facts speak for themselves. let's go through some of those facts. today we have 8.2% unemployment. we have had over 8% unemployment for 41 straight weeks. we have 13 million people who are out of work.

more than 13 million people who are looking for work and another 10 million people who are underemployed. that's 23 million people who are either unemployed or underemployed. middle-class income. middle-class income has declined from an average of $55,000 down to $50,000 since the president took office. food stamps, food stamp usage is up. 32 million food stamp recipients at the beginning of the obama administration, today 46 million recipients. so we have gone from 32 million people on food stamps to 46 million people on food stamps. home values have dropped from an average of $169,000 to an average of about $148,000. economic growth. g.d.p. growth is the weakest for

any recovery since world war ii. in the last quarter, the rate of growth was 1.9% over the prior quarter. job creation. june's numbers, 82,000 jobs created in the month of june. we need 150,000 jobs gained each month just to keep up with population growth and to reduce the unemployment rolls. so those are some of the statistics, but when i spoke on the floor last week, i also read a letter from one of my constituents back home, a small business owner. he owns an ace hardware store. and in his letter, he stated very clearly and very eloquently that the president's approach and his approach with small business is hurting our economy. i'm not going to read the full letter, but i do want to read one of the lines, a couple of the lines in his letter. in the letter, he states the

president's program -- programs not only limit my company's potential to grow but they destroy any incentive to work and hire more people. i just don't know if he doesn't understand what he's doing or he just doesn't care. i'm taking that right out of a small business person's letter. so keep that last line in mind for just a minute. quote -- "i just don't know if he, president obama, doesn't understand what he's doing or just doesn't care." end quote. and i reference that because the president gave a speech last friday. he was in roanoke, virginia. in his speech, he followed up on his plan to raise taxes on small businesses, he followed up with the following, and i'm going to read right from the president's speech because i think it gives

insight as to his view of small business and how our economy works. so this is right out of his speech. there are a lot of wealthy, successful americans who agree with me because they want to give something back. they know they didn't look. if you have been successful, you didn't get there on your own. you didn't get there on your own. i am always struck by people who think well, it must be because i was just so smart. there are a lot of smart people out there. it must be because i work harder than everybody else. let me tell you something, there are a whole bunch of hard-working people out there." again, this is from the president's speech and i'm quoting directly. he goes on -- "if you were successful, somebody along the line gave you some help. there was a great teacher somewhere in your life. somebody helped to create this unbelievable american system that we have that allowed you to

thrive. somebody invested in roads and bridges. if you have got a business, you didn't build that. somebody else made that happen. the internet didn't get invented on its own. government research created the internet so that all the companies could make money off the internet." end quote. so that's right out of the president's speech in roanoke, virginia, last friday. i think these comments provide real insight into president obama's view of our economy and the role of small business in our economy. he says that we have all had help in our lives, and that's certainly true, no question. i don't think anyone disputes that. but he makes clear that he believes government, not small business, is the driver of our economy. he says that it's government that paves our roads, it's

government that invented the internet. in essence, it's government that made successful people successful and government that makes our economy go. and that's just not right. it's small business that makes our economy go. it's small business that made our economy the envy of the world. it's small business, small businesses that serve as the backbone of our economy, that employ our people, that generate tax revenue to build our roads, that create innovation like the internet and that provides americans with the highest standard of living in the world. small business is the engine that drives our economy, and we need to get it going, and you don't do that by raising taxes and growing government.

clearly, that's not the way to go. but the president says well, everyone needs to pay their fair share. well, again, of course everyone needs to pay their fair share, but the way to ensure that that gets accomplished is with pro growth tax reform, comprehensive pro growth tax reform and closing loopholes. let's extend the current tax rates for one year, and let's set up a process to pass comprehensive pro growth tax reform that lowers rates, that closes loopholes, that's fair, that's simpler and that will generate revenue to reduce our deficit and our debt through economic growth rather than through higher taxes. the reality is that's the only way to go, along with reducing government spending that will get our debt and our deficit under control and that will get

our people back to work. to be successful, this effort needs to be bipartisan. and the clock is ticking. so let's get started. let's give small business in this country the legal tax and regulatory certainty to encourage private investment and innovation. that's the american way. that's the real american success story. we can do it, and we need to make it happen now. thank you, madam president, and i yield the floor. the presiding officer: the clerk will call the roll. quorum call:

mr. grassley: madam president? the presiding officer: the senator from iowa. mr. grassley: i suggest -- i ask that the calling of the quorum be suspended. the presiding officer: without objection. mr. grassley: madam president, i come to the floor to address my colleagues about a federal agency that has forgotten that this federal agency is supposed to be working for the american people. this is an agency that has gotten really too big for its britches. some of its officials have forgotten who pay their salary. the food and drug administration is supposed to protect the american people. except lately, the only thing that the f.d.a. bureaucrats seem to have any interest in is

protecting themselves. according to whistle-blowers and published reports in "the washington post" and "the new york times," the agency in charge of safeguarding the american public and providing for the public safety has trampled on the privacy of its very own employees. the f.d.a. mounted an aggressive campaign against employees who would dare to question its actions and created what "the new york times" termed an enemies list of people it considered dangerous. it kind of reminds you of president nixon and the i.r.s. going after enemies. the food and drug administration has been spying on this enemies list. the f.d.a. has been spying on the personal emails of these

employees, and everybody that these employees contacted. that includes their protected communications even with those of us in congress. we would not have known the extent of the spying if internal f.d.a. documents about it had not been released on the internet, apparently just by accident. we would not have known how the f.d.a. intentionally targeted and captured confidential personal emails between the whistle-blowers, their lawyers, and those of us in congress. in these internal documents, the f.d.a. has never wanted the public to see, it referred to whistle-blowers as -- quote, unquote -- "collaborators. f.d.a. refers to congressional staff as ancillary actors.

f.d.a. refers to newspaper reporters as media outlet actors. these memos make the f.d.a. sound more like the east german stasi than a consumer protection agency in a free country. at the beginning of commissioner hamburg's term, she said whistle-blowers expose critical issues within the f.d.a. that seems to be a very approving comment. she vowed to create a culture that values whistle-blowers. that appears to be a very approving statement. in fact, in 2009 she said and i want to quote, "i think whistle-blowers serve an important role" end of quote. i wanted to believe commissioner hamburg when she testified before the senate committee during her confirmation.

i wanted to believe her when she said she would protect whistle-blowers at the food and drug administration. however, the facts now appear very, very different. in this case, the f.d.a. invaded the privacy of multiple whistle-blowers. it hacked into the private email accounts and used sophisticated key stroke logging software to monitor the entire and every move online. when an f.d.a. supervisor was placed under oath in the course of an equal employment opportunity complaint, that employee, that supervisor, testified that the f.d.a. was conducting -- quote, unquote -- "routine security monitoring." that is entirely false.

this monitoring was anything but routine. it targeted specifically at five whistle-blowers. it intentionally captured their private email to attorneys, to members of congress, and to the office of special counsel. the internal documents showed that this was a unique, highly sophisticated and highly specialized operation. according to the office of inspect tore general -- inspector general, the food and drug administration had no evidence of any criminal wrongdoing by these whistle-blowers. this massive campaign of spying was not just an invasion of privacy. it was specifically designed to intercept communications that are protected by law. the office of special counsel,

you know, is an agency created by congress to receive whistle-blower complaints and to protect whistle-blowers from retaliation. the law protects communications with the special counsel as a way to encourage whistle-blowers to report waste, fraud, abuse, mismanagement, and threats to the public safety, and to do that reporting without fear of retaliation. the f.d.a. knew that contacts between whistle-blowers and the office of special counsel are privileged and confidential. but the james bond wannabees at the f.d.a. just didn't seem to care what the law said. in the end, the self-appointed spies turned out to be more like bumbling maxwell smart. along with their own internal

memos about spying, the fruits of their labor were also accidentally posted on the internet. it's tens of thousands of pages of emails and pictures of the whistle-blower computer screens containing some of the very same information that the f.d.a. bureaucrats were so keen to keep secret. when i started asking questions about this, f.d.a. officials seemed to suffer from a sudden bout of oom nearbya, collective am nearbya. it took them -- am niecia. it took them more than six months to answer a letter last january starting my investigation of this issue. when i pushed for a reply during those six months, f.d.a. told my staff that the response would take time to make sure it was accurate and complete.

when i finally got the response on friday, it doesn't even answer the simplest of questions, such as who authorized this targeted spying. and isn't it a coincidence, just friday, before "the new york times" article was going to come out, sometime they finally answered a letter going way back to my questions of january. worse than that, though, it is misleading in its denials about intentionally intercepting communications with congress. when i asked them why they couldn't just answer some simple questions, they told my staff that the response was under review by the -- quote -- "appropriate officials in the administration." end of quote. the nonanswers and the doublespeak would have fit right into some george orwell novel. of course when my staff dug deeper, and asked if the response was being reviewed by

the office of management and budget, the food and drug administration responded no, it wasn't being reviewed by o.m.b. f.d.a. refused to identify who within the administration was holding up the f.d.a.'s response to my letter. now, that's in an administration that said on january 20, 2009, they're going to be the most transparent in the history of this country. f.d.a. refused to say how long it had been sitting on that person's desk or why it had been approved by the political officials outside the f.d.a. who is this shadowy figure conducting some secret review of the f.d.a.'s responses to this senator's questions? why was there all -- all of a sudden interest in exerting political control over the correspondence of this supposedly independent federal agency?

and when we use the word "independent federal agency" around here, we mean not subject to political control. we need answers, and we need answers now. i've been demanding answers for six weeks -- or six months. for the past six months, f.d.a. has been telling me just be patient. f.d.a. has been telling me that they have a good story to tell, and that's their words. a good story to tell. apparently, though, there's someone in this administration, president obama's administration, who didn't want them to say anything for as long as they could possibly get away with not saying anything. i finally got commissioner hamburg on the phone in june this year. commissioner hamburg personally assured me that the f.d.a. was going to fully cooperate with my investigation.

and yet the f.d.a. has provided me with nothing but misleading and incomplete responses. the f.d.a. has failed to measure up to commissioner hamburg's pledge of cooperation. the f.d.a. buried its head in the sand in hopes that i would lose interest and go away. they don't know me very well. and that's not going to happen. i don't care who is in charge of the executive branch, republican or democrat. i am going to continue demanding answers. when government bureaucrats obstruct and intercept my communications with protected whistle-blowers, i'm not going to stop. when government bureaucrats stonewall for months on end, i will not stop. when government bureaucrats try and muddy the waters and

mislead, i will not stop. i intend to get to the bottom of it. i will continue to press the f.d.a. until we know who authorized spying -- can you imagine spying in american government, a transparent government? supposed to be transparent. spying on whistle-blowers that are protected by law, that have a special office set up to protect them. and spying on communication between a lawyer and their client. someone within the f.d.a. specifically authorized spying on private communications with my own office, and with several other members of congress. someone at f.d.a. specifically authorized spying on private communications with congressman van honorable's office. -- congressman van hollen's office. someone authorized spying on private communications with the staff of the senate committee on

on -- special committee on aging. someone at f.d.a. specifically authorized spying on private communications with the lawyers for whistle-blowers, and those lawyers are called the office of special counsel. these whistle-blowers thought the f.d.a. was approving drugs and treatment that it shouldn't. these whistle-blowers thought the f.d.a. was caving to pressure from the companies who were applying for f.d.a. approval. they have a right to express those concerns without any fear of retaliation whatsoever. if the law is going to be followed. the law protecting whistle-blowers. but after doing so, two of these whistle-blowers were fired. two more were first forced to leave f.d.a. and five of them were subjected to an intense spying campaign.

senior f.d.a. officials may have broken the law. they authorized the capturing of personal email passwords through key stroke logging software. that potentially allowed them to log in to the whistle-blowers' email accounts and access emails that were never even accessed from a work computer. without a subpoena or warrant, that would be a criminal violation. after six months, the f.d.a. finally denied that occurred. however, that denial was based on the word of one unnamed information technology employee involved in the monitoring. we need a more thorough investigation than that. i have asked the f.d.a. to make that person and several other witnesses available for interviews with my staff.

we will see how cooperative f.d.a. plans to be now. i will continue to press the f.d.a. to open every window and every door. eventually enough sunlight on this agency will cleanse it. the f.d.a. gets paid to protect the public, not to keep us in the dark. secret monitoring programs, spying on congress, retaliating against whistle-blowers, this is sad comment ary on the state of affairs at the f.d.a. i know that there are hardworking and principled rank and file employees at the f.d.a. who care very much about their mission to protect the american public from harm. unfortunately, all too often those rank-and-file employees are unfairly tarnished by others, such as those involved

in this spy ring. this is a sad commentary on president's promise to the american people that this would be the most transparent administration in history. the american people can't lose faith in the f.d.a. unfortunately, after this debacle, some of that faith may deteriorate. the f.d.a. has a lot of work to do to restore the public's trust. i yield the floor and suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

a senator: madam president? the presiding officer: the senator from utah. mr. hatch: i ask that the quorum call be dispensed with. the presiding officer: without objection. mr. hatch: madam president, the american people are struggling. our economy is barely keeping above the water -- its head above the water. millions of citizens remain out

of work. president obama has spent trillions in taxpayer dollars, and there's nothing to show for it. he talks about investments, investments in infrastructure, in roads and in bridges. well, he has spent trillions. where are the roads? where are the bridges? where's the new electrical grid? his reckless spending is a sin of commission. but the administration's sins of omission are perhaps worse. with businesses and families lacking any certainty at all about their tax rates next year, the president and his liberal allies have nonetheless steadfastly refused an extension of the 2001 and 2003 tax relief. even worse, they are so committed to raising taxes on small businesses, the same small businesses that must be cultivated to get our economy and job growth moving again, that he and his democratic allies in the senate have put their feet down and are denying tax relief to anyone unless they

get their way on tax increases. and make no mistake about it, increasing taxes is what they intend to do. and they intend to do it so they can spend more. they live to raise taxes. it is almost as though their only source of pleasure is hiking taxes. taking money out of the private sector and controlling it for their liberal agenda is like some power trip for the left. and don't fall for that red herring fiscal responsibility argument advanced by my friends on the other side. if you look at a comparable policy between the hatch-mcconnell amendment and the democratic leader's position, they differ by about $41 billion for the policy for 2013. that $41 billion represents 1.1% of the spending proposed in the president's budget for 2013. the house budget rejected by our friends on the other side would reduce the deficit by restraining spending by $180

billion, more than four times the deficit reduction that would be achieved through the tax hikes insisted upon by the democrats. what does this tax increase mean in terms of harm to the economy? my friends on the other side of the aisle should consider this. today a study commissioned by the national federation of independent businesses, the s corporation association and the u.s. chamber of commerce confirmed again that the president's attempt to stick it to the rich is going to end up skewering and small businesses and families that would like to work for them. this report by ernst & young and authored by dr. robert carol and gerald pront found if the president gets his way the economy will be 1.3% smaller than it would be and there would be 710,000 fewer jobs.

study after study confirms that the president's policies prioritize spreading the wealth around, overgrowing the economy and creating jobs. the vice president spoke yesterday about the values of republicans and the values of democrats. naturally he spoke pejoratively about republican values. i disagree with him, naturally, on his negative assessment. but i do agree that there is a clear distinction, a clear choice between the values embraced by republicans and democrats. republicans want to grow the economy and create jobs so that american families can thrive. however, to judge by their single-minded pursuit of tax increases, president obama and his liberal allies appear to value a politics of class envy and wealthy redistribution. having washington bureaucrats manage the economy in the name

of wealth equalization is their first priority, regardless of any evidence that this tax policy undercuts economic growth and job creation. unfortunately, the president's economic ethic is significantly hampering our economic recovery with disastrous consequences for america's families. today ben bernanke -gs -- the chairman of the federal reserve testified before the senate banking committee. as the democratic leadership and the president ignored the fiscal cliff, chairman bernanke's words are a somber reminder of what we face if we do not address the fiscal cliff he. he testified that the recovery -- quote -- "could be endangered by the confluence of tax increases and spending reductions that will take effect early next year if no legislative action is taken." he stated that the public uncertainty about the resolution of these issues is a negative

drag on the economy. and he concluded that addressing this cliff -- quote -- "earlier rather than later would help reduce uncertainty and boost household and business confidence." but instead of he addressing these critical economic issues, the senate spent another day voting on the same doomed piece of partisan legislation. rather than take on the hard work of addressing the fiscal cliff that our economy is approaching, we spent precious time yesterday debating the disclose act. for those who are not aware, this is a bill that had one purpose: to discourage political engagement by president obama's opponents. it takes a pretty bad bill to unify the aclu -- that is the american civil liberties union -- and the n.r.a. against it. but the disclose act has brought the liean and the lamb together -- the lion and the lamb together against it. it is bad enough we spe ant of

yesterday debating a bill that has no shot of becoming law, it is even worse we devote nearly an entire day -- today -- to debating t same bill again. in the meantime the american people continue to suffer under this weak economy. and to defend their lack of action, the president and his allies have engaged in some revisionist fiscal history. i want to begin by correcting the record on this revisionist fiscal history. i will follow that with a discussion of the other side's insatiable appetite for taxes and spending. we've recently been debating whether we should adopt the president's policy to raise taxes on small business. we've also discussed the tax monster that is stalking the american people under the guise of obamacare. in both of these debates, we've heard a good deal of fictional accounting. these accounts share much with other stories we have heard from the other side over the past decade. you thaer from our friends in the -- you hear it from our

friends in the majority whenever the senate discusses spending or tax policy. i have noticed that the arguments boil down to two points. my friend and colleague, the former chairman and ranking member of the senate finance committee, senator grassley, came up with this thumbnail description of this creative historical account. first, evolve the so-called good fiscal history of the 1990's -- first, this is -- let me get into this the right way. first, all of the so-called good fiscal history of the 1990's was derived from the partisan tax increases of 1993. that's their argument. second, all of the supposedly bad fiscal history taking place within the past ten years is to be blamed on the bipartisan tax relief plans originally enacted during the last administration and continued under the present administration. you could go one step further

and, as a policy premise, refine that thumbnail description to two short sentences. first sentence: lower taxes are bad. second sentence: higher taxes are good. not surprisingly these revisionist historians support higher taxes and higher government spending, and not surprisingly the revisionists oppose cutting taxes and cutting government spending. i direct folks to senate floor remarks i made on valentine's day last year. it is important to reiterate the important points of those remarks. our friends are certain that raising taxes was the degrowing the economy in the 1990's and raising taxes could work this magic again. a quick look at data from the 1990's shows that this assertion can be summarily dismissed. i have a chart here. according to the clinton administration'clintonadministrf

management and budget, or o.m.b., the impact of the much-bragged-about tax-hike bill of 19 the 3 was minimal. the clinton administration's o.m.b. concluded that the 1993 tax increase accounted for only 13% -- as you can see the green part on that circular chart. the 1993 tax increase accounted for only 13% of deficit reduction between 1990 and 2000. 13% puts the 1993 tax increase behind other factors such as defense cuts, other revenue, and interest savings. the data clearly show that tax increases did not drive the deficit reduction. so, as a matter of fact, only 13% really of the positive fiscal history in the 1990's is due to the partisan 1993 tax increase. that's it.

13%. it's right here in the green part of that chart. well, what about the last decade, the period of 2001-2010 saw a lot of deficits. from what you hear from our friends on the other side, those deficits are a direct result of the tax relief that benefited virtually every american taxpayer. yet c.b.o. tells us a different story. on may 12, 2011, c.b.o. release add recap of the charges. c.b.o. projected a surplus of $5.6 trillion. over the decade, deficits of $.2 trillion materialized. that's swing of $11.8 trillion. what did c.b.o. say were the causes? my friends on the other side might be surprised to learn that the answer is not primarily tax

relief. higher spending accounts for 44% of the change. higher spending, no question about it. let me just repeat that. higher spending was the biggest driver of the deficits of the last decade. economic and technical changes in the estimates accounted for 28% of the change. so all tax relief, including the tax relief passed by democratic congresses and tax relief signed into law by president obama, accounts for 28%. the tax relief legislation, much-maligned by our friends on the other side, accounts for less than half of the fiscal change attributed to tax relief. the bipartisan tax relief bills of 2001 and 2003 including the a.m.t. patches accounted for 1.7% of the fiscal change of the last decade. that's not orrin hatch speaking. it is the nonpartisan

congressional score keeping c. so how much of the bad fiscal here of the last decade is attribute to believe tax relief in 28%. that's it. that includes the tax cuts in partisan bills like the stimulus. if you isolate the bipartisan bills that are the object of sharp criticism by our friends on the other said, the 2001 and 2003 tax cuts, you will find that those bills account for only 13.7% of the fiscal change in the last decade. abnormally low levels of spending contributed significantly to the surpluses of the 1990's. abnormally high spending drove the deficits of the past decade. abnormally high spending is driving our current deficits, and it will drive our future deficits as well. to my friends on the other side, if we focus instead on hiking taxes way above their historic average, we are misreading and mistreating the problem.

the reason for our previous surpluses was low spending, and the reason for our current deficits is high spending. we cannot tax our way to fiscal health. now, madam president, i would turn to a second issue that demands a response. and as a corollary of the revisionist fiscal history i just discussed, it is the insatiable spending we see from the president and my friends on the other side of the aisle. last week president obama once again called for tax increases in order to fund his so-called progressive vision of government. i'm specifically speaking of the president's latest proclamation that the tax relief of 2001 rand 2003 -- tax relief supported by the president and 40 senate democrats in 2010 -- should not be extended for people earning $250,000 or more a year.

this was breathlessly reported in some quarters of the fourth estate, as if it constituted news. in my opinion, the more proper and accurate response would be to borrow from president ronald reagan when he said, "there you go again" to jimmy carter in the 1980 debate. perhaps ironically president reagan was responding to president carter's comments on a national health insurance proposal. president reagan was more right than even he knew, getting back to taxes and the role of government, president reagan was making the same point that this chart shows. as you can see, liberal logic. many problems, always the same solution. health care is too expensive. raise taxes. spending is oust control. raise taxes. gas prices are too high. raise taxes. too many people unemployed. raise taxes.

it's a broken record. no matter what problem faces the left, the answer is always the same. more taxes are always needed in order to increase the size and scope of the government in people's lives. the supreme court recently affirmed the point of this chart. the liberal solution to rising health care costs and lack of coverage were tax increases. the propensity of president obama and his ideological allies to raise taxes is nothing new and it is widely acknowledged as well. back in august 2008, david lionhardt wrote a piece in "the new york times" that quoted th then-candidate bam. here's what he said. quote -- it was entitled "obamanomics." "if you talk to war reason, he'll tell you his preference is not to meddle in the economy at all -- let the market work, however way it's going to works

and then just tax the heck oust people at the end and just redistribute it." obama said. "that way you're not impeding efficiencicy, and you're achieving equity on the back end." unquote. in order that people may peruse the whole so, i ask unanimous consent that the internet web address to mr. loenhardt be printed in the record. the presiding officer: without objection. mr. hatch: the warren cited in this quote is none other than warren buffett. he is a friend of minors but, you know, the same buffett from which the buffett rule or buffett tax is named. setting aside the ridiculous notion that americans are oblivious to taxes as cattle are the purposes of the slaughterhouse, they are being led into, this quote is very -- this quote very accurately illustrates the liberal attitude

toward taxes, which is that they always need to go up. the chart behind me illustrate s government revenue as the percentage of g.d.p. just look at that. the purple line at the top is total government. the red line is federal government. and the green line is state and local government. when you combine them together, you get the purple line. and it's well over 25% for most of the time, for most since 1970 right up to 2010. there are some fluctuations but over the last 40 years, revenues have been roughly stable. you can see it in the past ten years, a dip around the time of the so-called tax relief was enacted, followed by a rebound as the tax cuts promoted growth, followed by a dip in revenue as the recession set in. as you can see, it came down right around 2000 and then went

up a little bit more and then came down again. according to the c.b.o., as of june 5, 2012, federal revenues averaged 17.9% of g.d.p. over the past 40 years. the same c.b.o. report, the 2012 long-term budget outlook, forecast that under current law federal revenues will be 18.% of g.d.p. next year in 2013, and will be 23.7% of g.d.p. in 2037. someone could say that current law is not realistic in that some tax provisions that are to expire will likely be extended. to account for this, c.b.o. has an alternative fiscal scenario which assumes the extension of certain tax policies through 2022. c.b.o. assumes that this would lead to federal revenues increasing to 18.5% of g.d.p. in

2022 with that level being preserved going forward. we definitely know that president obama does not support the assumptions that are part of c.b.o.'s alternative fiscal scenario because earlier this week he called for taxes to increase and hundreds on hundreds -- on hundreds on hundreds of small businesses, actually a million of small businesses, business owners. the question remains, why do my friends on the other side think that taxes always need to go up? the answer to this question is more complex than i'm going to discuss right now, but part of the answer is that taxes need to go up in order to increase the size and scope of government in the lives of all americans. now, here's another chart that compares state and federal government revenues, which we have just examined, with total government spending. you'll notice, total government spending is the purple line on the top most of the way through,

except where it intersects with the red line, which is total government revenue, in the year 2000, and all of a sudden total government revenue goes down. but total spending seems to go up. -- between -- well, between actually 2005 and 2010. we've seen that over the past 40 years it looks like spending has been inclined to move upward but only in the past three years has it jumped to unprecedented height. virtually every action taken by the obama administration and the senate democratic leadership has amounted to an increase in the size and scope of government. the continuing government takeover of health care is just the single-most prominent example right now. on all fronts president obama's expansion of government is on the march, trampling whateverest goes in its way. the chart behind me is a combination of federal and state

spending. if we're just talking about the federal government, in the c.b.o. document i cited earlier, it is projected that debt will eventually reach 200% of our economy, that means of the g.d.p.; that health care spending will rise to record levels, and that medicare and social security are on a path to disaster. getting back to the chart, it combines state and federal spending and revenues in the red -- in the purple line, what i find particular striking is the large gap between the spending and revenue lines. once again, as c.p.o. has indicated, that i gap is likelyo increase to more than half of our total economy. spain is a little more than half of that. in other words, spain is around 70%, if i recall correctly. yet spain is considered in real

trouble. and europe. now, once again as c.b.o. has indicated, that gap is likely to expand to twice of our whole economy. look at this. i apologies for being repetitive, but if there is one message that should be taken from my remarks today, it's one that i and others have been making for a long time. that message is that the united states does not have a tax problem; it has a spending problem. we keep hearing that republicans are too beholden to an antitax ideology and that any resolution of our debt crisis will require the republicans get with the program and acknowledge the need for increased taxes. as i have shown, this characterization of our fiscal and political problems is not even close to half-right. by far, the greatest cause of