Main Street Revitalization Act of 2010

Mr. President, I rise to speak on behalf of nearly 1 million people who have lost their jobs, who have now also lost their unemployment insurance benefits because of the extensive obstacles and objections that have been put forward in the Senate to extending this important program. I wish I could say this was the first time that had happened. It seems that every time we come to the floor in the middle of these very difficult economic times, even though things are getting better, every time we come to the floor on behalf of people who are out of work, who want to work, who have worked their entire lives but at this point can't find a job, all we get are objections and delays and weeks and weeks and weeks of people sitting on pins and needles, holding their breath, trying to figure out what is going on: Will they have the ability to pay the rent, the mortgage, put food on the table, be able to care for their kids while they are looking for work. Here we are, right back in that very same position.

Right now we have over 15 million people who are on unemployment benefits. That doesn't count those who are working part-time jobs or have fallen off of the system completely because they haven't been able to find a job and have been out of work longer than the insurance benefits will allow. We have 15 million people looking for work, and we are told there are about 3.1 million jobs available. That means there are five people looking for every one job opening. This is not a situation of people not wanting to work. In the State of Michigan, we know how to work. We work hard. We make things. We grow things. We work hard. Yet through no fault of their own, people find themselves in a situation where we have seen an economic tsunami go through our country, lasting in Michigan longer than any other place across the country. And even as we climb our way out--and it is getting better; we have turned the corner; the economic recovery provisions we have put in place we

know are beginning to make a difference--we still are in a situation, even as we are moving and turning the corner, where there are five people out of work for every one job opening. That is real life for too many people I represent.

We have had legislation in front of us. We have been spending weeks now on a jobs bill, a bill to create jobs, to invest in innovation, to help small businesses, to help manufacturers get the capital they need, but to also, in that bill, help people who don't have a job while they are waiting for all this to take effect, for all of this to work, people who have lost their jobs through no fault of their own, who find themselves in a situation where they are desperate and depending on us to understand what is happening to too many working families, middle- class families, people who never in their wildest dreams thought they would find themselves in this situation but here they are. They want to know that we get it, that we understand what is happening in their lives and that we are not going to play politics or use people who are out of work somehow as pawns in a political chess game that is going on here in the Senate.

The normal unemployment insurance benefits only last for 26 weeks, but thanks to the recovery act, we have been able to bridge the gap for millions of Americans by extending it. That is very important. But we are at a point now where the recovery has not fully been actualized. People are still in a situation where they need to have help on a temporary basis while they are looking for work.

Since this recession started in 2007, there are now 8 million fewer jobs in America, too many of those in manufacturing. I could spend hours talking about fair trade and what we need to do to make sure markets are open abroad for our products to be sold so we are exporting our products, not our jobs, and how we can have a fair trade policy. I am pleased that in the recovery act we have focused on making things again in America, battery manufacturing facilities and the advanced manufacturing tax credit, both of which I was pleased to be a part of leading to create jobs.

We are creating jobs. But it takes time to turn this around. We find ourselves in a situation where nearly 1 million people who have lost their jobs are going to lose their unemployment benefits because of what has been going on here. They don't have time to wait and hold their breath as we continue to work to turn this economy around. These are families trying to make ends meet. They are applying for jobs every day. They are putting in applications. I get e-mail after e-mail--and I will share some this evening--from people who are trying to find work, putting in applications, going back to school. We have all said to them: Maybe you need to go back to school. They have gone back to school to get retraining, but they have to keep a roof over their heads while they are doing that. They have to keep food on the table, keep the electricity on for their families while they are doing that. That is what unemployment benefits allow them to do.

The last time Congress cut off emergency unemployment insurance benefits was after the terrible recession in 1985, when the employment rate was 7.3 percent. Today, 33 States and the District of Columbia now have unemployment that is higher than 7.3 percent. These are red States, blue States, Republicans who are out of work, Democrats who are out of work. It doesn't matter what party one is; if they lose their job, it is an emergency for the family. They expect the Senate to understand that and to act. In 16 of those States, unemployment is still higher than 10 percent. Many States haven't seen this many people out of work since the Great Depression.

When we look at the States where there are more than 1 in 10 people who have lost jobs through no fault of their own, we see a picture that is, in fact, America. I know one of those great States is the State of my colleague who is from Rhode Island. He has come to the floor on numerous occasions to speak about the people of Rhode Island, just as I have come on numerous occasions to speak about the people in the great State of Michigan. I am pleased the Senator from Rhode Island is here.

I yield the Senator up to 10 minutes to speak at this time.

Mr. President, I thank Senator Whitehouse very much for his passion, his leadership.

Just to emphasize what the Senator was talking about on the floor in terms of where we have come from, I remember being in the House of Representatives in 1997, I believe, when we voted to balance the budget for the first time in 30 years under President Clinton. It was tough. We had to make tough decisions, but we did that, and we were on a trajectory so that by the year 2000--when I was elected to the Senate in 2001 and came into the Budget Committee--the big debate was what to do with the biggest surplus in the history of the country. We saw that big surplus, during the 8 years of President Bush, go red with red ink, down, down, down, down, so much so that when President Obama came in, the job loss was at about 750,000 jobs a month. We were losing 750,000 jobs a month. So we went to work and we focused on people in the middle class, on innovation and investing in businesses and creating opportunities and so on, and these numbers now, on jobs per month, have gone from a negative now up to a positive.

The challenge is--we are not done yet--do not stop what we have been doing. This jobs bill on the floor is to get us to a point where those numbers keep going up and up and up, so everybody who wants to work can work. We have turned this around in terms of job loss. The numbers are going up. But it is not enough. We are not there yet, and too many people are caught in the middle. In fact, even though the numbers are better and we are moving in the right direction, we still have five people out of work for every one job opening.

In a moment, I am going to ask for unanimous consent. I will let my colleagues on the other side of the aisle know that I will do that in about 5 minutes, to give them a heads-up. But in the meantime, I want to read a few letters and then turn things over to another colleague from Oregon who cares passionately about this.

I want to share with you what have been literally thousands of e- mails and phone calls we have been getting from people in Michigan. I go home every weekend, and I am constantly talking to people who find themselves in very tough situations--people who have never been out of a job before in their lives, never, and now they are in their fifties and trying to figure out what they are going to do, and they find themselves in a situation where they are having to depend upon unemployment benefits, which is the last thing they have ever wanted.

Judith from Taylor:

Both my husband and I have been unemployed for over a year

now. We have been trying desperately to find work and haven't

even gotten call backs for jobs we have applied for. It has

been frightening and discouraging but we keep trying.

Because of our situation, we have been forced to sell our

home and we will be closing this month, at a considerable

loss!

That is the other piece of this. It is not just about a job. The next thing is you lose your house, and then the ripple effect goes from there.

The bank we have our equity with has refused to settle and

has told us they reserve the right to come after us for the

balance. We will be having to break into our retirement funds

again with penalty. On top of all this, our youngest son,

Nathaniel, is a combat medic with the 101st Airborne and

will be one of the 30,000 that are being deployed to

Afghanistan. Needless to say, my husband and I are on

overload!! Please help the unemployed workers in Michigan

by extending the emergency funds. PLEASE don't leave so

many people literally out in the cold.

That is what is happening. That is what is happening right now by these efforts to block, to say no. We have come to the floor multiple times on individual bills to extend unemployment, plus the two times now we have voted to stop filibusters on the jobs bill. All we get from the other side is no, no, no. As my friend from Rhode Island said, when we get to the estate tax, it will be yes, yes, yes. And it will not matter where the funds come from, if they add to the deficit--oh, no, not for the few hundred people in our country who are the wealthiest.

When somebody is out of work, that is something different. When somebody is out of work, we have a set of rules that say: No, this is not an emergency. We have always said it is an emergency, with emergency funding. This is not an emergency? Well, I tell you what, when 15 million people are out of work, I would consider that an emergency. That is as much of an emergency as a flood, a hurricane, anything else we have seen in this country. Tens of millions of people out of work is an economic emergency and deserves emergency status here in this body.

Let me share one other story before asking unanimous consent. Michele from Suttons Bay:

I am a 50-year-old journeyman carpentry foreman who was

laid off by a small construction company in December 2008

after 10-plus years with them. I have been looking for a

full-time job ever since. I went through the state's

retraining program last summer and am now a BPI certified

energy efficiency auditor. But I can't afford to buy the

equipment to start my own business. And no companies are

hiring energy efficiency auditors right now. I have been

looking for any kind of work that allows us to pay the

mortgage and our other very basic bills.

My wife has a full-time job in retail. We have two sons--

one is 16, and the other is 12. We have been surviving with

the aid of my unemployment [insurance]. I have already gone

through the state unemployment benefits, and I am now in the

second period of [the] federal . . . program.

Please don't forget about us.

Well, that is what this is about this evening. That is what the legislation is about that we are focused on. That is what all of our efforts are focused on--jobs, creating good-paying jobs, partnering with business, manufacturers, small businesses, creating the atmosphere for private sector jobs, and remembering the people who, through no fault of their own, cannot find work today.

Unanimous Consent Request--S. 3520

So, Mr. President, on behalf of the close to 1 million people right now who have lost their jobs and are now losing their unemployment benefits, I ask unanimous consent that the Senate proceed to the immediate consideration of S. 3520, the Unemployment Extension Act of 2010; that the bill be read a third time and passed, and the motion to reconsider be laid upon the table with no intervening action or debate; and that any statements relating to the bill be printed in the Record.

Mr. President, before I yield to my friend from Oregon, let me say the question before us is whether we take dollars from a jobs bill, from a Recovery Act, where we are creating jobs right now, which is what has been proposed over and over--that we basically take it out of one pocket and put it in the other. We want to make sure we are creating jobs and allowing the recovery--or what has been called the stimulus--to be able to work to do that, and it is beginning to do that. So taking dollars out of that pocket, which is what has been proposed by the other side of the aisle in order to be able to address unemployment benefits, doesn't make sense.

I would state one more time: We have always viewed the extension of unemployment benefits in times of economic hardship to be an emergency, just like any other emergency in this country. Our colleagues on the other side of the aisle are refusing to acknowledge that this is an emergency. It is an emergency. When over 15 million people are out of work, it is an emergency, and we should do as we have done under every Republican and every Democratic President. We have called it an emergency. We should continue to call it an emergency, and we should allow those benefits to continue.

I now yield 5 minutes to my colleague from Oregon.

Mr. President, I wish to again thank my friend from Oregon who consistently has come to the Senate floor to fight for jobs and to fight for people who are looking for work. I thank him very much for sharing those stories.

I now wish to turn to Senator Bernie Sanders who has been another champion in this fight.

Mr. President, I thank my friend from Vermont for his passion. I now yield 5 minutes to the distinguished Senator from Rhode Island, Mr. Reed, who is a true leader on this issue. He has been coming to the floor and standing up for working men and women. It is a pleasure always to work with him on this issue.

Mr. President, I yield 5 minutes to the senior Senator from New York, and I thank him for his passionate leadership on behalf of our country.

Mr. President, I thank my friend from New York for those very stirring words about the families he talked with. I think all of us can relate to that, as he was talking about someone from New York each day going to a different city and State to look for work.

I go back home every weekend. I go home Fridays and come back on Mondays. I am very frequently now on a plane with somebody who is coming to work in DC--or to look for work--from Michigan. Every week they are going back and forth. People are willing to get on planes to find jobs and to work. People are getting on planes now from Michigan and going across the country. I have talked to people who go from one end of the country to another on an airplane because they want to work. People want to work.

The idea that somehow we should treat this economic recession differently than any other recession in the history of our country-- different than any other Republican President or any other Democratic President, any other Republican Congress or any other Democratic Congress, by somehow saying we are not going to categorize it as an emergency--which it is--to make that change, which is what we are talking about here on our side with our colleagues--to make that change, to allow that to happen would be to say to these individuals that we do not understand what is happening in their lives.

I want to take the final couple of moments of my time, before yielding to colleagues, to read a couple more letters. One is from Susan from Grand Rapids, who writes:

My husband has been out of work since September of 2009.

His benefits will expire

soon. He has worked all his life, since he was 13 and he had

a paper route. He is a veteran. We are 60 years old now. He

applies for jobs every [single] day. He has a Bachelor of

Science Degree and has worked for the past 20 years in the

construction industry. He has had one interview. One. Out of

hundreds of jobs he has applied for, not just in Michigan but

all over the [country]. Please help us by extending the

Federal unemployment benefit. I am frightened that we will

lose our house. Sixty year old people should not have to be

frightened of becoming homeless [in this country]. This is

something you can do right now for hundreds of thousands of

desperate people. Not a fix for future but helping the people

that are struggling right now.

That is what this is about. Tonight, we can fix this by getting unanimous consent to do what every other White House and Congress has done--to declare that this is an emergency and fund this as an emergency, as we have done year after year after year in this country, given what is happening to millions of people in this country.

We care about the deficit. Some of us have voted to eliminate the deficit, as we voted for balanced budgets and put ourselves into a situation of economic prosperity under the Clinton administration, before it was wiped out in the last administration with deficit spending. But in caring about deficits, it is important to emphasize that we will never get out of deficit with over 15 million people out of work or 20 million or whatever the real number is. We will never get out of deficit with that many people not working and contributing. We will never get out of deficit, which is why we focus on jobs.

We have a jobs bill in front of us. So far not one Republican colleague--not one--has voted with us on this jobs bill to create jobs, to invest to create capital for manufacturers and small businesses, to invest in innovation and, yes, to help those who are currently without a job through no fault of their own. So far not one Republican colleague has been willing to join with us.

We are desperately concerned about the almost 1 million Americans who lost their jobs and now are losing their unemployment benefits. We are simply saying it is time to extend those benefits and to understand what is happening to people all over this country who have worked hard and played by the rules and find themselves in a situation where the world is just tumbling down around them--just tumbling down around them--no matter how hard they are looking and trying to find work.

Claudia from Commerce Township:

I worked hard all my life and this is the first time I have

ever had to accept unemployment benefits to help me get by.

Believe me, I do not want to be in this situation . . . I

would like nothing more than to be working again. I was laid

off in January of 2009 from a company that lost multiple

contracts with the automotive manufacturers and fell on hard

times.

A lot of folks in Michigan are in this story.

I have a great deal of experience in my field of expertise

(Human Resources) and I hold a bachelor's degree. I have been

looking for a job for the past year. At times, I have been

encouraged by success in assessment testing and interviews

I've completed, but I always seem to lose out in the end. I

have taken classes to brush up on my job search skills and

believe I do well with my resume and in interviews. I even

enrolled and paid for a course to assist me in getting an HR

certification to make me more marketable. However, I am 56,

and the fact is that in this economy--

If I may have 30 more seconds to complete the sentence.

She said:

I am 56 . . . and employers are opting for the person with

a master's degree--or frankly, someone younger . . . I am a

hard worker, intelligent, efficient, trustworthy, honest,

dependable and upbeat.

Mr. President, these are the folks we are talking about and for whom we are fighting this evening.

I yield the floor.

Reserving the right to object.

I certainly understand the concern about this particular program. This is something I support, and it is, in fact, in the broader jobs bill we have. Hopefully, within the next 2 days, we will get another vote to complete this along with unemployment benefits.

Given the fact that we are still in a situation where we have almost 1 million people whose unemployment benefits are running out and that is not included in this request, I have to object.

Reserving the right to object, Mr. President, my colleague's proposal takes money out of job creation to pay for helping people who are out of work. One of the provisions in his proposal would take $37.5 billion away from creating jobs in order to create help for the unemployed and then create more people who are unemployed. So I regret to say I will have to object to this request.

Mr. President, reserving the right to object, I first commend my friend from Utah for speaking about small business. This is something that we share a very strong passion regarding. In fact, we are operating right now under some small business reforms that have already been passed this year and a 5-year net loss operating carryback--not the 10 years my friend has talked about, but we have begun that with 5 years.

The section 179 expensing was passed in the jobs bill, which is very important. I am hopeful we will be able to join together on a bipartisan basis when our leaders bring to the floor a small business bill that will exempt capital gains for small business, increase the availability of loans, and that we might work together on the other provisions that my friend has suggested from his bill.

At this point, I will object but look forward to working with him on these very important measures.

Mr. President, we got some numbers this morning. Unemployment seems stuck at 9.7 percent nationally. We lost more jobs. In my home State of Utah, unemployment is at a 23-year high at 6.8 percent. I know there are States represented by Senators here that would love to have 6.8 percent as their unemployment rate, but we in Utah do not like it.

I want to talk about one aspect of the unemployment rate that I think has been ignored in the debate we have had around the country. The President says we are out of the woods, not far out of the woods, to be sure, but that we have turned around, that the recession has started to fade, and we are starting to come back. He looks at macronumbers and makes that statement with respect to GDP and all of the rest of that. He is missing a very important fact I want to highlight here today in the introduction of this bill.

The economy is driven by a variety of forces. But the one thing we do know about economic activity is that jobs are created primarily by small businesses. When I say small, I mean really small. Over 7 million jobs have been lost since the beginning of the recession. We must ask, How many of those have been lost in small businesses? The answer is, over half of that number. Over 3.5 million of the jobs that have been lost have been lost in small businesses.

We hear and look at the reports that are in the newspaper about big companies that have had layoffs and big companies that have stopped hiring. But it is the small businesses in the United States that have been the engine of economic growth and the engine of hiring all the way through.

I have talked before about my own experiences as a small businessman, and I will revisit that here for a moment to put this in context.

I have been involved in the creation of a number of businesses. Most of them have failed. That is the norm for small businesses. People get an idea. People get excited. They get caught up in the idea of having their own business. They start their own business, and they find it is much harder than they thought. They find the challenge is much more difficult than they thought or they simply run into challenges that are beyond their control and they end up failing.

It is all summarized in a comment made by a woman who attended a meeting of Inc. magazine. Inc. magazine every year chooses the ``Entrepreneur of the Year'' across the country in the various States. I was honored enough to be chosen as the ``Entrepreneur of the Year'' when I was CEO of a business in Utah, and as a reward for that we went to this convention down in Miami Beach. A panel was being held of small businesspeople.

Just prior to the panel, they announced that after the panel was over there would be a wine and cheese tasting event to be held on the patio of this hotel. Then they turned to the panel, and one of the women on the panel said: Entrepreneurs do not drink wine. Entrepreneurs drink vodka, neat. We can't do with this gracious living stuff. We are caught up in the tremendous pressure of trying to keep our businesses open.

I do not drink wine or vodka, but I identified with her comments and her sentiments about how tough it is.

Well, the President may think the GDP numbers show we have turned the corner. The people in small business recognize that in their part of this economy, we have not. Let me quote from an article in the Wall Street Journal regarding the National Federation of Independent Business' small business optimism survey. It was in December of last year, and author noted:

Small-business owners grew even more pessimistic in the

final month of 2009, capping off what was a trying year for

their businesses. . . .

Regular borrowers--those accessing capital markets at least

once a quarter--also continued to report difficulties in

arranging credit at the highest frequency since 1983,

according to the report.

Mr. President, 1983, for those of us who remember, was the depth of the recession that followed the great inflation of the Jimmy Carter years, as President Reagan and the Congress were dealing with the dreaded double dip. We came out of the Jimmy Carter years with a recession, a recovery, and then another recession--the dreaded double dip or the ``W-shaped'' recession. Mr. President, 1983 was a very challenging year. I was running a small business at that time as well and I remember it very well. All right--the worst attitude with respect to their opportunities in small business since 1983, according to people who were on the firing line in small business.

So what do we need to try to help small business recover and start creating jobs again? Again, the point I made earlier: More than half of the jobs that are created in America are created with small business, and these are small businesses that are doing less than $5 million a year. As I say, I have been involved in creating many of these businesses. Many of them failed. Fortunately, the small businesses I was involved in creating that did not fail earned enough money to repay me for all that I lost in the ones that did and created enough jobs to overcome the loss of jobs in the ones that failed, and the small business we created for which I won the award at Inc. magazine ultimately went to the New York Stock Exchange and employed 4,000 people. Not bad for a small business that started in somebody's basement with originally four full-time employees. I was No. 5 in that business.

So I have seen it happen on both sides--the failure side and the success side--and I know what it takes. I can tell you, the kinds of things the President is talking about and we have been doing here in this Chamber are not the things small business needs to survive. Let me talk about some of those, and they are in the bill I am offering today.

One of the first things we have to recognize is that the worst thing that can happen to a small business financially is to earn a profit. You say: Now wait a minute, obviously you want to earn a profit. Yes, you want to earn a profit. But the worst thing that can happen to you is--as you are struggling on a cashflow basis to keep this business going and you cross the line into profits--the government shows up and says: We want half your profit immediately, and we want it in cash.

You want your profit invested in inventory. You want your profit invested in accounts receivable. You want your profit invested in the capital investments that will allow your business to survive, and the government says: No. You have earned a profit and we want it in taxes and we want it in cash, and we won't take a percentage of your inventory and hold it to let you make the business grow. You have to liquidate that inventory to pay your taxes in cash.

So the first thing that is in my bill will provide a 10-year net operating loss carryback provision for qualifying businesses whose average gross revenue per year is $5 million or less.

You struggle with the business; you lose money the first year. You struggle with the business; you lose money the second year. You struggle with the business; you lose money the third year. But you keep it afloat, and in the fourth year, you start to earn money. And there is the government saying: We want our share of your profits, and we don't care that you have been losing money while you have been building this business--you have been losing money on an accrual basis while you have been borrowing from your brother-in-law and your credit card and your bank, and whoever would give you money to cover those losses, and now you are finally at the point where you are making a little profit-- we won't give you any consideration for all of those losses you have put into building this business. We are going to take our tax bite out of this year's profits, and that can be enough to sink the business.

So this has a net operating loss carryback provision for qualifying businesses whose average gross revenues are $5 million or less.

This is not a break for American Airlines. This is not a break for General Motors. This is a break for the person who is trying to duplicate the success I was lucky enough to be involved in--where we start something in a basement or a garage and see it grow to the point where it can go to the New York Stock Exchange.

You could say: Well, Senator Bennett, you didn't need this net loss carryback provision when you did that business. That is true because we grew that business in what the New York Times and other publications called the decade of greed. It was the years of Ronald Reagan when the top marginal tax rate was 28 percent, which meant even paying taxes, we got to keep 72 cents out of every dollar we generated in profit. That was enough to allow us to fund the growth of that business. Today, the top marginal tax rate is over 40 percent. There is a great deal of difference. If we had had to try to grow that business in today's tax environment--and it went up to that level when Bill Clinton became President--we probably would not have been able to grow the business and we would not have created those jobs and we would not have been able to ultimately build a company big enough to go to the New York Stock Exchange.

All right. I can't deal with the marginal tax rate. We don't have enough votes to do that. If I could, I would like to get it back to the 28 percent it was with Ronald Reagan. If we are going to have the tax rate where it is, we need at least some kind of relief for small business. The 10-year net operating loss carryback provision is a way to give them some kind of relief in this time of great economic stress.

No. 2--and this gets a little technical--I want to expand the definition of section 179 expensing to include structural changes to the physical property and make the current $250,000 deduction limit permanent.

When you are making an investment in your business of a capital good that you need, whether it is a lathe in a machine shop or whether it is a warehouse and something that requires you to stockpile with material before you send it out to retailers, whatever it might be, you don't want to have to start paying taxes on the money you put into that capital good. You need the deduction for expensing that right now. That is another way to hold your taxes down.

This second provision is tied to the first. The first gives you the net operating loss carryback provision. This one says you can expense in a much better fashion the money you are putting in up front for your structural activity.

Then, No. 3: It sounds very minor, but to a business of the size we are talking about it can be significant. I want to increase the current startup cost deduction from $5,000 to $20,000. This will encourage entrepreneurs to invest right now rather than wait for the economy to improve.

These are the three primary things that will be in the bill I am sending to the desk and introducing today.

I wish to conclude with these comments. As I move around my State, and as I move around the country talking about the state of business-- back to the reference to the NFIB and their survey about optimism or pessimism among small business owners. I have

never seen a time of more pessimism than we have now. Even back in the 1980s when I described the businesses that I was involved in then and the dreaded ``double dip,'' businessmen were not as pessimistic as they are now. They still had hope we could come out of this. Now, even while the national GDP numbers are looking good to the people at the White House, to the people on Main Street it doesn't look so good.

This is what I hear: The venture capitalists tell me we are not making venture capitalist investments anymore. Why? Because the venture capitalist is there to capitalize and to finance the startup, and then the system is supposed to take over and finance the growth. We pick the entrepreneur who has the widget or the gadget, whatever it might be that is going to change the world.

We say: Yes, your widget is marvelous, and we are going to fund that so you can get that going. But once you get it going, the system takes over. The banks give you the tools you need for your capital investment. Other investors come in who are not taking as big a risk as we are because they see now that your widget really does work. So the level of risk is lower, the system takes over, and we can take our venture capital and go out and look for the other entrepreneur who has a new invention. That is how the whole thing works.

They tell me: We discover now the system doesn't take over. We discover now the money we have put into the widget, the entrepreneur, the inventor, isn't followed on by additional funding. If this investment we have put in is going to survive, we have to double down our bets.

Instead of our venture capital now going to the inventor and the entrepreneur, our venture capital is going to places where it has never been required before. As a result, we don't have any left over for the true venture capital, and the whole system is shutting down in terms of job creation. We are getting to a circumstance where new jobs are not coming as a result of venture capital activity. This job creation I talked about and these small businesses are being stifled. That is the first part of the pessimism.

The second part of the pessimism, of course, is that the stimulus money we have put into the system isn't getting down to small businesses at all. I received a letter from a small businessman in Utah. I identify with him because he has created a business of the same kind I have tried to create over my career before I came here.

He says: I am writing because I am frustrated. I own a small business here in Utah--he names it. We employed 20 people.

In the macro of the world, 20 people aren't very much, not enough to really worry about; except this fellow and his 20 people are representative of more than half of the job creation that is going on in this country historically.

He says:

I have a small business here in Utah that employs 20

people. Now I am down to 4 people as I can't get financing. I

put close to $2 million in technology development.

There is the venture capitalist side of it.

We are ready to launch our new system and services, but

have run out of funds and can't find investor groups that

would be willing to take a risk on technology at a relatively

new company. Why can't some of the stimulus money come to us?

I would hire 25 to 30 new people if I could receive funding

that I need to launch my product and services. Banks won't

lend, individuals are holding on to cash, VC groups are

looking for companies that have been around a few more years.

I don't want to violate SEC rules. Raising funds is

difficult.

I don't have a solution to everything he is saying, but I do believe the kinds of reforms that are in the bill I am introducing will create a better environment for small business and make it easier for him and others like him to go to investors and say: Look, if you put some money into our business, we would not have to pay taxes as soon as it turns the corner because we will have this net operating carryback for 10 years. We can expense some of the capital investments we make so we would not have to worry about paying taxes on it, and we have a current startup tax deduction that has gone to $20,000.

These are very modest kinds of proposals, but they are the kinds of proposals that are rooted in real experience in Main Street rather than Wall Street; from real people who are creating jobs, have created jobs, who are hurting the most in this economy, and upon whom we depend primarily for the new job creation.

As I said at the outset, we have bad numbers today. Unemployment has not come down in the Nation. More jobs have been lost. In my home State of Utah, we have hit a 23-year high in unemployment. We must look to where the jobs come from, and the answer to that is small business, and we must do everything we can to try to help small business get started and get going and get growing, and that is a way we will get out of this recession.

I will be happy to yield.

I thank the Senator from Alabama for his kind words. My own impression is that the stimulus package has created a few jobs with a very marginal kind of effect. Most of the money, it seems to me, has been spent in efforts aimed at research, which may or may not produce jobs 3 years, 4 years, 8 years, 10 years from now.

As a member of the Appropriations Committee we held a hearing just yesterday with the Department of Energy and looked at the amount of stimulus money that was going into fund research in the Department of Energy and pointed out to the Secretary of Energy that only 7 percent of the stimulus money had been spent. To get ready for the energy research they were going to do, they had to hire new people. It, perhaps, has created some government jobs to get ready to examine all of the grants and look at all of the proposals and so on. I am not opposed to research, but this is not an immediate creation of jobs in the middle of a recession to be spending stimulus money in this fashion.

I have also come to the conclusion that the jobs that have been created or saved, as this administration tries to add that word to it, have primarily been government jobs.

I don't object to people working for the government. We have many civil servants who provide great value added in the work they do for the government. But the long-term projection of jobs that will add to the economy create new jobs and create new wealth. I do not see that the stimulus has produced any significant difference in that arena.

I would say to the Senator that is the whole purpose of this. Let entrepreneurs who are taking the risks--drinking vodka neat, if you will--have the opportunity to create their businesses without the government showing up immediately and saying: By the tax law, we are going to punish you for getting your initial beginnings of success. Instead, we are going to delay the impact of the taxes on you until you have a sound financial footing under you. When you have that

financial footing under you, you can afford to pay the taxes and, more important, you can afford to hire more people who, as a result of their jobs, will also pay taxes.

We must understand a very large reason we are having this deficit is not just the spending, as important as that is; it is the drop in revenue, and the drop in revenue comes because the economy is so bad. We must understand around here that revenue does not come from the budget.

Revenue comes from the economy. We can budget any kind of revenue number we want, but if there are no profits and there are no jobs, that means there is no income, and the income tax, by definition, is dependent on income before it produces any revenue. We will not have the money we need to run the government because the economy will not be producing that revenue.

I learned in business you cannot cost-cut your way to profitability. Cost-cutting is important in a business, and you should make sure you are not doing stupid things--and there are businesses that can spend themselves into bankruptcy--but you cannot cost-cut your way into profitability. The top line, the sales, the growth of the company is what creates profitability.

The same principle applies to this economy. Yes, we must cut costs, we must cut spending in the Congress, but the way for a vital country is to grow the economy, and the biggest engine of growth in the economy has been and remains small business.

Mr. President, we got some numbers this morning. Unemployment seems stuck at 9.7 percent nationally. We lost more jobs. In my home State of Utah, unemployment is at a 23-year high at 6.8 percent. I know there are States represented by Senators here that would love to have 6.8 percent as their unemployment rate, but we in Utah do not like it.

I want to talk about one aspect of the unemployment rate that I think has been ignored in the debate we have had around the country. The President says we are out of the woods, not far out of the woods, to be sure, but that we have turned around, that the recession has started to fade, and we are starting to come back. He looks at macronumbers and makes that statement with respect to GDP and all of the rest of that. He is missing a very important fact I want to highlight here today in the introduction of this bill.

The economy is driven by a variety of forces. But the one thing we do know about economic activity is that jobs are created primarily by small businesses. When I say small, I mean really small. Over 7 million jobs have been lost since the beginning of the recession. We must ask, How many of those have been lost in small businesses? The answer is, over half of that number. Over 3.5 million of the jobs that have been lost have been lost in small businesses.

We hear and look at the reports that are in the newspaper about big companies that have had layoffs and big companies that have stopped hiring. But it is the small businesses in the United States that have been the engine of economic growth and the engine of hiring all the way through.

I have talked before about my own experiences as a small businessman, and I will revisit that here for a moment to put this in context.

I have been involved in the creation of a number of businesses. Most of them have failed. That is the norm for small businesses. People get an idea. People get excited. They get caught up in the idea of having their own business. They start their own business, and they find it is much harder than they thought. They find the challenge is much more difficult than they thought or they simply run into challenges that are beyond their control and they end up failing.

It is all summarized in a comment made by a woman who attended a meeting of Inc. magazine. Inc. magazine every year chooses the ``Entrepreneur of the Year'' across the country in the various States. I was honored enough to be chosen as the ``Entrepreneur of the Year'' when I was CEO of a business in Utah, and as a reward for that we went to this convention down in Miami Beach. A panel was being held of small businesspeople.

Just prior to the panel, they announced that after the panel was over there would be a wine and cheese tasting event to be held on the patio of this hotel. Then they turned to the panel, and one of the women on the panel said: Entrepreneurs do not drink wine. Entrepreneurs drink vodka, neat. We can't do with this gracious living stuff. We are caught up in the tremendous pressure of trying to keep our businesses open.

I do not drink wine or vodka, but I identified with her comments and her sentiments about how tough it is.

Well, the President may think the GDP numbers show we have turned the corner. The people in small business recognize that in their part of this economy, we have not. Let me quote from an article in the Wall Street Journal regarding the National Federation of Independent Business' small business optimism survey. It was in December of last year, and author noted:

Small-business owners grew even more pessimistic in the

final month of 2009, capping off what was a trying year for

their businesses. . . .

Regular borrowers--those accessing capital markets at least

once a quarter--also continued to report difficulties in

arranging credit at the highest frequency since 1983,

according to the report.

Mr. President, 1983, for those of us who remember, was the depth of the recession that followed the great inflation of the Jimmy Carter years, as President Reagan and the Congress were dealing with the dreaded double dip. We came out of the Jimmy Carter years with a recession, a recovery, and then another recession--the dreaded double dip or the ``W-shaped'' recession. Mr. President, 1983 was a very challenging year. I was running a small business at that time as well and I remember it very well. All right--the worst attitude with respect to their opportunities in small business since 1983, according to people who were on the firing line in small business.

So what do we need to try to help small business recover and start creating jobs again? Again, the point I made earlier: More than half of the jobs that are created in America are created with small business, and these are small businesses that are doing less than $5 million a year. As I say, I have been involved in creating many of these businesses. Many of them failed. Fortunately, the small businesses I was involved in creating that did not fail earned enough money to repay me for all that I lost in the ones that did and created enough jobs to overcome the loss of jobs in the ones that failed, and the small business we created for which I won the award at Inc. magazine ultimately went to the New York Stock Exchange and employed 4,000 people. Not bad for a small business that started in somebody's basement with originally four full-time employees. I was No. 5 in that business.

So I have seen it happen on both sides--the failure side and the success side--and I know what it takes. I can tell you, the kinds of things the President is talking about and we have been doing here in this Chamber are not the things small business needs to survive. Let me talk about some of those, and they are in the bill I am offering today.

One of the first things we have to recognize is that the worst thing that can happen to a small business financially is to earn a profit. You say: Now wait a minute, obviously you want to earn a profit. Yes, you want to earn a profit. But the worst thing that can happen to you is--as you are struggling on a cashflow basis to keep this business going and you cross the line into profits--the government shows up and says: We want half your profit immediately, and we want it in cash.

You want your profit invested in inventory. You want your profit invested in accounts receivable. You want your profit invested in the capital investments that will allow your business to survive, and the government says: No. You have earned a profit and we want it in taxes and we want it in cash, and we won't take a percentage of your inventory and hold it to let you make the business grow. You have to liquidate that inventory to pay your taxes in cash.

So the first thing that is in my bill will provide a 10-year net operating loss carryback provision for qualifying businesses whose average gross revenue per year is $5 million or less.

You struggle with the business; you lose money the first year. You struggle with the business; you lose money the second year. You struggle with the business; you lose money the third year. But you keep it afloat, and in the fourth year, you start to earn money. And there is the government saying: We want our share of your profits, and we don't care that you have been losing money while you have been building this business--you have been losing money on an accrual basis while you have been borrowing from your brother-in-law and your credit card and your bank, and whoever would give you money to cover those losses, and now you are finally at the point where you are making a little profit-- we won't give you any consideration for all of those losses you have put into building this business. We are going to take our tax bite out of this year's profits, and that can be enough to sink the business.

So this has a net operating loss carryback provision for qualifying businesses whose average gross revenues are $5 million or less.

This is not a break for American Airlines. This is not a break for General Motors. This is a break for the person who is trying to duplicate the success I was lucky enough to be involved in--where we start something in a basement or a garage and see it grow to the point where it can go to the New York Stock Exchange.

You could say: Well, Senator Bennett, you didn't need this net loss carryback provision when you did that business. That is true because we grew that business in what the New York Times and other publications called the decade of greed. It was the years of Ronald Reagan when the top marginal tax rate was 28 percent, which meant even paying taxes, we got to keep 72 cents out of every dollar we generated in profit. That was enough to allow us to fund the growth of that business. Today, the top marginal tax rate is over 40 percent. There is a great deal of difference. If we had had to try to grow that business in today's tax environment--and it went up to that level when Bill Clinton became President--we probably would not have been able to grow the business and we would not have created those jobs and we would not have been able to ultimately build a company big enough to go to the New York Stock Exchange.

All right. I can't deal with the marginal tax rate. We don't have enough votes to do that. If I could, I would like to get it back to the 28 percent it was with Ronald Reagan. If we are going to have the tax rate where it is, we need at least some kind of relief for small business. The 10-year net operating loss carryback provision is a way to give them some kind of relief in this time of great economic stress.

No. 2--and this gets a little technical--I want to expand the definition of section 179 expensing to include structural changes to the physical property and make the current $250,000 deduction limit permanent.

When you are making an investment in your business of a capital good that you need, whether it is a lathe in a machine shop or whether it is a warehouse and something that requires you to stockpile with material before you send it out to retailers, whatever it might be, you don't want to have to start paying taxes on the money you put into that capital good. You need the deduction for expensing that right now. That is another way to hold your taxes down.

This second provision is tied to the first. The first gives you the net operating loss carryback provision. This one says you can expense in a much better fashion the money you are putting in up front for your structural activity.

Then, No. 3: It sounds very minor, but to a business of the size we are talking about it can be significant. I want to increase the current startup cost deduction from $5,000 to $20,000. This will encourage entrepreneurs to invest right now rather than wait for the economy to improve.

These are the three primary things that will be in the bill I am sending to the desk and introducing today.

I wish to conclude with these comments. As I move around my State, and as I move around the country talking about the state of business-- back to the reference to the NFIB and their survey about optimism or pessimism among small business owners. I have

never seen a time of more pessimism than we have now. Even back in the 1980s when I described the businesses that I was involved in then and the dreaded ``double dip,'' businessmen were not as pessimistic as they are now. They still had hope we could come out of this. Now, even while the national GDP numbers are looking good to the people at the White House, to the people on Main Street it doesn't look so good.

This is what I hear: The venture capitalists tell me we are not making venture capitalist investments anymore. Why? Because the venture capitalist is there to capitalize and to finance the startup, and then the system is supposed to take over and finance the growth. We pick the entrepreneur who has the widget or the gadget, whatever it might be that is going to change the world.

We say: Yes, your widget is marvelous, and we are going to fund that so you can get that going. But once you get it going, the system takes over. The banks give you the tools you need for your capital investment. Other investors come in who are not taking as big a risk as we are because they see now that your widget really does work. So the level of risk is lower, the system takes over, and we can take our venture capital and go out and look for the other entrepreneur who has a new invention. That is how the whole thing works.

They tell me: We discover now the system doesn't take over. We discover now the money we have put into the widget, the entrepreneur, the inventor, isn't followed on by additional funding. If this investment we have put in is going to survive, we have to double down our bets.

Instead of our venture capital now going to the inventor and the entrepreneur, our venture capital is going to places where it has never been required before. As a result, we don't have any left over for the true venture capital, and the whole system is shutting down in terms of job creation. We are getting to a circumstance where new jobs are not coming as a result of venture capital activity. This job creation I talked about and these small businesses are being stifled. That is the first part of the pessimism.

The second part of the pessimism, of course, is that the stimulus money we have put into the system isn't getting down to small businesses at all. I received a letter from a small businessman in Utah. I identify with him because he has created a business of the same kind I have tried to create over my career before I came here.

He says: I am writing because I am frustrated. I own a small business here in Utah--he names it. We employed 20 people.

In the macro of the world, 20 people aren't very much, not enough to really worry about; except this fellow and his 20 people are representative of more than half of the job creation that is going on in this country historically.

He says:

I have a small business here in Utah that employs 20

people. Now I am down to 4 people as I can't get financing. I

put close to $2 million in technology development.

There is the venture capitalist side of it.

We are ready to launch our new system and services, but

have run out of funds and can't find investor groups that

would be willing to take a risk on technology at a relatively

new company. Why can't some of the stimulus money come to us?

I would hire 25 to 30 new people if I could receive funding

that I need to launch my product and services. Banks won't

lend, individuals are holding on to cash, VC groups are

looking for companies that have been around a few more years.

I don't want to violate SEC rules. Raising funds is

difficult.

I don't have a solution to everything he is saying, but I do believe the kinds of reforms that are in the bill I am introducing will create a better environment for small business and make it easier for him and others like him to go to investors and say: Look, if you put some money into our business, we would not have to pay taxes as soon as it turns the corner because we will have this net operating carryback for 10 years. We can expense some of the capital investments we make so we would not have to worry about paying taxes on it, and we have a current startup tax deduction that has gone to $20,000.

These are very modest kinds of proposals, but they are the kinds of proposals that are rooted in real experience in Main Street rather than Wall Street; from real people who are creating jobs, have created jobs, who are hurting the most in this economy, and upon whom we depend primarily for the new job creation.

As I said at the outset, we have bad numbers today. Unemployment has not come down in the Nation. More jobs have been lost. In my home State of Utah, we have hit a 23-year high in unemployment. We must look to where the jobs come from, and the answer to that is small business, and we must do everything we can to try to help small business get started and get going and get growing, and that is a way we will get out of this recession.

I will be happy to yield.

I thank the Senator from Alabama for his kind words. My own impression is that the stimulus package has created a few jobs with a very marginal kind of effect. Most of the money, it seems to me, has been spent in efforts aimed at research, which may or may not produce jobs 3 years, 4 years, 8 years, 10 years from now.

As a member of the Appropriations Committee we held a hearing just yesterday with the Department of Energy and looked at the amount of stimulus money that was going into fund research in the Department of Energy and pointed out to the Secretary of Energy that only 7 percent of the stimulus money had been spent. To get ready for the energy research they were going to do, they had to hire new people. It, perhaps, has created some government jobs to get ready to examine all of the grants and look at all of the proposals and so on. I am not opposed to research, but this is not an immediate creation of jobs in the middle of a recession to be spending stimulus money in this fashion.

I have also come to the conclusion that the jobs that have been created or saved, as this administration tries to add that word to it, have primarily been government jobs.

I don't object to people working for the government. We have many civil servants who provide great value added in the work they do for the government. But the long-term projection of jobs that will add to the economy create new jobs and create new wealth. I do not see that the stimulus has produced any significant difference in that arena.

I would say to the Senator that is the whole purpose of this. Let entrepreneurs who are taking the risks--drinking vodka neat, if you will--have the opportunity to create their businesses without the government showing up immediately and saying: By the tax law, we are going to punish you for getting your initial beginnings of success. Instead, we are going to delay the impact of the taxes on you until you have a sound financial footing under you. When you have that

financial footing under you, you can afford to pay the taxes and, more important, you can afford to hire more people who, as a result of their jobs, will also pay taxes.

We must understand a very large reason we are having this deficit is not just the spending, as important as that is; it is the drop in revenue, and the drop in revenue comes because the economy is so bad. We must understand around here that revenue does not come from the budget.

Revenue comes from the economy. We can budget any kind of revenue number we want, but if there are no profits and there are no jobs, that means there is no income, and the income tax, by definition, is dependent on income before it produces any revenue. We will not have the money we need to run the government because the economy will not be producing that revenue.

I learned in business you cannot cost-cut your way to profitability. Cost-cutting is important in a business, and you should make sure you are not doing stupid things--and there are businesses that can spend themselves into bankruptcy--but you cannot cost-cut your way into profitability. The top line, the sales, the growth of the company is what creates profitability.

The same principle applies to this economy. Yes, we must cut costs, we must cut spending in the Congress, but the way for a vital country is to grow the economy, and the biggest engine of growth in the economy has been and remains small business.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I wish to take a few minutes to lay out where we are on this effort to do reform of the financial structures of our economy. It has been a long undertaking and I will not take a lot of time and I will not go into great detail. But I thought it might be helpful for my colleagues and others to get some sense or a feel of how things are progressing. So I wish to share some thoughts on some major issues we are grappling with.

I wish to begin by thanking the 22 other members of the Banking Committee. About one-quarter of the Senate is seated at that table in our Banking Committee hearing room. I wish to thank every member for their work. We have been deeply involved now for well over a year--more than a year; a year and a half--on the issue of how we should shape the regulatory structure of reform. This year we have had somewhere around 80 hearings, listening to a broad range of experts and others who have brought their thoughts and ideas, not to mention the informal meetings that occur outside of the normal hearing process.

It has been a very long undertaking, and worthwhile. We have been trying to examine the causes of this problem that has been so devastating to our country and to others outside of our country--the economic near collapse--and then, from that experience, trying to shape and set up policies that will fill in those gaps that led us to this problem.

Secondly, we are trying to take steps so that we are prepared to deal, as we will at some point in the future have to, with another economic crisis as it comes along, and to have what I call an architecture or a structure that will allow our system to be able to respond far more prudently than it was able to during the last couple of years.

I should add as well a third goal, and that is to create a structure to not only grapple with the crisis, but also be a source of innovation and creativity for wealth creation and job creation that our financial services sector had a reputation of accomplishing, or at least helping to accomplish over the years. Those are not inconsistent goals. It is a challenge to balance them. It is never perfectly right. But our responsibility--both as legislators in this Chamber and the other body, as well as the role of regulators and, obviously, those in the private sector and public sector--is to try and strike that balance between protecting the public and consumers who use financial services, as well as to be able to provide a level of confidence to those who use them, that the system is going to be safe.

It doesn't mean you are going to get a guaranteed return when you buy a stock, but you ought to feel confident when you deposit your paycheck that the institution is going to be there, or you are going to be protected from losing those resources.

So I wish to take a few minutes and share some thoughts on where we are. I will quickly add, as well, I wish to pay particular thanks to the members of the committee. As many people are aware, Senator Shelby and I, my ranking member, have worked closely together over the last 3 years that I have been chairman of this committee on a wide range of issues, and I am grateful to him for his efforts. He is, obviously, significantly involved in this debate. I wish to thank Bob Corker, the Senator from Tennessee. He is a new Member of this Chamber, but has performed, I think, a tremendous task of trying to sit down and work out the differences, and they are complex and they are difficult. Nonetheless, he has rolled up his sleeves and demonstrated a level of maturity and interest far beyond the years of his service. All of us-- and I, certainly--wish to thank him publicly as well for his efforts, and that of his staff, trying to help us get there.

Other members of the committee, including Jack Reed of Rhode Island, Chuck Schumer, Mark Warner, have taken on particular heavy lifts, and I will talk about them in a minute as I discuss what is going on, along with Judd Gregg of New Hampshire and Mike Crapo of Idaho. So there have been a lot of people involved in this as we go forward. I would be remiss if I didn't acknowledge their hard work and that of their staffs over these many months.

We are still not there yet. I am not here to announce an agreement or to tell my colleagues we have reached a consensus. We are trying to get there, but we are not there yet. We are making an effort to see if we can't develop a set of proposals that will enjoy broad support in this institution as we go forward.

So we have all seen, of course, the devastating consequences. I hardly need to spend much time enumerating them here. People are living them every day, and they don't necessarily need to hear them outlined. However, I will just share again what all of us are painfully aware of.

Mr. President, 8.4 million jobs have been lost since December of 2007. The unemployment rate is currently at 9.7 percent. It has been obviously far too high. I think all of us know, as the Presiding Officer does, that there are pockets in our country where that 9.7 is maybe half the unemployment rate in certain areas of rural America and urban America. An astonishing 6.1 million Americans have been without a job for half a year or more in our Nation. Millions of our fellow citizens who did nothing wrong have nonetheless lost homes, their retirement security, their jobs, their health care. Small businesses have been unable to access credit and have been forced to lay off workers, reduce production, or even have

had to shut their doors. Working class families in our country have seen their wealth decline significantly, and, worst of all, today we remain entirely vulnerable to yet another crisis.

We haven't finished this work, and if something were to happen again tomorrow, as much as we have been working on this issue, we haven't passed the necessary legislation to minimize a crisis bringing us close to the brink of financial collapse as the one we are presently in did.

So, obviously, the status quo--I am getting kind of tired of using those words; business as usual, whatever words you want to use to describe it--cannot persist. Congress, in my view, must pass comprehensive, meaningful reform of our financial system. My hope and intention is to do everything I can in the waning days of my service after 30 years here to achieve that goal.

We have to correct the failures that allowed us to get into this mess, but we must also develop a regulatory system that is prepared for the next one, and one that is going to invite, as well, the kind of creativity and innovation that allow for job creation and wealth creation that our system has in the past provided.

Over a year ago, the Banking Committee, as I pointed out earlier, set out to investigate the causes of financial crises and the vulnerabilities that lie in our financial regulatory structure. Over the last year or more, we have held literally dozens and dozens of gatherings, hearings, informal and formal meetings. We have listened to hundreds of experts in a wide variety of fields who have been either affected by, or who have offered some ideas as to how we can create this architecture about which I have spoken. We have examined and reexamined all sets of proposals sent to us by the White House, the Treasury, the Federal Reserve, the FDIC, and others.

In November of last year, I offered my colleagues a discussion draft of where I was. I didn't suggest it had cosponsors or backers, but I thought people ought to know where the chairman of the committee was, so I laid out a broad proposal in these areas. It certainly produced a discussion, I can tell my colleagues. Not always a welcome one from certain corners, but I thought people ought to know at least where I stood on these issues. If I were going to write this alone and I didn't want anyone else to offer their ideas and suggestions, I had some pretty strong and sound ideas as to where we ought to be. I then asked my fellow committee members, Democrats and Republicans, to work on major parts of the bill. It is so complex and so big and broad, the subject matter, that I didn't think any one member, even a chairman and a ranking member, could necessarily put their arms around all of it. So I asked various members who expressed an interest in various subject matters if they would take on the responsibility, a Democrat and a Republican working together, to see if they could come up with some ideas that would be sound, intelligent reforms of the financial system.

It has been an enormous task. As I said a moment ago, these are incredibly complex issues, but with the good work done by so many on the committee, I believe we are well on our way to producing a very strong bill. The problems with our economy run system-wide, and while there is the temptation by some to address only one or two issues and claim victory and call it a day, we are working in our committee on a bill that will attack these problems and vulnerabilities in a rather comprehensive way, one that we believe will make a difference.

The bill as we fashion it is designed to achieve four major accomplishments: No. 1--and the first priority, I would argue, if I had to prioritize whether the others fall into this category--is ending too-big-to-fail bailouts. That, to me, is the most important thing we can achieve here.

Never, ever again should the American taxpayer of this country be forced to write a check, which they did, because there is an implicit guarantee that the Federal Government of the United States will bail out a company lest it threaten the stability of the economy as a whole. It will make it so undesirable for a company to get too big or too complex with new capital, new leverage requirements, supervisory requirements, and set up a mechanism so large, complex companies can be shut down through bankruptcy or resolution in a way that does not threaten the economy or expose the American taxpayers, as they have been. It is a resolution, it is a bankruptcy, it is a receivership, and it is painful to creditors, to shareholders, and to the management who bear the burden but not taxpayers.

We are very close to achieving that. Again, I thank Mark Warner of Virginia and Bob Corker of Tennessee who dealt with this issue, this and systemic risk, which I will mention in a minute. They worked I don't know how many hours sitting down trying to fashion this resolution mechanism. But the idea that we would watch the American taxpayer write out a check for $700 billion, knowing the reaction of the American public--by the way, in the absence of what we are trying to do here, I think we did the right thing. Had we not done it, the financial problem would have been a lot worse. We never again ought to be put in that position, where that is the only alternative we have. This bill will address that issue.

Secondly, we create an early warning system in the economy so somebody is looking out for the next big problem. The bill would create what we call a systemic risk council--that is our goal--that will have the job of looking across the economy to identify unsafe products, activities, institutions that could threaten the economy as a whole in the future. We cannot afford to be caught off guard again by obvious weaknesses in our system because no one is responsible for taking a broad view.

Again, it is not going to stop everything, but we did not have this ability in the past. Again, Mark Warner and Bob Corker have worked very hard on a resolution mechanism and systemic risk and all of us owe them a debt of gratitude for their efforts.

Third, we bring transparency and accountability to the exotic instruments, such as derivatives and credit default swaps, things that are rather arcane to most Americans, to put it mildly, but have been lurking too long in the dark and were able to cause untold damage to our economy because they lacked transparency and regulation. We change that in this bill. That is our hope anyway, if we get to the conclusion of it.

We have to regulate these activities that left investors and our economy open to the tremendous risks they did not even know existed. Literally, billions of dollars being traded--frankly, gambled--behind closed doors drove our economy to the verge of collapse. Senator Jack Reed of Rhode Island, Senator Judd Gregg of New Hampshire, and their staffs have been working on this issue over many weeks to try and come up with an intelligent, thoughtful, well-drafted set of proposals on these exotic instruments, particularly derivatives. I thank them for the job they have done, and I am confident when our colleagues have had a chance to be briefed about their efforts, there will be broad-based support for what is included in our bill.

We have to rein in these crazy compensation packages that have outraged the public and hurt companies by rewarding short-term profits and wild risk-taking. Senator Chuck Schumer of New York, Senator Mike Crapo of Idaho, and their staffs have been working on governance issues. More work needs to be done on this issue. I thank both our colleagues, again a Democrat and Republican, for trying to come up with ideas on governance issues that will avoid some of the problems with which we are all too familiar.

We create--and one that has attracted the most attention because of the issues involved--a strong and independent consumer protection watchdog, one that has never existed but has come to financial services. It is somewhat ironic we have a Consumer Product Safety Commission, so if we buy a toy for our children or a product or an appliance and it does not work or it causes us great harm or danger, there is a place called the Consumer Product Safety Commission which will protect us from these hazardous appliances.

Yet when it comes to financial services, we have had no place to go to get a similar kind of protection. That analogy has been drawn by others in the past, and I think it is an appropriate one.

We have undertaken this effort. It is controversial because I think there are a lot of fears people have about what we are trying to achieve with all this. Yet if you look back and you watch what has unfolded over the last couple years, and particularly where you see some of these barons of the financial services sector reaping millions of dollars in bonuses after their companies have been shored up through taxpayer efforts, and yet the very people who had their homes, their jobs, their retirement, their health care, their life savings put at risk, what do they get, having come up with the tax dollars to protect these industries? We want to see to it that we never have again the consumer of financial products be unprotected when we start examining these issues.

We are working on this issue to put together what I set out as principles that should be included in a consumer protection watchdog. The failure to protect consumers, as I think most people know, led to some of the dangerous practices we saw and put our economy at so much risk. People were given mortgages they did not understand and could not afford. To ensure strong consumer protection, the real question is: Will this office have the independence and the authority it needs to get the job done to take care of consumers?

I focused on four principles from the very beginning of this debate involving this consumer protection idea we hope to produce. One, that it have an independent head appointed by the President of the United States and confirmed by this body, the Senate; second, that it have an independent budget so the office will have the resources it needs to do the job; third, that it have the autonomy to craft rules to protect consumers; and fourth, an ability to enforce those rules as well.

With these features, the office, I think, can act to protect consumers from the kinds of abuses we have seen, such as skyrocketing credit card interest rates, an explosion in checking account fees or predatory lending by the mortgage industry. Where rent space is less important--not unimportant, less important--what power and authority it has is the critical question.

Obviously, we want to do this in a way that does not jeopardize the safety and soundness of institutions. I do not believe there necessarily is any conflict, although some suggest there may be.

We are trying to provide, as well, a mechanism to resolve when, in fact, we have some conflict between safety and soundness and consumer protection. I understand that concern. We are trying to accommodate that while simultaneously maintaining the independence and autonomy of this agency.

Our goal is to end the status quo, as I said earlier--words I am getting tired of using, but doing nothing is unacceptable--and to create a system where honest businesses, large and small, can thrive on a level playing field, where middle-class families can find work, invest with confidence, and achieve the dreams they have for themselves and their children.

Today, I am pleased to report that good work has been done by Democrats and Republicans both on the Banking Committee to put financial reform in a strong position. While we do not have a bipartisan agreement yet at all, we are trying to. I don't know if it will happen. I am optimistic it can happen. I have been around here long enough to know these things can fall apart easily. It is fragile. Complex issues you think you resolved can produce unintended consequences. Most importantly, getting it right--while I would like to get it done soon, I want to make sure we do it correctly and properly.

This is one of the hardest tasks I have been asked to undertake in my years here, to try and fashion these proposals in a way that can bring broad support in this institution. We do not have an agreement yet, but because I have colleagues, such as the ones I mentioned on the Democratic side, such as Jack Reed, Mark Warner, Chuck Schumer, Tim Johnson--I can go down the list of those who worked on the issues--and I also have colleagues such as Bob Corker, Dick Shelby, Judd Gregg, and others to make an effort on that side to see if we can make agreements.

I know everything we are hearing about Congress these days, that nothing seems to be working here, but we are making an effort to come up with a proposal that will achieve those goals, a good, strong bill and one that will enjoy good, strong support in this institution.

I hope I have not talked too long, but I wished to give at least a flavor of where things are today. As I said, we are not done yet. We are in a pretty strong position to achieve a good, strong bill and one we can be proud of in this institution.

I yield the floor and suggest the absence of a quorum.

Mr. President, reserving the right to object, I offered an amendment a week ago during the debate on the extenders legislation that is still on the floor of the Senate that would have paid for all the things the Senator from Michigan would like to see paid for, and we have things we need to do, such as unemployment insurance, an extension of that. We need to deal with the issue of these expiring tax provisions.

What we would do is simply say we start paying for things around here. So I offered an amendment that would do that. It was defeated here in the Senate. But at 8:15, I intend to come back here and offer that again as an alternative because I think probably everybody in the Senate agrees we need to address the concern of people who are unemployed in this economy, but we should do it in a way that is fiscally responsible. That is what my amendment will do. So, Mr. President, I object.

Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of H.R. 4853; that all after the enacting clause be stricken and the text of the Thune amendment 4376 be inserted; that the bill, as amended, be read a third time and passed, and the motion to reconsider be laid upon the table.

Mr. President, I would like to speak to the amendment I just proffered to the other side which was objected to.

I think there is a consensus in the Senate that we need to fix some of these problems we are facing, one of which is the expiration of unemployment insurance for people who are unemployed. There are a lot of tax provisions that are expiring that need to be extended, things such as the research and development tax credit, which is critical to innovation and competitiveness in this country, and a whole range of other tax credits which affect a broad range of our economy.

Also, I believe it is important that we provide some certainty to people who depend upon Federal policy, and one of those groups would be the physicians in this country who rely upon

Medicare reimbursements for much of their survival because they treat so many Medicare patients. Much of the patient base for many of the physicians in my area of the country, where we have a high elderly population, is Medicare. Obviously, physicians have been facing--up until last week--a 21-percent cut. That was addressed for 6 months, so we have fixed that. We have dealt with it for 6 months. Obviously, that is an issue that will come up again. What my amendment would have done was to solve that issue not just for the next 6 months but to the end of the year 2012. So physicians in this country would have gotten an additional 2 years of relief, so to speak, with regard to their reimbursement.

So I would suggest that inasmuch as these are all things we agree need to be done, the real basic disagreement here revolves around how do we do that.

What the other side has put forward is a series of proposals, starting with the first one, that had $70 billion in tax increases and almost $80 billion added to the Federal debt. The last proposal that was put forward by the Democratic majority had $50 billion in tax increases and $55 billion added to the Federal debt. We hope that this week we are going to see that slim down even further, and I would suggest we are making progress in the right direction. But I think it is still fair to say these things need to be paid for.

As many of my colleagues have pointed out, we have $13 trillion in debt that we owe. That includes debt that is owed between governmental agencies--we call that intergovernmental debt--as well as debt held by the public. If you can find it, the debt held just by the public is about $8.6 trillion. But remember, we are talking about trillions and trillions of dollars.

As my colleague from Tennessee just pointed out, it took 43 Presidents 232 years to get to $5.8 trillion. The amount of debt we compiled and accumulated between 1776 and 2008--232 years of American history--was $5.8 trillion. Now, under this President's budget, we will equal that amount in the next 5 years and double it in 10. In other words, we will double the Federal debt today in 5 years and triple it in 10. That is an astounding number. If you think about all of American history up until the year 2008--232 years and 43 Presidents to get to $5.8 trillion--we are going to double that amount in 5 years and triple it in 10. Staggering.

Under this new administration, we have already racked up enormous amounts of new debt because we added $1 trillion to the debt to pay for a stimulus bill which has not shown any evidence of job creation other than jobs that have been created here in Washington, DC, at the Federal Government level. I think you could argue that Washington's economy has benefited because we have created some government jobs, most of which are temporary census jobs. But if you look at the overall job statistics, we have lost somewhere in the neighborhood of 3 million jobs since the passage of the stimulus bill.

We passed health care expansion, which was sold as health care reform but, frankly, does little to reform health care and certainly doesn't do anything consequential to reduce health care costs. I think most Americans now realize, as insurance premiums continue to go up and as the Actuary and the Congressional Budget Office and the Joint Tax Committee all attest to the fact, we are going to see the cost curve bend up, not down, as a result of the passage of health care reform. This is a $2\1/2\ trillion expansion over a 10-year period, when it is fully implemented.

That is a massive new entitlement program on top of the entitlement programs that are already bearing down on us and leading us toward a situation where, in a very few years if we don't take some serious steps, this country is going to be bankrupt. We are going to be belly- up. It is as simple as that. You cannot continue to sustain trillion- dollar deficits year after year after year, which is what we are facing for the foreseeable and long-term future, and expect that we are not going to completely drive this country into the ditch.

So the amendment I offer pays for things. It says: Let's change the way we do things around here. Let's quit handing the bill to our children and grandchildren. Let's quit putting it on the credit card and saying to the next generation: You pay this.

There is certainly nothing wrong with the things the other side is trying to accomplish. As I said, I think there is consensus about addressing these serious needs in our economy right now. But the difference of opinion exists here about, how do you do that? We are simply saying: Let's pay for things. Let's start doing something different here in Washington. Let's do what the American family has to do, what the American small businesses have to do. Let's pay for things, for crying out loud. That is what my amendment would do. It would say: Here are some ways we can shave some savings and we can cut spending here in Washington, DC, and do all these things we think we ought to do without adding to the debt and without raising taxes in the process.

A few months back, here in the Senate, we passed legislation which was labeled as historic and passed to great fanfare. It was called pay- go legislation, and it created pay-go rules that suggested that from now on we are going to start paying for things. What has happened since the passage of pay-go? The Senate has approved, if you count the not- paid-for portions of the bill that is on the floor right now--of course, that hasn't been approved yet, but assuming it were--nearly $200 billion of new debt. From the time we said we are going to start paying for things, which was a few short months ago, we have waived the very rules that were going to put us on a path to fiscal responsibility and fiscal discipline, declared everything an emergency, and added almost $200 billion to the Federal debt.

So here we are today debating yet again another measure that will add more to the Federal debt, that will impose taxes on small businesses in our economy at a time when they are trying to get some momentum to help churn us out of this recession, get us back to where we are creating jobs and to a period of economic growth. All we are doing is piling new taxes on them--taxes on investment, taxes on small businesses, and taxes, of course, with the recent passage of the health care bill, literally on everybody because all those tax increases are going to get passed on to the American consumer.

So where are we? Here is where we are. There are a number of things that can be done that would do what the other side wants to do--to pay for the extension of unemployment benefits. One of those things would be that we could save the necessary amount of money to pay for this now.

The cost of extending unemployment benefits in the Democratic proposal, by the way, is $33 billion. That is a substantial amount of money, but there are many ways in which that could be paid for, all of which were included in my amendment last week, but let me suggest a couple of discrete parts of that amendment that might be stripped out and used to pay just for the unemployment insurance.

We can pay for the extension of the unemployment benefits by returning unspent stimulus funds, which would save $34.5 billion. So the $33 billion in unemployment benefits that need to be extended to people who have lost jobs in the recession could be paid for by returning unspent stimulus funds to the tune of $34.5 billion. So there would be enough to pay for the unemployment benefits and some left over.

It could also be paid for through a 5-percent cut to the 2010 appropriations and an expansion of the affordability exemption to the individual mandate in the health care reform law, which together would save $33.5 billion. So that would give the $33 billion that would be necessary to pay for the extension of unemployment benefits.

Alternatively, it could be paid for with the rescission of other unspent Federal funds, which would pay for it by saving $56 billion. So you could take care of the unemployment benefits, you would have $33 billion that is necessary to pay for that and $23 billion left over, hopefully to be put toward the Federal debt, which would be the best thing we could do for our children and grandchildren.

Finally, it could also be paid for with the inclusion in this bill of medical malpractice reform, which was also included in my amendment last week. That would save about $50 billion. So you would have $50 billion to pay for

the $33 billion in unemployment benefits and have $17 billion left over to put toward the Federal debt, which again would be the best thing we could do for our children and grandchildren.

So all these arguments that are made by my Democratic colleagues that these things are Draconian just aren't true. These are commonsense things that would give us the necessary resources to take care of the problem that is in front of us today but do it in a way that doesn't add billions and billions of dollars to the Federal debt, exacerbating what is already a very serious circumstance facing our children and grandchildren, which the Senator from Tennessee did a very good job of outlining. If you are a child under 18 in America today, the amount of debt you own is about $85,000. By the year 2017, that is going to be $196,000. So if you are a young person in America today who is under the age of 18, your share of the Federal debt is $85,000. Ten years from now, that will be $196,000--in fact, less than 10 years from now; in the year 2017.

I think all that leaves us with a very clear choice when it comes to how we solve problems here in Congress, here in the Senate, and how we deal with the immediate question before us this evening: How do we extend unemployment benefits to those who have lost jobs in the recession?

The other side has come forward with a proposal, again with billions and billions and billions of dollars that are not paid for, and that does go on the debt and that does get passed on to our children and grandchildren.

What we are offering are some commonsense ways, which means the Congress and the Federal Government may have to live on a little bit less. They are things that would require the Federal Government to go on a diet, if you will, in the same way the American people are having to go on a diet. The American people are being asked, because of this tough economy, to make hard choices with regard to their family budgets, with regard to their individual and personal lifestyles, with regard to their businesses. Everybody in this country is having to make decisions about cutting back a little bit. We could address this issue by just asking the Federal Government to take a little bit of a haircut, put the Federal Government on a little bit of a diet. We can achieve the savings necessary to pay for the proposal that is before us.

Again, as I said, $33 billion fixes the unemployment benefit issue, and I have just named four ways that could be paid for, with money left over that could be put toward the Federal debts. That is what this is about. That is what the discussion here is. This is very straightforward.

My colleagues on the other side have come up here this evening and will continue to offer unanimous consent requests to go ahead and do this but not pay for it, and people on our side are getting up and saying: Wait a minute. No, I object, and here is why. And the reason is because we believe in a very straightforward way that we ought to start doing what I think the American people expect of us, and that is for us to live within our means in the same way they do.

Unfortunately, regrettably, today, that is not what is happening here in the Congress. Year over year over year, we continue to spend and spend and spend and borrow and borrow and borrow like there is no tomorrow. Well, the chickens are going to come home to roost. Someday, the bills have to be paid. People where I come from in South Dakota understand that. There is no free lunch. When you borrow money, it has to be paid back. You can't spend money you don't have.

Those are all things that are happening here in Washington, DC today. We are spending money we don't have and we are borrowing money we don't have any idea about how we are going to pay it back. All we are simply doing is giving it to the next generation so they will have a bill facing them and a future that will shackle them with debt that they will be dealing with for their lifetimes and probably the lives of their children and grandchildren as well.

By way of illustration, because I think it is important to put things into perspective--sometimes I think it is very difficult to come to grips with what is $1 billion, what is $1 million, what is $1 trillion. I tried to break that down, to put it in perspective for myself so I can understand a little better what we are talking about. The numbers, the number of zeros on the end of that number, can be almost mind boggling to the average person in this country. Most of us are not used to dealing with numbers that are in that ballpark of $1 trillion.

What a trillion seconds is--if you took a trillion seconds, what would that translate into, by way of illustration and example--a trillion seconds, if you broke that down into years, would be almost 31,000 years; 31,746 years is what a trillion second is. If you take $1 trillion and you make a second a dollar and try to put it into terms I think the average American can understand, a trillion seconds represents 31,746 years.

Since most of us here are probably not going to live much more than 80 years--hopefully if we are lucky, we will live beyond that. Most of us here are going to live under 100 years. When you talk about a trillion seconds, which in the last--we have seen about 15 seconds pass here, and you add that up to a trillion, that is 31,746 years. Think about what $1 trillion represents, how much that is, the scale, the dimension we are talking about and what we are doing to future generations of Americans if we do not start taking the steps that are necessary to pay the bills around here.

This amendment I offered and that was objected to by the other side would have done that. It would have fixed the physician fee issue, not just until November of this year but for another 2 years beyond that, to the end of the year 2012. It would have addressed the issue of the expiring tax provisions which we are all concerned about. It is an important tax policy that needs to be extended that has expired and needs to be addressed. Also, as I said earlier, there is of course the issue before us this evening of unemployment benefits which, at a cost of $33 billion, could easily be offset by any of a number of things I suggested this evening.

I see my colleague from Utah has arrived on the floor. I know he too has an amendment he wishes to offer that I think makes a lot of sense. When it comes to creating jobs, he is someone with a small business background and understands what job creation is about and I understand he will have a request he will make of our colleagues on the other side as well, so at this point I yield the remainder of my time.