Floor Statements

Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Madam President, I want to address my colleagues on a couple of different issues. One would be to speak in support of part of the Coburn amendment, and the second one would be to speak on the issue of taxes.

I want to speak in favor of Senator Coburn's amendment that would repeal a special deal for California. As I have said before, Medicare's payment system for physicians is flawed in many ways. One of those flaws has resulted in unfairly low payments to physicians in my own State of Iowa and many other rural States over the course of many years.

Medicare payments vary from one area to another based upon geographic adjustments made by the Centers for Medicare and Medicaid Services. These adjustments are supposed to reflect the differences in the cost of providing care in different areas and equalizing physician payment. But the geographic adjustors have been a dismal failure. They do not accurately represent the costs in rural States. Instead, they have created unfairly low Medicare rates and have, in fact, even discouraged physicians from practicing in rural areas such as Arkansas, New Mexico, Missouri, Iowa, North Dakota, and maybe, you could say, a lot of rural States.

Last fall, I offered an amendment to reform the unfair formula that has caused these unduly low rural payments during the Finance Committee markup of the health care reform bill. My amendment requires CMS to use accurate data rather than inaccurate proxies to calculate the geographic adjustors for physician practice costs. My amendment was accepted unanimously by the entire Senate Finance Committee, and it was included in the Patient Protection and Affordable Care Act that was signed into law by the President in March. It is a national solution to this problem that has plagued so many rural States.

Unfortunately, the rural equity that my amendment would finally achieve has been endangered by the Democratic majority's sweetheart deals. One of these sweetheart deals was added to the Senate health care reform bill that is now law. This special deal was added behind the closed doors of the Senate majority leader, and it addressed the unfairly low payments in rural States. It was included in the Senate health reform bill for two of my Democratic colleagues from so-called frontier States. It is what I call the frontier freeloader provision. And it can be called that because it just helped five States at the expense of 45 others.

The frontier freeloader deal gives higher Medicaid payments to just five States--North Dakota, South Dakota, Montana, Wyoming, and Utah-- and it is at the expense of every other State. Even though Iowa, New Mexico, Arkansas, Missouri, and other rural States do not benefit from this deal, they have to pay for it. Here we are. Taxpayers in your State and mine--all the other 45 States--have to kick in to pay the $2 billion for higher Medicare payments for these 5 so-called frontier States. This is another example of how the secret deals made by the Democratic majority leader to get votes during health care reform led to bad policies such as the ``Cornhusker kickback,'' the ``Louisiana purchase,'' and the Florida ``Gator aid.'' I introduced legislation in April to repeal this sweetheart deal for frontier states. My bill, the Medicare Rural Health Care Equity Act, would eliminate this special deal for these five States. We should improve physician payments for all rural States, not just a select few.

The Coburn amendment would address a similar concern--yet another special deal for just one State has been included in the Democrat's tax extender bill. Section 522 of the Democratic substitute would provide $400 million over 10 years to create yet a new system for calculating payments for physicians in rural areas, but you know what, only in one State--California. This is just one more example of the sweetheart deals that have permeated the Democratic leadership's efforts during these times. Will these special deals ever stop? I strongly oppose these sweetheart deals, and I will continue to speak out against them, and I will continue to work to pass legislation to repeal these special deals, such as the Medicare Rural Health Care Equity Act, that I introduced this year.

That is why I strongly support the amendment by my colleague from Oklahoma to strike this $400 million sweetheart deal for California from the bill, and I urge my colleagues, especially those from other rural States, to do the same. You see, what happens here when you start doing something for 1 State here and 5 States over here--there are about 30 States, maybe 35 States that have similar problems. We ought to attack these similar problems with the same principle, as I see it.

As I said, I wish to continue to address my colleagues on the subject of time-sensitive tax legislative business. I have already spoken on other items. I have a chart here that says what the four items are that are time sensitive that we ought to be working on and how far we have gotten on some of them. Obviously, as you can see from the Xs there, we have not gotten very far on most of them.

Last week, I discussed the unfinished tax legislative business. This chart gives you an update of the legislation before the Senate. It deals with only one small, however important, part of unfinished tax legislative business.

These tax extenders are on their second Senate stop. This is the bill now before the Senate. As this chart shows, the tax extenders which are overdue by almost half a year are not alone. There are three other major areas of unfinished business.

One area is the one I discussed a couple of days ago--the alternative minimum tax, the AMT patch. That issue, if you do not deal with it, is going to raise the taxes of 24 million Americans, middle-class Americans who, frankly, were never intended to pay the alternative minimum tax. If we do not fix it, 24 million people are going to see their taxes go up.

Yesterday, I addressed the issue of the death tax. That is an area which is very important. I took a lot of time of my colleagues last night to explain the issue and particularly the impact on small, family-owned businesses that may be sold off because we do not have a good estate tax policy.

The third area and the one I am going to address now is the 2001 and 2003 tax rate cuts and family tax relief package. That is the one that, if Congress does nothing between now and December 31, starting January 1, 2011, the American people are going to have the biggest tax increase in the history of the country and without even a vote of Congress. Existing law, with the tax reductions of 2001 and 2003, sunsets. ``Sunset'' simply means that if Congress does nothing, the biggest tax increase in the history of the country happens without us even casting a vote here in the Senate.

As important as the AMT patch and the death tax are, these two I just mentioned are dwarfed by the impact of this third package of expiring tax provisions. I am referring to the marginal rate cuts and the family tax relief of the bipartisan tax relief that was enacted in 2001 and 2003. Efforts to make these tax relief packages permanent were rebuffed. The resistance was the result of a hard and determined minority back then, marshaled by the Senate Democratic leadership. It was reflected in the budget resolutions offered in filibusters.

Even more inexplicable than the Democratic leadership's failure to extend popular and bipartisan tax relief enacted in 2001 and 2003 were some of the reasons given. It was basically said that since Republicans wrote the law, it is our--meaning Republicans--problem. The left wing of the blogosphere echoed the Democratic leadership's position.

Some of those reflections in the blogosphere even alleged that the sunset was a Republican conspiracy. I

came across a 2007 posting on Daily KOS blog. The posting referred to the provisions of the Tax Increase Prevention and Reconciliation Act of 2005, which was enacted in May 2006. That legislation contained two basic pieces. One was an extension of lower rates for capital gains and dividends. Another was the extension of the alternative minimum tax patch. The poster's analysis concluded that the bill was a ``poison pill'' designed--can you believe it--to sabotage the economy, which supposedly would increase the prospects of Republican candidates in 2012. I know that sounds a little far-fetched, but that is what the KOS posting on their blog said. The argument seems to be that having popular and bipartisan tax relief from 2001 and 2003 all sunset at the end of 2010 would cause such an economic mess that the Democrats, assumed by the posters to be in power at the time, will take the blame and suffer at the polls.

In the posting titled ``The Monster Republican Tax Hike,'' the poster stated that:

Republican Congresses chose not to make their tax cuts . .

. permanent.

The argument seems to be that Republicans put sunset clauses in the bill solely to improve long-term budget projections and that responsibility for the expiration of tax relief rests completely with Republicans. The implication is that by lowering taxes, Republicans are responsible for a tax increase that would occur when the Democratic majorities control both Houses of Congress. That is a little far- fetched because it is just some sort of conspiracy that you can control the electorate and these things are going to exactly work out this way. That is obviously stupid, but that doesn't keep bloggers from talking-- whatever they want to believe.

The commentaries I just referred to are available to anyone in the April 12, 2007, edition of the Congressional Record.

I have heard some Members on the other side as well as key staff have made similar assertions. As one who was involved in the writing of these tax relief plans of 2001 and 2003, I want to tell my fellow Senators without reservation that these assertions are absolutely untrue, besides being ridiculous. To begin with, it is completely ridiculous to suggest that President Bush and Republicans in general did not intend or desire the permanence of tax relief. President Bush and Republicans in general have favored tax relief permanence. You need to look no further than the budgets to which I referred. The administration and Republican Congress budgeted for extension of the bipartisan tax relief provisions. That action affected the bottom lines of those budgets.

We heard over and over the criticism of those budgets. We heard it from the Democratic leadership, liberal think tanks, and some sympathetic east coast media. As a matter of fact, after 3\1/2\ years of congressional control, we still hear the Democratic leadership's criticism every day. Just recently, the Speaker of the House was asked when the Democratic leadership would cease laying the blame for all fiscal problems on Republican budgets of the years 2001 to 2006. MSNBC's Chuck Todd recently interviewed the highest ranking Democrat in the House. Mr. Todd asked if there was a statute of limitations on placing responsibility on the Presidency of Mr. Bush.

At what point do you think the public says something [like

this]? ``You know what, yes, we were unhappy with the Bush

administration . . . [but] stop blaming the Bush

administration.

Mr. Todd went on to say:

When does that run out?

But then the Speaker specifically replied:

Well, it runs out when the problems go away.

The blame game is no substitute for doing the job you have been hired to do. People elect folks to public office to do--what? To govern; govern at the will of the people. Governing is not just about enjoying the benefits of public office. This is a public trust we hold. We work for the American people; they don't work for us. Part of governing is also about making choices. Some of those choices are tough, as we know, and those of us in public life need to be accountable for those choices.

The Democratic leadership cannot have it both ways. They cannot continue the bipartisan tax relief and not be responsible for the deficit impact those policies carry. No family can make decisions about its budget and evade the consequences by blaming their next-door neighbors. No business can make decisions about its budget and evade the consequences by blaming a competing business. The fiscal consequences are an important part of that decision.

The statutory pay-go or pay-as-you-go regime was enacted as part of the last debt limit increase. It covers only part of the revenue loss of making permanent the bipartisan tax relief plans of 2001 and 2003. For instance, the alternative minimum tax patch is extended for only 2 years. Death tax policy is extended at 2009 levels only through 2011. How do you plan estates when you only have a tax law in place for 2 years?

Even with those limitations, the Joint Committee on Taxation states: Complying with the pay-go rule means a revenue loss of over $1.5 trillion over 10 years.

I ask unanimous consent to have printed in the Record a copy of the Joint Committee on Taxation's estimate of the tax relief covered by statutory pay-go. And this is a summation of that.

The expiring tax relief I am talking about today includes the marginal rate cuts and family tax relief. Under the statutory pay as you go, the amount permitted in this area is about $1.4 trillion as you can see at the top of the chart on the right. It covers about 80 percent of extending all of the marginal rate cuts and family tax relief from the 2001 and 2003 bipartisan plan.

That number makes sense because the bipartisan tax relief plans cut taxes for virtually every American family who pays income tax. How significant and how widespread is this tax relief? This chart here, drawn by the Congressional Budget Office--and I want to remind people throughout the Nation that CBO is a professional group of people who see numbers as what they are, void of politics, and make predictions. So I hope this may shed some light on the question of how significant and widespread is the tax relief.

The line measures the effective tax rate paid by the top 5 percent of the taxpayers. That is at the top, the top line. This group roughly represents those taxpaying families with incomes over $250,000. Under the Democratic leadership's budget, this line will go back up to where it was in the year 2000. That is also where the President's budget, meaning President Obama's budget, and the statutory pay-as-you-go regime would take the rates.

The Republicans believe this significant tax increase will be a mistake. We hope we will be able to debate this policy in the House and Senate, in committee and on the floor. That was, after all, the process that was followed when the bipartisan tax relief plans were passed in years 2001, 2003, and 2005.

We will point out that about half of the heavy tax increases will fall on small business owners. The top marginal rate on small business owners will rise by 17 percent. Democrats and Republicans agree, small businesses are a key job creator of the future and for a long period of time in our country. President Obama correctly points out that small business creates 70 percent of new jobs. I do not argue with his percentage.

The rest will also hit investment hard. The top capital gains rate will rise by 33 percent. The top dividend rate could rise by almost 275 percent. All of this is set to occur not at some far distant future point, it occurs a little over a half a year from right now.

We all hope the economy is on a path to recovery. But does this heavy tax increase on small business owners and investments ever make sense? Because even the most liberal Members on the other side might wonder whether it makes sense right now to increase taxes at this time. Is the recession ending? There is good news some days, bad news some days. But the uncertainty is a factor that people do not want to move forward with investment and creating jobs.

Do we think then that the private sector will grow if we hit small businesses and investors this hard 6 months from now? They are not going to wait 6 months from now to make some decisions. They are making those decisions right now. If we can give them some certainty, I think it would be a big boost for our economy.

You can see that the broad bipartisan tax relief brought the effective rate down with respect to the bottom 95 percent of taxpayers. This is the red line. Some of my colleagues on the other side of the aisle may be thinking to themselves, sure, this is true for income taxes. But what about other Federal taxes such as Social Security, which make up a large percentage of the taxes paid by middle and low- income individuals?

Well, this chart is not just a depiction of Federal income taxes, it includes all Federal taxes. This includes Social Security, other payroll taxes, excise taxes, frequently referred to by my colleagues on the other side of the aisle as regressive taxes, everything, including all Federal taxes over the last 30 years.

The top 5 percent has paid a lot higher effective tax rate than the bottom 95 percent. It has been that way no matter which party has controlled the White House or controlled Congress or controlled both. It shows something you would never know if you listened to the rhetoric from the other side or even the punditry of the media and the left.

Here is what it shows: A progressive income tax system is very deeply embedded into our culture. The bipartisan tax relief plans of 2001 and 2003 made the system yet more progressive. Those plans brought the rates down for the bottom 95 percent of taxpayers. The 2001 and 2003 tax relief plans dropped the effective tax rate for taxpaying families under $250,000 to their lowest levels in a whole generation.

This is the current law level of taxation. In a little over half a year, these rates will pop back up for all of these taxpayers. I have a couple of charts that illustrate how significant the tax hit will be. Middle-income families will run right through these tax walls. I have used these charts several times in the last few months.

For a family of four with an income of $50,000, that is a tax wall of a $2,300 tax increase. For a single mom with two kids earning $30,000, that tax wall will be $1,100. The President, as powerful as he is, cannot unilaterally hike or cut taxes. He needs a bill from Congress to do that. On our side, we want all of the tax relief made permanent. We want the opportunity to debate and to amend a bill that deals with this basic level of taxation.

As has been made clear for the last 3\1/2\ years, Republicans do not control this Congress. We cannot decide the fate of the marginal rate cuts and family tax relief. This is unfinished business. It is unfinished tax legislative business that affects every American taxpayer. It will have fiscal consequences. They are pretty significant fiscal consequences, as you can see by the figures on this chart. That is going to raise taxes an awful lot. If the Democratic leadership wants to keep these levels of taxation low, then they have to deal with the fiscal consequences. Alternately, the Democratic leadership can raise taxes and claim the revenue.

Not changing the law by failing to act is the same as raising rates on virtually every American taxpayer. But they will have to explain to the taxpayers why they raised taxes by almost 10 percent, on average. In the 2006 election, almost 4 years ago, the American people provided the Democratic leadership with control of the Congress. In the 2008 election, over 18 months ago, the American people provided the Democratic leadership with yet the largest majority in more than a generation. They also provided the Democratic leadership with a President of their party.

The Democratic leadership spent the periods of 2001 to 2006 thwarting our efforts to make bipartisan tax relief of 2001 and 2003 permanent. It would seem okay to keep Republican bills from 2001 through 2006 from being made permanent, but the 2001 tax bill was very bipartisan.

Upon assuming control, they have spent 3\1/2\ years with no legislation to make permanent or even extend marginal tax rates and family tax relief packages. My friends in the Democratic leadership need to step to the plate. We have had budgets and statutory pay-as- you-go. We have debated this and voted on the breadth and composition of marginal rate cuts and family tax relief in those contexts, yet no legislative action; no House committee and floor action; no Senate committee and floor action. And that would be the bottom line there. The Xs show nothing happening on something to give permanence to tax law, to give predictability to the future of those people who have to put up money to create jobs that expand our economy.

Without it, the biggest tax increase in the history of the country could be a fact. So I say once again, step to the plate. Blaming former President George W. Bush and Republican Congresses of many sessions ago is no substitute for running this time-sensitive tax legislative business through the process. Put forward proposals. Let us debate those proposals. Let's allow for amendments. Allow votes on amendments. Do the people's business. It is time to check every one of these boxes.

Mr. President, at around lunchtime, the Senate voted on Senator Thune's alternative to the Democratic leadership's extender bill. Senator Thune's amendment took the exact opposite approach to the Democratic leadership's substitute. It cuts taxes by $26 billion by extending current law. It cut spending by over $100 billion, and reduced the deficit by $68 billion. Those are Congressional Budget Office, CBO, and Joint Committee on Taxation estimates.

According to the Congressional Budget Office, CBO, the current version of the Democratic leadership's extenders substitute would increase direct spending by about $105 billion through 2020 and raise revenues by about $50 billion over that period, resulting in a net deficit increase of about $55 billion for the 2010-2020 period.

The contrast couldn't be clearer. The Republican Conference, along with one member of the Senate Democratic Caucus, voted to change the bottom-line fiscal effects of the Democratic leadership's extender substitute. The Thune amendment would reduce the deficit by $13 billion more than the amount the Democratic leadership's extender substitute would add to the deficit. Senator Thune's amendment reached this better fiscal result by restraining Federal spending.

All but one of the Democratic Caucus who were present, 57 Senators, voted against Senator Thune's amendment.

The junior Senator from Florida, one of the 41 Senators who voted for Senator Thune's amendment, came to the Senate floor to highlight the differences between the Democratic Caucus and the Republican Conference in the approach to this extender bill.

The junior Senator from Michigan also made some comments on the current fiscal problems. She made her arguments in response to comments from the junior Senator from Florida. Last year, at about this time, there was a lot of revision or perhaps editing of recent budget history. I expect more of it from some on the other side.

The President signaled as much in an interview with George Stephanopoulos a few months ago. I agree with the President that there's a lot of revisionism in the debate.

The revisionist history basically boils down to two conclusions:

1. That all of the ``good'' fiscal history of the 1990s was derived from a partisan tax increase bill of 1993; and

2. That all of the ``bad'' fiscal history of this decade to date is attributable to the bipartisan tax relief plans.

Not surprisingly, nearly all of the revisionists who spoke generally oppose tax relief and support tax increases. The same crew generally support spending increases and oppose spending cuts.

In the debate so far, many on this side have pointed out some key, undeniable facts. The stimulus bill passed by the Senate, with interest included, increases the deficit by over $1 trillion. The stimulus bill was a heavy stew of spending increases and refundable tax credits, seasoned with small pieces of tax relief. The bill passed by the Senate had new temporary spending, that,

if made permanent, will burden future budget deficits by over $3 trillion. That is not Chuck Grassley speaking. It is the official Congressional scorekeeper, the Congressional Budget Office, CBO.

All of this occurred in an environment where the automatic economic stabilizers thankfully kicked in to help the most unfortunate in America with unemployment insurance, food stamps and other benefits.

That antirecessionary spending, together with lower tax receipts, and the TARP activities has set a fiscal table of a deficit of $1.4 trillion for the fiscal year that ended several months ago. That is the highest deficit, as a percentage of the economy, in post-World War II history.

Not a pretty fiscal picture. And it is going to get a lot uglier with the budget put forward by the President this year. It's the same result under the budget crafted last year by the Democratic leadership. So, for the folks who see this bill as an opportunity to ``recover'' America with government taking a larger share of the economy over the long-term, I say congratulations. You have recovered America with a vast expansion of government and the American people have a lot of red ink to look forward to.

Members who voted for the budget and the fiscal policy envisioned in it put us on the path to a bigger role for the government. But supporters of that fiscal policy need to own up to the fiscal course they are charting.

That's where the revisionist history comes from. From the perspective of those on our side, it's seems to be a strategy to divert, through a twisted blame game, from the facts before us. How is the history revisionist? Let's take each conclusion one-by-one.

The first conclusion is that all of the ``good'' fiscal history was derived from the 1993 tax increase. To test that assertion, all you have to do is take a look at data from the Clinton administration.

The much-ballyhooed partisan tax increase of 1993 accounts for 13 percent of the deficit reduction in the 1990s. Thirteen percent. That 13 percent figure was calculated by the Clinton administration's Office of Management and Budget, OMB.

The biggest source of deficit reduction, 35 percent, came from a reduction in defense spending. Of course, that fiscal benefit originated from President Reagan's stare-down of the communist regime in Russia. The same folks on that side who opposed President Reagan's defense build-up take credit for the fiscal benefit of the ``peace dividend.''

The next biggest source of deficit reduction, 32 percent, came from other revenue. Basically, this was the fiscal benefit from pro-growth policies, like the bipartisan capital gains tax cut in 1997, and the free-trade agreements President Clinton, with Republican votes, established.

The savings from the policies I have pointed out translated to interest savings. Interest savings accounts for 15 percent of the deficit reduction.

Now, for all the chest-thumping about the 1990s, the chest thumpers, who push for big social spending, didn't bring much to the deficit reduction table in the 1990s. Their contribution was 5 percent.

What's more the fiscal revisionist historians in this body tend to forget who the players were. They are correct that there was a Democratic President in the White House. But they conveniently forget that Republicans controlled the Congress for the period where the deficit came down and turned to surplus. They tend to forget they fought the principle of a balanced budget that was the centerpiece of Republican fiscal policy.

Do my friends on the Democratic side remember the government shutdown of late 1995? Remember what that was about? It was about a plan to balance the budget. Republicans paid a political price for forcing the issue, but, in 1997, President Clinton agreed. Recall as well all through the 1990s what the year-end battles were about.

On one side, congressional Democrats and the Clinton administration pushed for more spending. On the other side, congressional Republicans were pushing for tax relief. In the end, both sides compromised. That is the real fiscal history of the 1990s.

Let's turn to the other conclusion of the revisionist fiscal historians. That conclusion is that, in this decade, all fiscal problems are attributable to the widespread tax relief enacted in 2001, 2003, 2004, and 2006.

In 2001, President Bush came into office. He inherited an economy that was careening downhill. Investment started to go flat in 2000. The tech-fueled stock market bubble was bursting. Then came the economic shocks of the 9-11 terrorist attacks.

Add in the corporate scandals to that economic environment.

And it is true, as fiscal year 2001 came to a close, the projected surplus turned to a deficit.

In just the right time, the 2001 tax relief plan started to kick in. As the tax relief hit full force in 2003, the deficits grew smaller. This pattern continued up through 2007.

If my comments were meant to be partisan shots, I could say this favorable fiscal path from 2003 to 2007 was the only period, aside from 6 months in 2001, where Republicans controlled the White House and the Congress. But, unlike the fiscal history revisionists, I am not trying to make any partisan points, I am just trying to get to the fiscal facts.

There is also data that compares the tax receipts for 4 years after the much-ballyhooed 1993 tax increase and the 4-year period after the 2003 tax cuts.

In 1993, the Clinton tax increase brought in more revenue as compared to the 2003 tax cut. That trend reversed as both policies moved along. Over the first few years, the extra revenue went up over time relative to the flat line of the 1993 tax increase.

So, let's get the fiscal history right.

The progrowth tax and trade policies of the 1990's along with the ``peace dividend'' had a lot more to do with the deficit reduction in the 1990s than the 1993 tax increase. In this decade, deficits went down after the tax relief plans were put in full effect.

No economist I am aware of would link the bursting of the housing bubble with the bipartisan tax relief plans of 2001 and 2003. Likewise, I know of no economic research that concludes that the bipartisan tax relief of 2001 and 2003 caused the financial meltdown of September and October 2008.

As I said, from the period of 2003 through 2007, after the bipartisan tax relief program was in full effect, the general pattern was this: revenues went up and deficits went down.

That is the past. We need to make sure we understand it. But what is most important is the future. People in our States send us here to deal with future policy.

They don't send us here to flog one another, like partisan cartoon cut-out characters, over past policies. They don't send us here to endlessly point fingers of blame. The substitute before us takes us in the direction of more deficits and debt. The Thune amendment, which was rejected by most of the Democratic Caucus, would have put us on a path in the opposite fiscal direction. My friends on the other side fool no one if they pretend that the fiscal choices made by the Democratic Leadership and the President over the last year have nothing to do with this rapidly rising debt.

President Obama rightly focused us on the future with his eloquence during the campaign. I would like to paraphrase a quote from the President's nomination acceptance speech:

We need a President who can face the threats of the future,

not grasping at the ideas of the past.

President Obama was right.

We need a President, and I would add Congressmen and Senators, who can face the threats of the future. Grasping at ideas of the past or playing the partisan blame game will not deal with the threats to our fiscal future.

It is not too late to correct the excesses of the stimulus bill or the bloated appropriations bills that will come. The Senate missed an opportunity, with a partisan rejection of Senator Thune's alternative.

Senator McCaskill's and Sessions' amendment, which calls for a time out on the exponentially rising levels of appropriations spending, is a good start. The President called on the Democratic leadership to do something similar. That is what the American people want and need. There is a way to reach a real bipartisan compromise, not just picking off a few Senators that frequently vote with the Democrats.

Mr. President, I ask unanimous consent that Michaela Byrne and Jeremy Long, members of my staff, be granted floor privileges for the duration of the debate on H.R. 4213.

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

Mr. President, I wish to speak as in morning business.

Mr. President, the legislative business before the Senate deals with the so-called tax extenders. These extenders, as important as they are, represent only a small portion of the time- sensitive tax legislative business that needs to be completed.

I have a chart that I have used the last few days illustrating the status of several pieces of absolutely must-do tax legislation.

Earlier this week, I discussed the lack of action on this year's alternative minimum tax. I refer to that as an AMT patch. In a day or two, I will discuss the failure of Congress to act on the bipartisan 2001 and 2003 marginal rate cuts and Family Tax Relief Act.

This evening, I want to discuss the lack of action on estate tax reform.

Most of my colleagues know this about me--for as many years as I have been a representative of the people of Iowa, I have never believed that death--a person dying--should be a taxable event.

Taxing people's assets upon their death is plain wrong, and their heirs should not be forced to sell a single asset in order to meet this arbitrary tax due date caused by death.

Company assets should not have to be sold to pay taxes. The market, in fact, should determine when things are bought and sold because that is the very best measurement when a willing buyer meets a willing seller and they agree on a price and a time when a company should be sold. In other words, if you have to do it because somebody died, a fire-sale approach probably does not determine the true value of that property and, consequently, less money to the heirs and even less tax money coming in.

That is where I come from. We ought to repeal the death tax. But that is not political reality. The political reality is that there are not 60 votes in the Senate for that policy. Unfortunately, while repeal is the law of the land today, in a few months the law will take a sharp turn in the other direction--a wrong direction.

Under current law, in 2011, we will once again have an estate tax due and owing within 9 months of death of 55 percent and even in some cases 60 percent. That is not right. We force many unwilling sellers to have to deal with a very willing shark of a buyer waiting in the murky waters of tax uncertainty.

Some people wonder why I care so much about this issue. Pundits might say that Iowa is poor compared to places such as New York City and that land and companies are not worth much.

Much of the press attention has been paid to what the current law does this year. For instance, the New York Times printed an article on how the current law repeal of the estate tax applies to a Texas billionaire who died a few weeks ago.

We are almost half a year away from a tax policy that a supermajority of Senators say they do not support. Yet we are stuck in a mud hole. This time-sensitive issue has taken a back seat in this body to everything else.

My colleagues may not know that Iowa has 99 counties, and I have visited each of the 99 counties every year for the last 29 years to hold town meetings and to get people's opinions. Let me give a couple examples I have learned of why I think this issue of doing something quickly about the estate tax is a very important issue and a very timely issue.

I want to talk about some people who live in Iowa. Not only do they live in Iowa, they have devoted their entire life for multiple generations to build businesses and create good jobs for the people of rural Iowa.

Over 44 years ago, Eugene and Mary Sukup started a grain handling and storage manufacturing company in Sheffield, IA. Today, the Sukups and their two sons and their families are still headquartered in Sheffield, IA, population of a whopping 990 people, about 300 more than the town in which I live. They employ over 300 people from five different counties in good-paying jobs with a good retirement plan.

In fact, the original employee team that started with them almost 40 years ago is still there today and, in many cases, the next generation has also joined the team.

This chart depicts one of the main products they make and sell. For city folks who are watching, this piece of equipment is a building called a grain bin. I have some grain bins such as this on my family farm that my son Robin operates.

I ask unanimous consent to have printed in the Record a short history of the innovative efforts of the Sukup family.

Mr. President, in addition, they have facilities in six other States also contributing to those States' rural economies, such as Defiance, OH, Jonesboro, AR, Arcola, IL, Aurora, NE, and Watertown, SD--places where good jobs and hard work that is not flashy and does not make the scandal page of the big city newspapers are valued in those towns as important places of employment and contribute to the economy, places where people invest in the local economy and contribute as good citizens to community improvement and betterment.

They used to call these kinds of folks the ``pillars of the community,'' in old-fashioned terms. But in today's economy, these are folks devoted to American values and small town America. They may sell their products all over the United States. They also sell their products--would you believe it--all over the world. But you know what, they manufacture those products right there in that small community of Sheffield, IA. As a family farmer, the Sukups have been successful because they make a great product, and this is one of their products.

I wish to move on to another little Iowa town, somewhat larger than Sheffield, the town of Shenandoah. That is where Lloyd Inc. is located. Shenandoah is a community of almost 5,000 people--4,944 to be precise. Our colleague Senator Ensign is the lone practitioner of animal medicine in the Senate. He might be familiar with the products that Lloyd Inc. in Shenandoah, IA, puts out.

It, too, is not a flashy company. They started making animal dietary mixes in 1958, and now they are a significant provider of veterinary drugs. The chart depicts one of Lloyd Inc.'s products. These are different animals. I am not going to go into too much detail about them.

Eugene Lloyd is a doctor of veterinary medicine. He is the CEO of the company. Dr. Lloyd has told me the company has never let go of any employees due to poor business cycles.

Lloyd Inc. employs well over 90 well-educated people in this community of Shenandoah in southwest Iowa. The company has also provided generous health care and retirement plans to their employees, and as I said, in rural America, those benefits are very important.

Finally, both the company and Dr. Lloyd and his family have given generously throughout the years to educational scholarships, unrestricted grants to Dr. Lloyd's and his wife's alma mater, and provided financial and product support to address disasters, both locally and internationally.

Unfortunately, even after vigilant estate planning, these two families, the Lloyd and the Sukup family-owned companies will be facing a very large combined estate tax bill. That bill could total tens of millions of dollars between the two companies. That is tens of millions of dollars that will leave the State of Iowa. These companies might face a fire sale, and so often in this circumstance a company is sold to someone with no interest or no desire to maintain the current location or contributions to the community.

There are two companies, two towns, six counties, four families, and hundreds of employees, and all will be hurt if we do not do something about the death tax. Businesses will be sold, locations will be shut down, real people will lose good jobs. The State of Iowa will lose tens of millions of dollars of hard capital invested for over 90 years between these two companies. I barely even mentioned how much salary, retirement plans, and charitable contributions they have made to those little Iowa communities.

The multinational or foreign companies will come calling. They will be circling these home-grown businesses. Trust me, they will. We have seen it before. Perhaps they will be accompanied by sharpie hedge-fund types from big cities, such as New York, Boston or Chicago. They will go to places such as Sheffield and Shenandoah, but they will not go there to live. When they arrive we will have no one else to blame but us, right here in the Congress, for letting these family-owned companies committed to the community go away.

The punitive death tax policy passionately pushed by my liberal friends will have greased the skids. It will have killed the local roots of these successful small town businesses. All of us from rural America are trying to battle what is called out-migration. If we leave the death tax in place in its punitive form, in 2011 it will take away jobs, businesses, and people out of rural America. That is why I care about this death tax debate: because of real people in real Iowa communities invested in expanding in those rural counties.

It is strange, in New York City, how many multimillionaires live in any one block in Manhattan. But those so-called multimillionaires seem a little different when you check out the Iowa corn crop or you sit together at church or at a grandson's baseball game. They are, as the popular book says, ``The Millionaire Next Door.'' They are the pillars who help hold up all those 99 counties that I visit every year.

I know these are not the kinds of stories that make the front pages of our big city newspapers. When family businesses are sold and shut down or move out of the State or even move out of the United States, it certainly makes the front pages of the newspapers that I really care about. So when you hear about the number of estates affected, keep in mind to some extent that statistic is only a snapshot. The estate tax return is filed by the representative of a dead person. Those statistics so often dwelled on by many of the proponents of the death tax do not capture the full picture. The statistic is only a look at the dead person who owned the business or farm. It does not take into account the dead person's family, the dead person's employees, the dead person's neighbors. All of those folks are affected if the death tax burdens that family's business or farm and causes it to move on to some other owner and maybe out of the community.

There seems to be a strategy by the bicameral Democratic leadership to slow-walk a resolution of this vexing problem. The slow-walk strategy will leave the American people with the current law, and that current law is $1 million compared to the zero today or what we could have as a compromise between the House and Senate: $3.5 million on the one hand, $5 million on the other.

The junior Senator from Vermont as always is passionate and transparent about what he thinks and believes. He has said we should retain current law. His position is that $253 billion in revenue gained from current law is better spent by those of us in Washington, no doubt spent on what the junior Senator believes are valuable programs, probably some programs that I support.

Should his view prevail, however, we will see the essence of the economic policy of the Democratic leadership over the past 18 months. It will be another income redistribution policy. The President defined it a couple of years ago. It will be a program designed to ``spread the wealth around.'' More taxes for those who have saved and sacrificed during life, more spending on those who are demanding ever more generous tax-funded subsidies. That is basically what redistribution is all about. It is about folks in this city of Washington ``spreading the wealth around.''

I have heard rumors and read press reports that indicate that various Senators have a lot of company in the House and Senate Democratic caucuses. For instance, maybe the position taken by the Senator from Vermont might have that support. But those who share his view or views like that have not been as transparent as the junior Senator from Vermont, who is very transparent. You know exactly where he stands, and that is an honorable position for any Senator to take. I say that even though I disagree with him some.

The number of quiet supporters of the junior Senator from Vermont may be high enough to prevent the Democratic leadership from allowing a clean vote on a bipartisan compromise. I believe that bipartisan compromise is one of a $5 million exemption and a 35-percent tax rate compared to the $3.5 million and 45 percent tax rate in the House of Representatives.

The American people need to hear some data about how current law will apply when it goes to that million-dollar exemption. They need to know where the revenue will come from. So we always go, around this Senate, to the Joint Committee on Taxation. That is a nonpartisan official congressional scorekeeper on the issue of taxes--and all taxes. We need to also know about the number of affected estates.

Under current law it will be at least--can you believe it--at least 10 times higher than what it would be under the Lincoln-Kyl bipartisan compromise that I just described, the compromise that would cap the death tax rate at 35 percent. It would also provide that unified credit equivalent amount of about $5 million.

So here is that data from that nonpartisan Joint Committee on Taxation that you see right here. We are going to talk about current law, which is the tax law that is right now going to take effect in 2011 if we do not do anything. That is going to arrive in just a little over 6 months.

Under current law, 44,000 estates will be taxable. Under the Lincoln- Kyl compromise, 4,000 estates would be taxable. You can see here, for the year 2011, Lincoln-Kyl, 4,000; current law, with a $1 million exemption, 44,400 estates. That is quite a big difference.

It means that current law, the path on which we seem to be slow- walking, means 10 times the number of estates will be hit by the tax. The Lincoln-Kyl compromise means that only the top 10 percent, the wealthiest estates, will be hit by the death tax.

If you project that out, as this chart does, 8 years of current law over the 10 years, you will find that roughly 616,000 estates will be taxed over that period, and under the Lincoln-Kyl compromise, roughly 54,000 estates would be taxable over that period of time.

To give everyone a bit of perspective, I wish to share some Iowa farm data. It is from the U.S. Department of Agriculture. Under current law, in a bit over 6 months, with the $1 million exemption that is on the law now taking place, the line between a taxable farm and nontaxable farm will be that $1 million.

The U.S. Department of Agriculture reports that there were 92,800 farms covering 86 percent of Iowa in 2007. In 2007, the average Iowa farm was 331 acres. According to a survey conducted by Iowa State University in 2009, the average acre was worth $3,371. That means that a farm the size of the 2007 Iowa average, at average 2009 prices in Iowa, is going to be worth $1,446,801. In 2007, there were 19,302 Iowa farms with 500 or more acres worth at least $2.1 million at average 2009 prices. Now, keep in mind that farmers sometimes carry debt. That would reduce the value of the farm. But, on the other hand, farmers have other farm-related assets, such as the farm machinery to operate it, that are not included in the figures I just cited.

This data shows that the current-law estate tax could hit many Iowa farmers. For those folks working the lands, this is an unwelcome certainty. As I indicated earlier, the tax is an impediment to passing on the family business--in this case, the family farm. Current-law death taxes, quietly supported by, apparently, many Members on the other side--and that is that $1 million figure--will act as an incentive to break down many family farms and small businesses. These family farms and small businesses form the economic backbone of their hard-working heartland communities.

What amazes me is the zeal by some to use tax policy to inflict this kind of damage on family farms and small businesses such as the two I pointed out in Shenandoah, IA, and Sheffield, IA. All of this is somehow supposed to fund an ever-expanding set of Federal benefits to many who do not pay any income tax. The signal sent is that those who work hard, save, and want to pass something on to their family exist solely to fund these bloated Federal programs. So why work hard? Why save? Why not work less? Why not go into debt and live beyond your means? In the end, the government levels everyone out at death by, as the President said, ``spreading the wealth around.''

I have not touched on the damage being inflicted now by our inaction on estate tax reform. At every townhall, I hear from folks--in fact, I just finished a half hour monthly television program I do back in the State of Iowa. And one of the callers called in: When are you going to do something about the estate tax? Kind of embarrassing to tell him. I told him to watch my speech that I was going to give just as soon as the program is over. So here I am. But everybody at my townhalls--I hear from folks who ask these kinds of questions. They ask: What is the law going to be? Will it be retroactive? When will the Congress address this action? Why delay?

Recently, I received a letter that was signed by 750 Iowa attorneys asking for a resolution of this issue. At a time when families are dealing with the emotional and financial stress of the death of a family member, why do we add this additional confusion and anxiety for the family or for a counselor who cannot even advise his clients on what they should do in planning an estate?

I am afraid I do not have a good answer for these folks, just as a few minutes ago on my television program I did not have an answer for that person who called in from Pocahontas, IA, wanting to know what we are going to do about this. But we do need to get an answer. Hopefully, it is one that will be bipartisan, such as Lincoln-Kyl, and limits the reach of the death tax to at least the top 10 percent of the wealthiest estates. At the very least, we owe the American people an open and intellectually honest debate and votes up or down on a very fair policy.

Resolving the estate tax nightmare with real reform is time-sensitive tax legislation business. It is nowhere on the Senate's radar screen. As I point to this checklist once again that I bring to the Senate almost every day, I urge my friends in the Democratic leadership to put it on the Senate's radar screen.

I yield the floor.

Mr. President, I wish to bring to my colleagues' attention the fact that we have this problem we deal with too often called the alternative minimum tax. I bring it to my colleagues' attention.

Last week, I had an opportunity to address my colleagues on the unfinished tax legislative business. These four items are the unfinished business to which I was referring. The legislation before the Senate deals with only one but, of course, an important piece of the unfinished legislative business. These tax extenders are on their second legislative stop through the Senate.

As the chart shows, the tax extenders, which are overdue by almost half a year, are not alone in that unfinished business. There are three other major areas of unfinished business. As we can see from the chart, we have the death tax with which we have not dealt. Another area is the 2001 to 2003 tax rate cuts and family tax relief package. Then the third area is the AMT patch, the alternative minimum tax.

Over the past few years, the AMT is frequently a subject of many of my addresses to my colleagues. I intend to keep talking about the AMT until this Congress actually takes action on reforming the AMT.

Instead of taking action, Congress this session has done absolutely nothing, and the problem continues to get worse for at least 26 million American families--let me emphasize middle-class American families--who will be caught in this AMT trap and, as a matter of fact, are now already caught.

Those being caught or are caught are the families who make estimated tax payments and who will be making their second payment this very day.

Last year, in 2009, a bit over 4 million families were hit by the alternative minimum tax. I think this was 4 million families too many, but it is considerably better than the more than 26 million additional families who will be hit this year in 2010 if Congress does not take action.

The reason we are experiencing this large increase this year is that over the last 9 years Congress has passed legislation that would temporarily--and only temporarily--increase the amount of income exempt from the alternative minimum tax. These temporary exemption increases have prevented millions of middle-class American families from falling prey to the alternative minimum tax until right now.

While I have always fought for these temporary exemptions, I believe the AMT ought to be permanently repealed. One reason I have previously given for permanent repeal is that it may be difficult for Congress to revisit the alternative minimum tax on a temporary basis every year. Of course, this current situation, now 6 months into this year, proves me right. Congress has yet to undertake any meaningful action on the alternative minimum tax.

The budget resolution, passed well over a year ago, provided revenue room for a short-term extension of the alternative minimum tax patch. That was a lot less than what President Obama's budget did, which made the patch permanent.

On this point, since too often people think I do not agree with President Obama enough, this is one point where I believe the tax policy of President Obama has it exactly right.

About 18 months ago, much to the criticism of some on the other side, I made the 2009 AMT patch an issue in the economic stimulus legislation. The reason I did is that 24 million middle-class families would have, on average, paid $2,400 more in income taxes for 2009 if the patch had been abandoned. For those 24 million people, paying $2,400 more into the Federal Treasury would have been a real hurt. My 2009 AMT patch amendment was adopted in the stimulus legislation by the Finance Committee. That was 18 months ago.

Despite assurances the AMT relief is an important issue, nothing has actually been put forward as a serious legislative solution this year. Again, we can see the checklist chart. There has been no House committee markup or floor action, no Senate committee markup or floor action. This year is almost half done. A theoretical discussion is not a substitute for real action, to which anyone making a quarterly payment today will attest.

I am hopeful I can get folks on Capitol Hill rethinking about the AMT and realize that it is a real problem right now. Everyone seems to agree that something needs to be done quickly, but the discussion does not go any further than just discussion.

The second quarterly payment is due today. Today taxpayers across the country are under a legal requirement to pay their estimated taxes, and with it the additional money that would be owed because the AMT has not been patched. They would use form 1040-ES. I bet I will be here September 15 when the third payment comes due saying largely the same thing.

Congress does not seem to be under any pressure to actually take action. Many on the other side insist that, unlike new spending proposals or extensions of existing programs, AMT reform should happen only if it is revenue neutral. That means any revenues--I want to put quotes around these words--any revenues ``not collected'' through reform or repeal of the AMT must be offset by new taxes from somewhere else.

Notice I said ``collected,'' and I did not say ``lost.'' This distinction is important for the simple reason that the revenues we do not collect as a result of AMT relief are not, in fact, lost to the Treasury. The AMT collects revenues it was never supposed to collect in the first place. In other words, middle-class income people were not supposed to pay this tax in the first place--that is that 24 million-- because this AMT was originally conceived as a mechanism to ensure that high-income taxpayers were not able to completely eliminate their tax liability. From that standpoint, even the AMT has failed because in 2004, IRS Commissioner Everson told the Finance Committee the same percentage of taxpayers continue to pay no Federal income tax as they did back in 1969. Even I think, on raw numbers, it is a much larger number. Back then it was only 155 taxpayers.

Today, at least 24 million to 26 million middle-class families are in these alternative minimum tax crosshairs. That is quite a change from the 155

rich people in 1969 who were not paying any tax, the reason for the alternative minimum tax to be passed in the first place.

Finally, if we offset revenues not collected as a result of AMT repeal or reform, total Federal revenues over the long term are projected to push through the 30-year historical average and then keep going.

The AMT then is a completely failed policy that is projected to bring in future revenues that it was never designed to collect in the first place.

President Obama met those of us who favor repeal partway by staking out a position on AMT reform during his 2008 campaign. His position provided for a permanent AMT patch. His budgets have maintained that position.

While permanent repeal without offsetting is the best option, we absolutely must do something to protect taxpayers and do it now, even if it involves a temporary solution, such as an increase in the exemption amount.

Of course, if we do that, we are going to be in the same fix next year, and I will be making that same point again.

Today, Tuesday, June 15, 2010, taxpayers making quarterly payments are going to once again discover that the AMT is neither the subject of an academic seminar nor a future problem that we can put off dealing with. The AMT is a real problem right now, and if this Congress is serious about tax fairness, it needs to stand up and take action.

Job Creation

Mr. President, I wish to address the Senate for a minute on another issue about how many jobs the stimulus bill created.

In recent weeks, a number of my colleagues have come to the floor to proclaim the success of the massive $862 billion stimulus bill Congress enacted in 2009. Although the number of private sector jobs has increased by only about half a million since 2009, they continue to insist the stimulus bill has created millions of new jobs. How do they justify these claims?

The stimulus bill requires certain recipients of stimulus funds to report the number of jobs they have created or saved or, more accurately, they report the number of jobs funded with the stimulus dollars.

The stimulus bill also requires the Congressional Budget Office to issue a quarterly report on these numbers. The Congressional Budget Office is careful to point out that the number of jobs being reported by stimulus recipients is not a comprehensive estimate of the economic impact of the stimulus bill. According to the Congressional Budget Office, the actual numbers could be higher or lower.

According to CBO ``estimating the law's overall effects on employment requires a more comprehensive analysis than the recipients' reports provide.''

For this analysis, CBO relies on a computer model. In other words, CBO does not look at the actual jobs data. Instead, it looks at a model of the economy.

CBO is very upfront about all of this. CBO used a computer model to predict how many jobs the stimulus bill would create before it was enacted into law. Now the stimulus bill is, in fact, law, and CBO is using a computer model to tell us it did just what they said it would do--create jobs.

Why would CBO rely on a model instead of actual data? According to CBO--and I have a three- or four-sentence quote here:

Data on actual output and employment are not as helpful in

determining the stimulus bill's economic effects because

isolating those effects would require knowing what path the

economy would have taken in the absence of the law. Because

that path cannot be observed, there is no way to be certain

about how the economy would have performed if the legislation

had not been enacted.

My judgment is that CBO is saying this: CBO doesn't know how much better or worse the economy would have been if the stimulus bill had not been enacted. That means the Congressional Budget Office also doesn't know how much better or worse the economy is now as a result of the stimulus bill. So basically CBO is saying: Trust us--or more specifically: Trust our model. But if the model was wrong to begin with, then wouldn't it still be wrong? According to the Congressional Budget Office, their model relies on historical relationships to determine estimated multipliers for each of several categories of spending and tax provisions in the stimulus bill. The problem is that there is no way to know whether these historical relationships remain constant over time or whether they change under different economic circumstances.

In short, the jobs numbers attributed to the stimulus bill are based on assumptions which may or may not have any basis in reality.

I yield the floor.

Madam President, I opposed the amendment of my friend from Vermont. Although I understand his frustration and his intentions, I could not agree with the effects of the amendment. Over the years, as chairman and ranking member of the Finance Committee, I have supported policy reforms in taxation of oil and gas income. Many times, the major oil firms have registered their objections. Also, in the area of corporate taxation, I pushed hard to curtail a practice that oil firms used to erode the U.S. tax base. That practice, known as corporate inversions, was curtailed in the 2004 FSC-ETI legislation.

I re-doubled my efforts to make the reform applicable to four oil service firms but was rebuffed by the House of Representatives' leadership in the years 2004-2007.

Chairman Baucus and I have been careful to not impair tax incentives for independent, smaller producer oil and gas production. We have differentiated the availability of these incentives for smaller producers and made clear that major oil and gas producers did not receive many of these incentives.

The amendment of my friend from Vermont blurs that line and would adversely affect domestic production. We need to ensure an adequate supply of domestic oil and gas to keep the price at the pump down. Together with incentives for alternative fuels, line ethanol and biodiesel, and conservation, these small producer incentives with hopefully reduce our reliance on imported oil. Chairman Baucus joins me in this view.

For these reasons, I opposed the amendment of my friend from Vermont.

Mr. President, I ask unanimous consent to speak 9 minutes as in morning business.

Mr. President, I wish to address my colleagues about the upcoming judiciary hearing and the nomination of Solicitor Kagan to the Supreme Court. I have always been of the opinion that the Senate needs to conduct a comprehensive and careful review of Supreme Court nominees. It is important that the nominee be given a fair, respectful, and also deliberative process. This is a lifetime appointment to the highest Court in the land, so it is our duty to ensure that the Supreme Court of the United States candidate understands the proper role of the Supreme Court in our system of government, and would be true to the Constitution and the laws as written. We need to be certain that the nominee will not come with an agenda to impose his or her personal political feelings and preferences on the bench.

The Senate needs enough time to adequately review the nominee's record to make these determinations. But because Solicitor Kagan does not have the usual background of being a judge on the Federal or State bench, we have no concrete examples of her judicial philosophy in action. It is critical that we understand whether she has a proper judicial philosophy because Solicitor Kagan is being considered for the Supreme Court. So it is even more important for us to look at her entire record and to give particular weight to her statements and writings as well as the positions she has taken over the years.

In order for the Senate to fulfill its constitutional responsibility of advise and consent, we must get all of her documents from the Clinton Library and have enough time to analyze them so we can determine whether she should be a Justice. I share the concerns of the Judiciary Committee ranking member, Senator Sessions, that Solicitor Kagan's documents will not be fully produced in time for the committee to conduct a thorough review of the nominee's record.

I hope we will receive these materials in time before the Judiciary Committee holds the Kagan hearings. From the materials and documents that we received so far, and which the committee is still reviewing, Solicitor Kagan's record clearly shows she is a political lawyer. In fact, a recent Washington Post article said her papers in the Clinton Library ``show a flair for the political,'' and that she had ``finely tuned . . . political antennae.''

Solicitor Kagan was involved in a number of hot-button issues during President Clinton's second term, including gun rights, welfare reform, partial-birth abortion, and Whitewater. The documents we received from the Clinton Library show that Ms. Kagan

promoted liberal positions and offered analyses and recommendations that often were more political than legal in nature.

Solicitor Kagan's memos from the Marshall papers also indicate a liberal and seemingly outcome-based approach to her legal analysis. So I look forward to asking Solicitor Kagan about her record and her judicial philosophy. But a judge needs to be an independent arbiter, not an advocate or a rubberstamp for a political agenda. We already know that Solicitor Kagan has held far left political views from a young age. She has been a long-time political lawyer, and she is a personal friend of the President.

As Solicitor General, she has been a prominent member of the Obama administration's team. As a nominee to the Supreme Court, Solicitor Kagan has the burden of showing that despite her record as a political lawyer, rather than as a sitting judge or practitioner, if she is confirmed she will apply the law impartially and not as a member of someone's team who is working to achieve their preferred political result.

Moreover, President Obama's standard for picking judicial nominees is one that places a premium on a judge's empathy for certain individuals or groups rather than on an even-handed reading of the law. As a Senator, President Obama lauded judicial nominees who would decide cases based on ``one's deepest values, one's core concerns, one's broader perspectives on how the world works, and the depth and breadth of one's empathy.''

As a Presidential candidate, President Obama said he would appoint judges who have empathy for certain groups. As President he said his judges would have ``a keen understanding of how the law affects the daily lives of the American people.''

The Obama ``empathy'' standard concerns me greatly because the inference is that an empathetic judge will pick winners and losers based on his or her personal preferences rather than the law blindly picking winners and losers.

When President Obama nominated Solicitor Kagan to the Supreme Court, Vice President Biden's chief of staff, who was involved in vetting the Supreme Court of the United States candidates, assured liberals they had nothing to worry about from her selection. In fact, he said Solicitor Kagan was ``clearly a legal progressive.'' Thus, it is safe to assume that the President was true to his promise and picked someone who embodied his empathy standard.

Because Solicitor Kagan does not have one of the best indicators of a Supreme Court nominee's judicial philosophy; that is, a judicial record on a State or Federal bench, then I believe she should be very forthcoming with the Judiciary Committee's inquiries into her judicial philosophy.

In fact, Ms. Kagan herself advocated that a nominee should respond to specific inquires into the nominee's judicial philosophy and positions on constitutional issues.

Solicitor Kagan wrote in her University of Chicago Law Review article, ``Confirmation Messes, Old and New:''

The kind of inquiry that would contribute most to

understanding and evaluating a nomination is . . . discussion

first, of the nominee's broad judicial philosophy and,

second, of her views on particular constitutional issues. By

``judicial philosophy'' . . . I mean such things as the

judge's understanding of the role of courts in our society,

of the nature of and values embodied in our Constitution, and

of the proper tools and techniques of interpretation, both

constitutional and statutory.

She also wrote that a nominee could comment on ``hypothetical cases'' and on general issues such as ``affirmative action or abortion,'' or ``privacy rights, free speech, race and gender discrimination, and so forth.''

Given the fact that Solicitor Kagan has been nominated to a lifetime position on the Nation's highest Court, the Senate must determine that if confirmed, she will interpret the Constitution with judicial restraint and without imposing her personal political policy preferences and biases.

The Senate must determine by examining the totality of her record that if confirmed, she would not be a rubberstamp for the President's political agenda. We will have to see whether Ms. Kagan will live up to her own standard for Supreme Court nominees and whether she will be as forthcoming as she argued Supreme Court of the United States nominees should be in the Senate confirmation process.

So I am going to be pursuing this for my people of Iowa because they are very concerned. I am getting a lot of phone calls both for and against her that have to be taken into consideration.

I yield the floor.

Mr. President, I ask unanimous consent that Steven Weinert of my Finance Committee staff be given the privilege of the floor for the month of June.

Madam President, pursuant to a public letter to Secretary Sebelius dated September 24, 2009, there is a pending objection to unanimous consent requests for the following nominees: Jim Esquea, nominated for HHS Assistant Secretary for Legislation, and Richard Sorian, nominated for HHS Assistant Secretary for Public Affairs. I ask unanimous consent that a public letter dated September 24, 2009, be printed in the Record.

Mr. President, today, our body starts debate on expiring tax and health provisions. Around this Capitol building, the nickname of these items is called extenders. I wish to make a couple of points on the process before I get into the substance of the substitute. My first point will reflect on how much the Democratic leadership has avoided a simpler, clearer, bipartisan approach. My second point will consider all of the other time-sensitive, unfinished tax legislation that appears to be abandoned with only a few weeks left in this session.

My first point deals with a conscious decision to use a partisan process for bipartisan issues. What I find surprising is that we are taking up a package that, like the HIRE Act jobs bill of a few weeks ago, absolutely belongs to the bicameral House and Senate Democratic leadership. It was negotiated between House and Senate Democratic leaders, with some input from their tax-writing committees and staff. These discussions occurred entirely behind closed doors. As far as I know, it was a Democrats-only discussion. It is not a conference agreement, where things are worked out in a sophisticated conference committee made up of people from the House and Senate.

Then, in addition, at the very last minute, the compromise took on the properties of an amoeba. In that amoeba fashion, the House Rules Committee split the bill into two pieces, one dealing with the so- called Medicare doctor fix and the rest of the bill dealing with the balance of that package. Then, under the magic of the House Rules Committee, this amoeba-like bill was reconstituted into one legislative product, and that is the underlying bill Leader Reid has brought before the Senate this very day.

I am relieved to see that it appears the Senate will process extenders in a way that is different from the way the HIRE Act jobs bill was handled. It looks as though we Senators will have a chance to represent our constituents and shape this bill, because Leader Reid has not filled the amendment tree or filed cloture at the start of debate. That is a real relief around this body, where amendment trees have been filled and cloture has been filed.

Back home, folks wonder why it is taking Congress so long to deal with these routine extenders. As an example: As I left church Sunday in Cedar Falls, IA, a person who has investment in a biodiesel plant wants to know when we are going to pass the biodiesel tax credit bill. Most of the tax provisions expired almost a half a year ago, on December 31, 2009. Folks are angry that Congress seems to be dithering, among other things, on the 71 tax provisions. In my State, it is a biodiesel tax credit that always comes up, but people are wondering about the dithering generally. And, of course, we even have physicians across the country being frustrated that this Congress has allowed a 21-percent cut in payments to go into effect again this year. Payment cuts of this magnitude severely impact physicians and health care providers and practitioners throughout the country, and they significantly threaten beneficiary access to care.

Medicare beneficiaries' access to physicians and other needed medical care has been jeopardized this year as never before because Senate Democratic leadership has once again failed to pass an essential physician update in a timely manner. We could have wrapped up this time-sensitive legislative business 4 months ago. We could have taken up a bipartisan package that I put together with my friend, Finance Committee Chairman Baucus of Montana. To be sure, some of the structure in this package reflects the agreement that my friend and I reached. But this package, in terms of the impact on the deficit, is likely several times the size of the package we agreed upon. Virtually all of the additional cost is due to proposals I would not have agreed to in representing my Republican Conference.

I was under the impression that the Senate Democratic leadership was genuine in its desire to work on a bipartisan basis, but clearly I was mistaken. Although the Senate Democratic leadership was highly involved in the development of a bipartisan bill, they arbitrarily decided to replace it with a bill that skews toward their liberal wing. That is why we are where we are this very day. There is a liberal agenda that exalts open-ended deficit hiking, spending, and tax increases, and doing it above everything else. Angry vocal members with that view seem to have dominated the decisionmaking of the Democratic leadership in resolving routine items.

The actions in the House a couple of weeks ago go on to further prove my point. The Senate Republican leaders backed the Baucus-Grassley compromise of last February. To them, it seemed to be a balanced package. It was largely offset, it was leaner than most Democrats wanted, but it was thicker than most Republicans wanted. Republicans preferred a fully offset package using spending cuts; Democrats resisted most spending cut offsets

and wanted many multiples of the level of spending with which Republicans were comfortable. So it is ideal, because this is the way it works most of the time between Senator Baucus and me.

The Baucus-Grassley compromise was a genuine middle ground. But for the liberal core of the Democratic caucus, it was their way or the highway. Leader Reid responded to that pressure and scuttled the Baucus-Grassley compromise. Ironically, almost 4 months later, it looks as though the Democratic caucus is moving closer to the structure of the Baucus-Grassley compromise of last February.

The Senate Republican Conference, seeing the alarming growth in deficits and debt in the intervening 4 months, will press hard for a fully offset package. For those in my conference, several fiscal events--and these all occurring in the intervening 4 months since the Baucus-Grassley bill was scuttled--have been compelling on my side of the aisle viewing this legislation a little bit differently.

The first event is the second opinions we are receiving on the fiscal impact of the health care bill. The Congressional Budget Office has revised the official spending upward.

Mr. President, I ask unanimous consent to have printed in the Record a copy of the CBO's May 11 letter to Congressman Jerry Lewis. The letter is accompanied by two tables that identify explicit authorizations of discretionary funding. These tables are available along with the full text of the letter on the CBO's website at www.cbo.gov.

That letter documents CBO's projections that health reform will result in at least $115 billion in additional spending beyond what was previously included in the total of last March.

In addition, Douglas Elmendorf, Director of the Congressional Budget Office, recently indicated that the landmark health care reform bill would not accomplish its primary fiscal objective of reducing Federal health expenditures.

Dr. Elmendorf made this point in a presentation to the Institute of Medicine on May 26, of this year. The presentation is titled ``Health Costs and the Federal Budget'' and is available on the CBO website as well.

The second event is the record buildup of public debt. Last week, the Federal public debt passed $13 trillion. On that monstrous number, $1 trillion was added in the last year all by itself.

The third event is the continuous mounting of the cost of the stimulus bill. Recent Congressional Budget Office scoring shows that policy, instead

of being roughly $800 billion, is now exceeding $1 trillion.

The fourth event is the fiscal troubles in the country of Greece. Too much spending and public debt has put Greek public finance in a state of distress.

The fifth event is the troubling developments in States with large open-ended social spending programs and already very high income taxes. The people who send us here are also reading these reports and they are rightfully worried about these fiscal troubles. They are sending one message to Washington, and it is as clear as any bell. They are saying: Reverse course on deficits and debt. They say we in Congress ought to restrain ourselves and our policies; pull back on extra spending. Republicans heard that message a while ago, and it looks to me as though Democrats are hearing the same thing.

To sum up at this point, on the first point I have been speaking about--on process--the Democratic leadership, by avoiding a genuine bipartisan compromise, is continuing to take a very long path to resolving this overdue unfinished business. The bipartisan path to succeed was set forth almost 4 months ago--early February--and that was the Baucus-Grassley compromise.

Unfortunately, the tax offsets--largely noncontroversial--were lifted from that compromise and used for something totally unrelated, but to cover the bloated spending in the health care bill. To retain the spirit of that compromise, those offsets would need to be replaced by restraints on spending. Republicans, in our alternative, will show the way to achieve those savings.

As has been the case for the last year and a half, those who pay income tax and those who receive government checks aren't treated similarly.

Even with those revisions, keep in mind on net, the taxpayer is paying at least $40 billion more in this bill. Spending constituents receive almost $100 billion in new spending.

My second process point goes to time-sensitive legislative business that is yet unfinished in terms of revenue and taxpayers affected. The other unfinished tax legislative business dwarfs the measures in this bill now before the Senate.

There are three major policy areas that need to be addressed. I do not know when they are going to be addressed. These three issues are the death tax, the current alternative minimum tax fix--that is an annual process we go through--and, three, the bipartisan 2001 and 2003 tax relief plans. So I want to go into these in some detail.

I have a chart that shows the status of these three policy issues. Let's start with the death tax, or the estate tax, whatever you want to call it. Since the first of the year there has been no death tax. If you died, up to this point, presumably, your estate is going to be tax free. At the end of this year, the death tax then reappears, and not in a very friendly way.

After failing to act for almost 3 years in the majority, the House Democratic leadership put a death tax reform measure before the House last year at the same time it should have been discussed in the Senate. But the Senate has not acted on the House bill.

I might suggest to you that we had to act on that health care bill because it takes effect in 2014, but tax extenders and the estate tax that had to be settled in December were not even discussed.

In Iowa I can tell you that confusion and the anxiety over the uncertain state of the death tax comes up in my town meetings all the time. I would be surprised if other Senators are not hearing the same thing. I got a letter signed by 750 lawyers and accountants in my State saying: How do we advise our clients? What is the estate tax going to be for the future?

It is not a case of just what the tax law is, it is the case of millions of people wanting to plan estates and cannot do it. I refer again to my friend, Chairman Baucus, who was working on a compromise proposal with Senators Lincoln, Kyl, and myself.

Unfortunately, the liberal core of the Senate Democratic caucus seems to prefer no action at all. My friend, the junior Senator from Vermont, has been transparent about his desire to leave the law as it is; in other words, next year only have a million-dollar exemption.

Others feel just as strongly, but perhaps are not as transparent as the junior Senator from Vermont. In any event, the effect of failing to reform current law will be to raise the number of people hit by the death tax by a factor of 10 times. What I am saying is, stalling out a bipartisan reform, which seems to be the liberal core's objective, will likely mean 10 times as many family farmers and small businesses will be hit with the death tax. A reform like the one envisioned by Senators Lincoln and Kyl will mean only the richest 10 percent of dead peoples' estate will face the death tax.

Now I would like to turn to a second major area of unfinished business; that is, the alternative minimum tax fix. This is one of those yearly or biannual things the Congress goes through so that middle-class Americans will not pay a tax that was meant just for the very wealthy. So we are talking about this year's tax fix already.

The law says 30 million Americans, or maybe more accurately 24 million Americans, ought to be paying this income tax right now. The trouble is they do not file until next year, so it gives us a chance to do something about it. But for those filing quarterly, if they are not taking that into consideration they are violating the law.

In the next week, on June 15, the second installment of this year's estimated income tax is due. Last year, 24 million middle-income families were spared from the unfair hit of the alternative minimum tax. The fix meant $2,300 per family. This year those figures are going to go up.

If the law is not changed, all those families will have to pay at least $2,300 more per family. In my State of Iowa, it means at least 124,000 middle-income families will be paying additional income tax that was only meant for the very wealthy.

No bill has been marked up or passed in the House that deals with this problem. Under current law, some of these millions of families should be paying estimated tax next week, June 15.

Finally, let's take a look at the third major area of unfinished tax business. Here we have a chart, and I am referring to the widely applicable rate cuts in family tax relief from the 2001 and 2003 bipartisan tax relief plans.

Virtually every American who pays income tax, and millions more who do not under current law, will have a higher tax bill if we do not extend the 2001 and 2003 bipartisan tax relief bills. For years I have referred to the sunset of these plans as a tax wall. Middle-income families will run right into a very firm wall of tax increases.

For a family of four with an income of $50,000, that tax wall is $2,300. For a single mom with two kids earning $30,000, that tax wall is $1,100. No bill has been marked up or passed in the House that deals with this problem.

You may hear some on the other side say: Too bad about the sunset. They argue that the bipartisan group wrote the tax relief plans with a sunset. The sunset, therefore, is the responsibility of the bipartisan authors of these plans.

If that argument is advanced by members of the current majority, keeping in mind they have had control of Congress for 3\1/2\ years, I wait for that as an opportunity to quickly respond. My response will be to provide a citation of all of the filibusters led by the Democratic leadership on Republican attempts to make all three of these areas of bipartisan tax relief permanent law.

The bill before us has very timely and important measures. In nearly all instances, the expiring tax provisions are treated the same way as they were treated under the Baucus-Grassley agreement of almost 4 months ago, going back to early February.

I thank my friend, the chairman of the committee, Senator Baucus, and the Democratic leadership for holding on to those pieces of the Baucus- Grassley agreement. Especially important is an extension of the biodiesel tax credit because we have thousands of workers--and I have seen the figure of 23,000--who have been idled throughout 44 States of the United States as they have shut down the plants.

So if you really want a jobs bill, reinstate the biodiesel tax credit and you will put thousands of workers in Iowa back to work, and about 23,000 nationally.

Likewise, Iowa companies, such as Rockwell Collins in Cedar Rapids,

As the majority struggles in an attempt to pass another massive deficit spending bill through Congress, biodiesel plants in Iowa and 42 other States continue to lay off workers because the Democratic-controlled Congress has not extended the biodiesel tax credit. This is a simple and noncontroversial tax extension that will likely reinstate more than 20,000 jobs nationwide and about 2,000 jobs in my State of Iowa alone.

These jobs have fallen victim to a tactic used by the Democratic leadership to hold this popular and noncontroversial tax provision hostage to out-of-control deficit spending here in Washington.

This past February I worked out a bipartisan compromise with Chairman Baucus to extend the expired tax provisions, including the biodiesel tax credit. However, the Senate majority leader decided to put partisanship ahead of job security for thousands of workers, and that compromise did not move ahead.

So I am here again to try to put thousands of Americans back to work producing a very clean and renewable fuel. Therefore, I ask unanimous consent to proceed to H.R. 4853; that my substitute, which contains a 1-year extension of the biodiesel and renewable diesel tax credits for all of the year 2010, be agreed to, and the bill, as amended, be read a third time and passed.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I thank my colleague from Oregon for keeping up the fight. We have been at it for a long period of time. There has been a dry spell recently when this has not been a major issue. So we didn't feel, when there wasn't an interest in getting rid of secrecy within the Senate, like bringing this up. But now there is all this concern about what is going on with so many holds in the Senate--either bills or nominations--and that it is influencing the productivity of the Senate.

There has been a lot of discussion on the floor of the Senate about this issue, so the opportunity is ripe once again. This is the fourth or fifth time in the last couple weeks we have been at it. I thank my colleague from Oregon for keeping up the fight. I am glad to work with him as a Republican, and a lot of other Republicans who support this effort of making the public's business more public, the Senate's business more public.

Senator Wyden went into the details of the legislation, so I am not going to repeat that. But I want people to know that, from my side of the aisle, he has given an accurate representation, through his explanation, of the intent of our amendment. Without repeating that, I have made it a practice for a long period of time--I don't know, it has been 10 or 12 years--that when I put a hold on a bill or put a hold on a nomination, I have put a statement in the public record so that they know the Senator from Iowa has done this and my reason for doing it.

I want to tell my colleagues who think we ought to maintain the adjective before the word ``hold,'' it hasn't done any harm to me. There has been no retribution because of it. It has given people on a different side of the fence on the issue that I am--with my having a hold on--the opportunity to know it is me, and they can come to me for whatever reasons they want, and see whatever arrangements we can make, or whatever compromises were necessary to move things along; and they knew it was this Senator from Iowa and my rationale behind it. It gives us an opportunity to work out differences. That is what the Senate, being a deliberative body, is all about.

On the other hand, when this Senator from Iowa finds that somebody puts a hold on a nominee or a bill I have an interest in, and it is secret, then this Senator can't go to the other Senator and say, what is the problem? What can we do to work out our differences? Then that impedes the deliberative work of the Senate.

We feel there is nothing wrong with the process of a hold, except for the adjective ``secret,'' which can legitimately be put in front of the word ``hold.'' We want to preserve the deliberative aspect of the Senate. We don't want anybody to pull a quick one on anybody. The hold prevents that from happening. But we ought to know who you are and why you are doing it.

This legislation the Senator from Oregon and I have put forth will do exactly that. It is all about transparency and, with transparency, I think you get accountability. That is what representative government is all about--accountability. The public ought to have a right to know where Senators take a stand. This legislation will permit that.

In the final analysis, if you are a Senator who has guts enough to put a hold on a bill, you ought to have guts enough to let us know who you are. I hope that from now on the word ``secret'' is never anything that is used in the Senate except on things dealing with privacy or national security. Beyond that, the other 99.5 percent of the Senate's business ought to be totally open to the public.

I yield the floor.

Mr. President, I find myself agreeing with the Senator from South Carolina. I find myself agreeing--I am glad my colleague Senator Wyden also agrees. I raise this point, and I raise it for a point of discussion and consideration, not to challenge the purpose of the Senator from South Carolina.

It seems to me that if we all agree the Wyden-Grassley amendment is a good approach and at least Senator Wyden and I and Senator McCaskill and Senator Coburn and Senator DeMint believe the McCaskill-Coburn measure is a good measure, why would you want to hold up the Grassley- Wyden amendment? Is there a feeling that maybe the McCaskill-Coburn measure cannot rise and fall on its own? Then I think you might leave the impression that there is some subterfuge to see that the Wyden- Grassley bill does not get adopted.

Since there is a consensus on all these points, I think we ought to be able to move forward in a separate way and not use one good idea to leverage another good idea because if they are both good ideas, they can stand on their own. In the process, we do not have to then raise any questions about the legitimacy of the second idea, which would be the McCaskill-Coburn idea on reading legislation and making sure we have a score and making sure it is brought up in an environment where there is not secrecy. Again, what I said about secrecy in this body, it should only affect national security and people's personal privacy. Everything else ought to be the public's business. It is the public's business, and it ought to be public.

I raise the point that each item ought to stand by itself and that the five of us--and there are more than five of us, but at least on the Wyden-Grassley amendment, there seem to be at

least three people in this body speaking this morning who think it ought to move forward, and there are at least three in this body, plus two others who are not here, McCaskill and Coburn, who feel the other idea ought to move forward. We ought to move forward separately with the help of everybody involved.

I yield the floor.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.