Middle Class Tax Relief And Job Creation Act Of 2011
Mr. Speaker, while I support comprehensive tax reform, I do not support the flawed legislation presently before us. I have repeatedly said it is long past time to close tax loopholes, end the practice of tax earmarks and lower tax rates on…
Mr. Speaker, while I support comprehensive tax reform, I do not support the flawed legislation presently before us. I have repeatedly said it is long past time to close tax loopholes, end the practice of tax earmarks and lower tax rates on American families and employers. I support a long-term ``doc fix'' to ensure that doctors continue to accept Medicare patients. I support the Keystone XL pipeline and efforts to reform unemployment insurance, all of which are included in this bill. However, these are not the central issues of the legislation we are considering today.
The issue today, as defined by both political parties and the president, is whether or not a temporary--and costly--one-year payroll tax ``holiday'' should expire at the end of the month. The real issue is whether it is responsible for Washington to further shortchange the Social Security Trust Fund at a time when it is already on an unsustainable path.
This ``holiday'' is a raid on Social Security, which is already going broke. Social Security is unique because it is paid for through a dedicated tax on workers who will receive future benefits. The money paid today funds benefits for existing retirees, and ensures future benefits. Because you pay now, a future retiree will pay your benefits. That is why, until last year, this revenue stream was considered sacrosanct by both political parties.
Raw facts demonstrate that Social Security is on an unsustainable path. Today's medical breakthroughs were simply not envisioned when the system was created in 1935. For example, in 1950, the average American lived for 68 years and 16 workers supported one retiree. Today, the average life expectancy is 78 and three workers support one retiree. Three and a half million people received Social Security in 1950; 55 million receive it today. Every day since January 1, 2011, over 10,000 baby-boomers turned 65. This trend will continue every day for the next 19 years. Do these numbers sound sustainable to anyone?
I recently asked a group of McLean High School students and a group of young James Madison University alumni whether they believed that they would receive Social Security benefits when they retire. Not one hand was raised. Not a single one.
The Social Security Actuary has said that by 2037 the trust fund will be unable to pay full benefits. When this time is reached, everyone
will receive an across the board cut of 22 percent, regardless of how much money they paid into the system.
Let me repeat. Under our current path, within 15 years all Social Security benefits will be cut by 22 percent.
Granting another tax holiday is unwise. It puts the existing benefits of those 55 million Americans who currently receive Social Security at risk to continue a failed ``stimulus'' policy.
Last December, when unemployment stood at 9.4 percent, the president touted the ``holiday'' as a one-year measure that would help cure our economic ills and would spur economic growth.
Yet here we are again. After spending most of the year above 9 percent, unemployment has dropped to 8.6 percent. But that belies the primary driver of this change: 315,000 Americans simply stopped looking for work. Nobody can say with a straight face that the payroll tax ``holiday'' has had a meaningful impact on the unemployment rate, nor would it if extended for another year.
Does it make sense that everyone, regardless of income, will get money from this ``stimulus?'' Does anyone think that Warren Buffet changed his buying habits as a result of this temporary suspension? Or General Electric's CEO, Jeffery Immelt, who is also head of President Obama's Council on Jobs and Competitiveness?
I opposed the legislation creating the Social Security tax ``holiday'' last year for similar reasons. I just cannot support an extension that further compromises the stability of the Social Security Trust Fund.
Real structural reforms are needed to stabilize Social Security. Past experience shows that Congress will spend the next 10 years figuring out how to spend the money designated as offsets for today's bill on other projects. It won't be used to pay for the bill. Knowing this, I cannot in good faith support a measure to raid the trust fund without comprehensive reform to the system.
The expiring payroll tax ``holiday'' is costing Americans $112 billion. To pay for it, we are borrowing money from nations such as China, which is spying on us, where human rights are an afterthought, and Catholic bishops, Protestant ministers and Tibetan monks are jailed for practicing their faith, and oil-exporting countries such as Saudi Arabia, which funded the radical madrasahs on the Afghan-Pakistan border resulting in the rise of the Taliban and al Qaeda.
Our national debt is over $15 trillion. It is projected to reach $17 trillion next year and $21 trillion in 2021. We have annual deficits of approximately $1 trillion. We have unfunded obligations and liabilities of $62 trillion.
We all know what needs to be done and that is why I have supported every serious effort to resolve this crisis, including the Bowles- Simpson recommendations, the Ryan Budget, the ``Gang of Six,'' the ``Cut, Cap and Balance'' plan and the Budget Control Act.
I also was among the bipartisan group of 103 members of Congress who urged the supercommittee to ``go big'' and identify $4 trillion in savings. I voted for the Balanced Budget Amendment to the Constitution, which would have established critical institutional reforms to ensure that the Federal Government lives within its means. In addition, since 2006, I have introduced my own bipartisan legislation, the SAFE Commission, multiple times.
While none of these solutions were perfect, they all took the necessary steps to rebuild and protect our economy. In order to solve this problem, everything must be on the table for consideration--all entitlement spending, all domestic discretionary spending, including defense spending, and tax reform, particularly changes to make the tax code more simple and fair and to end the practice of tax earmarks that cost hundreds of billions of dollars.
Because the extension of the payroll tax ``holiday'' is not part of a comprehensive tax and entitlement reform package, it ignores the bigger picture: everything must be on the table to enact sweeping reforms to right our fiscal ship of state.
Does anyone really think that this will only be a one-year extension? I suspect that at this time next year Congress will once again be considering another costly extension. And what will happen the year after that?
If past precedent holds, the 10-year price tag of this ``holiday'' will come to about $1.2 trillion. The supercommittee was unable to agree to any deficit reduction plan, let alone their $1.2 trillion goal. The consequences of this failure will be severe.
Air Force Chief of Staff General Norton Schwartz said that the coming across-the-board cuts to our defense capabilities, as a result of the supercommittee's failure, are akin to having major surgery performed by a plumber. The Commonwealth of Virginia will feel particular pain from these defense cuts. Bloomberg Government reported that Virginia is the number one recipient of defense spending.
How will the Congress pay for this extended tax cut and still make the needed cuts to our deficit and debt?
I feel as if Washington exists in a parallel universe. After months of passionately debating the importance of reducing the debt, the president and Congress are now using all the ``easy'' and ``quick'' offsets to extend a one-year temporary tax break that's barely, if at all, improved the economic indicators.
Senator Tom Coburn recently said that ``the question the American people ought to ask is where is the backbone in Washington to actually pay for these extensions in the year the money's spent.'' I think it's clear that the backbone doesn't exist.
Leadership starts at the top, and the president has repeatedly failed to address our Nation's deficit. Earlier this month, the president drew a line in the sand and said Congress shouldn't go home until the payroll holiday is extended.
He has not drawn that line for the doc fix, which is necessary to ensure that doctors will accept Medicare patients.
He has not done that for unemployment benefits.
He has done the opposite on the Keystone XL pipeline, postponing the decision for yet another year, until after the next election.
Above all, he has not drawn a line in the sand for a comprehensive deficit reduction plan. In fact, he has spent most of the year running from serious deficit reduction efforts, including the one proposed by his own fiscal commission. He has not proposed significant changes to entitlement programs or embraced comprehensive tax reform.
We need look no further than the riots in Europe to see the destructive impact that results from the crushing reality of a government unable to deliver promised entitlements to its citizens. There have been riots in Belgium, Spain, France, Ireland, England, Italy, Latvia, and Greece. And yet we are considering a proposal that moves us closer to Europe's instability.
Instead of using these bipartisan offsets to pay down our deficit, we're increasing spending and using these offsets to maintain our unacceptable levels of debt. The American people should be deeply troubled that Congress and the president cannot find any bipartisan agreement to save our country, but they can still come together to increase spending and shortchange Social Security. There is something fundamentally wrong with this picture.
Compounding my belief that the tax ``holiday'' will not be fully paid for, I do not agree with some of the offset measures that have been included, absent comprehensive reform.
Some would have the one-year tax ``holiday'' financed through a long- term, structural attack on federal employees. Federal employees work side-by-side on the front lines with our military personnel fighting the Global War on Terror in locations such as Iraq and Afghanistan. They put their lives at risk daily to defend our national interests.
The first American killed in Afghanistan, Mike Spann, was a CIA agent and a constituent from my congressional district. CIA, FBI, DEA agents, and State Department employees are serving side-by-side with our military in the fight against the Taliban. Border Patrol and Immigration and Customs Enforcement agents are working to stop the flow of illegal immigrants and drugs across our borders.
The medical researchers at NIH working to develop cures for cancer, diabetes, Alzheimer's and autism are all dedicated federal employees. Dr. Francis Collins, the physician who mapped the human genome and serves as director of the National Institutes of Health, is a federal employee.
The National Weather Service meteorologist, who tracks hurricanes, and the FDA inspector working to stop a salmonella outbreak, are federal employees. The ATF agents who were in Blacksburg immediately following last week's shooting are federal employees. These are but a few examples of the vital jobs performed by federal employees.
We can't balance the budget through discretionary cuts alone. We have to address the spiraling costs of entitlements, because, to paraphrase the infamous bank robber Willie Sutton, that's where the money is. If you care about cancer research, if you care about national defense, if you care about road improvements or if you care about the poor, you should care about entitlement reform. We must reform these programs to preserve them for future generations. Otherwise, they will be made unrecognizable through forced, significant cuts or eliminated altogether.
Last December, the leaders of the president's bipartisan fiscal commission, Erskine Bowles and former Senator Alan Simpson, wrote to the president and leaders of Congress, ``Our growing national debt poses a dire threat to this nation's future. Ever since the economic downturn, Americans have had to make tough choices about how to make ends meet. Now it's time for leaders in Washington to do the same.''
Mr. Speaker, I cannot support this measure and will vote ``no'' as I did last December.
Let's put these offsets towards real deficit reduction and move forward with serious efforts to deal with our unsustainable spending.