Floor Statements

Madam President, I come to the floor to talk about the debt crisis facing this country and the opportunity we have to address this issue in a way that balances the budget and ensures the long-term fiscal solvency for future generations.

The recent fiscal cliff agreement which enacted tax relief for 99 percent of Americans addressed the revenue side of the equation. But as everyone knows, revenue increases alone are not going to solve the debt crisis. In fact, the tax increases that went into effect as a part of the fiscal cliff deal generate enough revenue over the next 10 years-- and I should say if we annualize that over the next year--to fund the government for less than 1 week next year. So all the talk about the higher revenues and what that will do to address our long-term fiscal solvency and what it will do to address the deficit, if we think about it in those terms, it puts into perspective what the real problem is.

We have a debate in this city and in the Congress all the time about whether we can address the huge debt we have in front of us--the trillion-dollar annual deficits--by raising taxes on the so-called rich and people in the higher income categories. That was done. That was done as part of the fiscal cliff negotiations that occurred. Remember, those taxes were all scheduled to go up. They were scheduled to go up on everybody--anybody who had income tax liability on January 1. Because of the agreement that was reached, we were able to protect 99-- in my case in South Dakota more than 99--percent of taxpayers from those tax increases. That being said, there are those in the higher income categories and some businesses that will see higher taxes as a result of that. But those higher taxes represent enough revenue next year to fund the Federal Government for less than 1 week.

The question before us is, What do we do for the other 358 days of the year? That is what we have to start talking about, the real problem: What truly affects and afflicts Washington and our fiscal situation for the foreseeable future and for the long-term future; that is, government spending.

The reality is the Federal Government doesn't tax too little; it spends too much. Over the past 4 years, the deficit has exceeded $1 trillion each

year. The long-term outlook is even worse. This country faces unsustainable fiscal imbalances largely because of entitlement programs such as Social Security and Medicare that have not been reformed in a way that aligns our current demographics with the needs of these programs, which must be done if we are going to save and protect these programs for future generations.

Entitlement spending is the largest driver of our national debt over the long term. While it is true Federal revenues as a percentage of GDP have declined over the past few years, this was true because of the great recession, not because tax rates were too low. The average ratio of Federal revenue to GDP over the past 40 years has been roughly in the 18-percent range. Based on Congressional Budget Office data, it is expected that Federal revenues will exceed their historical averages within the next 10 years and remain there for the foreseeable future, even without additional tax increases.

I wish to illustrate with this chart which I think tells the story. We always talk about a picture telling a story in exchange for a thousand words. I can talk a lot about this, but I think this visually illustrates it perhaps as well as anything.

If we look at the green part, that represents Federal revenue historically, and this goes back to 1980. If we took this chart back to literally the 1970s, late 1960s, we would find, I think over that time period, the revenues stayed pretty static. They go up and down a little bit based on what is happening in the economy, and of course we have a downturn in the 2007 and 2008 timeframe, but revenues are starting to climb back up to that historical average. So it is about, give or take, 18 percent of GDP. That is what historical revenues are.

The black strip, which may be perhaps hard to see, is what was enacted in the fiscal cliff negotiation. Those are enacted tax increases that will add a little bit to the total as we project out. This chart takes us out literally to 2040.

The purple represents the additional taxes the President would like to get. If the President got everything he wanted in the form of taxes, the revenue picture would be about right here. Again, this takes us from where we are today out to about 2040. As we can see, even if the President got all the tax increases he wanted, represented by this line right here, it still doesn't come anywhere close to dealing with the spending that is going to explode in the outyears if we don't do something to rein that in by reforming many of these programs I just mentioned.

If we are going to save and protect Social Security and Medicare for future generations, we have to reform those programs in a way that doesn't create this huge red line that spikes into the future and literally bankrupts the country. In fact, Social Security ran a cash deficit in 2010. Medicare, we are told by the actuaries, will be insolvent by the year 2024. In fact, in the hospital portion of the Medicare trust fund, we are told it may be insolvent by the year 2016. These are important dates to remember because those are the dates at which the revenue coming in from the payroll taxes that support Social Security and Medicare no longer pay for the benefits paid out to beneficiaries.

We have this sort of train wreck coming. We know what drives Federal spending are these entitlement programs. What we call mandatory spending in the Federal budget is about 60 percent now of all Federal spending, largely imposed by Social Security, Medicare, and Medicaid. We have this crisis looming. We see the way this thing just starts exploding in the outyears because of the demographics of the country. We have more baby boomers who are reaching retirement age, people living longer--all good things--but we have to align those programs with the demographics of this country and today they are not. Today we are headed on a path that will take us toward a fiscal train wreck unless we do something about that.

I think it is important to point out the reason we are where we are, the reason we are running nearly $1 trillion deficits or north of $1 trillion deficits every single year for the past 4 years is because spending has increased dramatically over that timeframe. Again, just to put that into perspective, before the great recession in 2007, the Federal Government was generating about $2.5 trillion annually in tax revenue. At that time, the government was spending about $2.7 trillion each year. So we had somewhere on the order of a couple hundred billion dollars in annual deficits.

As I said, revenues dropped off a little bit from that period in 2008 in the financial meltdown, but those have started to pop back up to a more historic and traditional level. So now revenues are back up to roughly that $2.5 trillion annual range. What has changed over that same period of time, between 2007 and 2012, is the amount the Federal Government spends annually.

I just mentioned that in 2007 the Federal Government spent $2.7 trillion. We are now at the end of fiscal year 2012, which ended on September 30 of this year, and the Federal Government spent $3.5 trillion. We saw almost a $1 trillion increase in spending over that 5- year period at a time when revenues have stayed somewhat static, although they dipped into recession, but now they have come back, as I said, to that more historic level.

Essentially, what is driving these deficits is the massive runup in spending. What caused them? We had a stimulus program that was going to be one-time spending, much of which I think has gotten factored into the baseline. Eventually, we are going to have with the new health care mandates enormous amounts of new spending associated with that, which I think is going to make this picture much worse than it looks already. But my point is we have a fiscal crisis in this country which needs to be addressed. We have been kicking that can down the road for way too long and we have run out of road.

The Congressional Budget Office has made it abundantly clear that in each of their assessments of our fiscal situation as a country, most recently in November of 2012, a couple months ago, they said the following:

With the population aging and health care costs per person

likely to keep growing faster than the economy, the United

States cannot sustain the Federal spending programs that are

now in place.

That is from the CBO. They track this stuff on a daily basis for us.

We have a real challenge ahead of us. We have a major problem. I would argue, again, this is predominantly a spending problem, and I think it is illustrated, again, by this chart. When we look at government revenues, it is a fairly flat line. Even with the ups and downs in the economy, it averages about 18 percent of revenue. Actually, without any changes in the baseline, I think it ends up at about 18.6 percent of revenue a decade from now. But what we see is spending, which historically has been in the 20- to 25-percent range if we go back over the past 40 years, is going to explode. The spike we see right here is why we have a fiscal crisis on our hands and why it is so important we act to rein in out-of-control Federal spending.

I suggest to my colleagues in the Senate, as I have for a long time, that where this starts is with passing a budget. We have to go back a long time now. I mentioned this the other day, but the last time the Senate passed a budget the iPad didn't even exist. Most of us now take iPads for granted. Many Americans--not all but some Americans--have iPads. They came on the scene around April of 2010. There hasn't been a budget passed in the Senate since April of 2009.

We are going on 4 years and now 1,360-some days since the last time the Senate acted on a budget. That is irresponsible. It is especially irresponsible in light of this problem. We have a responsibility to the taxpayers of this country, as stewards of their tax dollars, to do what we can to ensure that we are putting the fiscal house of this country in order in a way that will ensure that future generations of Americans have at least as good, if not better, standard of living and quality of life than what the generation that came before us had.

That is not going to happen because we are piling on the backs of future generations enormous amounts of debt. In fact, the $16.4 trillion in debt the Nation has today, if you break that down an on an individual basis, that is about $53,000 for every man, woman,

and child in America. That is what every individual owes, every individual in this country owes of that $16.4 trillion in debt. That is not fair to future generations.

It is up to us as leaders to look at these things and make decisions today that are in the best interests of future generations. I think it has been sort of a tradition in this country, a heritage, if you will, for one generation of Americans to sacrifice so that the future generation, the next generation of Americans may have a better life, a better standard of living, a better quality of life.

That is certainly something that is true where I come from in South Dakota and where the Chair comes from in North Dakota. We represent people who understand that you sacrifice so that the next generation and those who come after you have a better life than you had.

If we don't change the way we are doing things, this next generation will be the first generation of Americans where that is not true. Literally, they will have a lower standard of living and a lower quality of life than what we experienced because we weren't willing to live within our means. This is because we continued to spend money we didn't have, we continued to borrow money from China, and we will hand the bill to future generations.

It is unconscionable, given this picture--and, again, a picture speaks a thousand words--that we haven't done a budget in the Senate in the last 4 years. There is always a blame game played in Washington, DC, and I understand that both sides have contributed over the years. When my party was in charge of the Congress we spent too much. Obviously, since that time, since we have been out of the majority in Congress the numbers have increased dramatically.

If you look at the amount of debt we piled up just in the last 4 years under the current administration, it is about $6 trillion that we have added to the debt in that amount of time. The spending is exploding. The tax revenues are staying fairly steady over time, as I have pointed out with this particular graphic.

One thing we know for certain is that raising taxes doesn't solve the problem. If the President got everything he wanted in terms of additional tax increases, and that would be this purple line right here, it doesn't come anywhere close to addressing the amount of spending we have already put on the books. We are going to have to borrow to pay and hand that bill to future generations. You can only do that for so long. It is high time that the Senate got on board and started doing the budget.

I served on the Budget Committee for the last 2 years. I had hoped that being on the Budget Committee would be a place where a lot of big debates would occur about how to deal with these big fiscal issues that are facing our country. I turned out to be wrong. We didn't do a budget, we didn't mark up one, we didn't put one on the floor of the Senate. We didn't vote, we didn't have amendments, and we didn't do anything to address this fiscal crisis. To be fair, the House of Representatives, every single year, on time, has passed a budget.

The President of the United States, who needs to be a party to this, is the only 1 of 307 million Americans who can sign a bill into law, can engage the American public and the Congress in a way that would address this. The budgets he submitted to the Congress, when they have been voted on in the Senate and the House, haven't received a single vote, not a single vote. Neither Republicans or Democrats in the House or the Senate have voted for the budgets the President has submitted.

Why? Because they are not serious. The President hasn't taken this issue seriously. Neither has the majority in the Senate, where we haven't had a budget now for 4 consecutive years.

It is high time that changed. I hope it will. I am encouraged, actually, by what I have been hearing from my colleagues. This year, perhaps now, finally, after 4 years, we will actually do a budget. We may put a plan in place for how we are going to address this fiscal crisis, this amount of spending that is going to bankrupt the country unless we take steps to avert it.

There are lots of ideas out there. It is not like we don't know what the issues are, like we don't know what the problems are. We do. There have been many bipartisan commissions that have studied this and have examined it thoroughly, that have all come to the same conclusion with regard to what the various problems are--and, frankly, for that matter, what the solutions are.

My colleague, Senator Hatch, was down here earlier this morning talking about some of those suggestions. Many of those suggestions, as I have said, have come from bipartisan commissions. We know if we do nothing, we are going to bankrupt the country and ensure that the programs that many Americans rely on today are not going to be available to future generations of Americans.

I would hope this is the year in which we do a budget, and this is the year in which the President engages in this discussion in a meaningful way that allows us to put in place a path that will avert what is going to be a major crisis. The problem is not that we tax too little, it is that we spend too much.

Madam President, I yield the floor.

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

Mr. President, we are at the last hour, if you will, the last day for sure, in dealing with what has become probably the biggest fiscal crisis our country has dealt with in some time. I have heard a number of my colleagues from the other side come down and talk about the importance of getting a solution. We all want to get a solution. We do not want to have a situation tomorrow where tax rates go up on everybody across this country who has an income tax liability. We obviously do not want to see our defense have to deal with what would be deep cuts in our national security budget. Those are two things that will happen tomorrow unless Congress can act to prevent that.

So count me among those who want to see a solution. I certainly hope the negotiations that are occurring right now can conclude in a way that will give us an outcome that prevents those tax rates from increasing on Americans across this country and also put in place some things that would actually deal with the real problem. The real problem is our country spends too much.

We are where we are because we have not done our work when we should have previously. Think about the fact that for 3 consecutive years--3 years in a row--in the Senate, we have not passed a budget. We spend $3.5 trillion of American taxpayer money every single year, and for 3 consecutive years we have not had a budget. The majority leader and the chairman of the Budget Committee and others on the other side have said: We passed a budget control act in August of 2011 and that sort of serves as our budget.

Frankly, that is not the case. The law requires us to pass a budget. We have a budget act, enacted back in the 1970s, that requires the Congress, on an annual basis, to lay out a plan for how we are going to spend the American taxpayers' money. The reason we ended up with a budget control act back in August of 2011 is because we failed to pass a budget earlier in the year.

For 3 consecutive years in the Senate we have not passed a budget. That is not to say our colleagues on the other side of the Capitol--the House of Representatives--have not acted responsibly. You may disagree with how they did it, but at least they did it. They passed a budget. The Senate, of course, has not for now 3 consecutive years.

So we went through this entire year. Everybody knew this was coming. This is not a surprise. This is the most forecast and foretold disaster we have ever seen. As we approached December 31 and the deadline we are dealing with today, we knew that starting January 1 taxes were going to go up on all Americans, at least all Americans who have an income tax liability, and we knew these cuts that were put in place in the Budget Control Act in August of 2011 were going to occur.

There should not be any element of surprise. We have known about this for a long time. Yet for month after month after month after month this year, nothing was done about it. I say nothing in the Senate; again, the House of Representatives, early this year--last summer--passed legislation that would extend the tax rates for everybody for 1 year. They passed legislation that would replace the across-the-board cuts that will start to take effect on January 2 with responsible spending reductions that actually do something to bend the curve of all these runaway programs, entitlement costs that are going to bankrupt this country in future years. They made some necessary reforms. Again, people may not agree with them. Obviously, there should be a process where in the Senate we have an opportunity to vote on a budget and make amendments. Perhaps we would do it a different way. I might have voted for something entirely different. But the point is, I did not have anything to vote for. Nobody over here did.

We have been here for a whole year, and now we have people coming up and saying: Gee, I hope, I truly wish these negotiations will get us to an outcome. It is December 31. January 1 is tomorrow. It will be 2013. Taxes will go up. Everybody agrees it will be a disaster for the economy. We cannot allow that to happen. It will ruin the economy.

Where were we? Where were we for the past month and the month before that and the month before that, dealing with what we knew was going to be this very set of circumstances we face today?

I find it very hard to sit and listen to people come up now and wring their hands and talk about: Gee whiz, I hope we can get something done in the last day--as we put two people together basically to resolve this.

There was a discussion--in fact, everybody says: Well, you know, the people who are getting together--it was the President and the Speaker at one time; it was Senator McConnell and Senator Reid at one time; now it is Senator McConnell and Vice President Biden--but up until Friday, Senator McConnell, the Republican leader, had not been consulted, had not been advised, had not been involved in any of this. So he gets the call at the last minute to try and come in and sort of rescue this, starts a negotiation that goes over the weekend, and then Saturday night makes a proposal to the Senate Democrats, and was told: We will react to your proposal by 10 o'clock Sunday morning. Ten o'clock Sunday morning passes, 11 o'clock, noon, 1 o'clock, 2 o'clock. He comes to the floor and says: We have not heard back. Then the majority leader comes up and says: Look, we do not have a counteroffer. We do not have a proposal.

So Senator McConnell then gets on the phone with Vice President Biden, and that is now where those discussions are occurring. They are occurring between Vice President Biden and Senator McConnell.

But my point is this: There are two people in a room deciding incredibly consequential issues for this country, while 99 other Senators and 435 Members of the House of Representatives--elected by their constituencies to come to Washington and to represent them--are on the sidelines.

Why didn't we have a bill on the floor of the Senate we could actually debate? Why didn't we put something out here under regular order, open it, allow Senators to offer amendments, allow them to have amendments voted on? I might not have liked that outcome. Maybe I would not have. Maybe I could not have voted for the final product. But at least we would have had an opportunity to debate this, instead of waiting now until the eleventh hour, where two people are gathered in a private room, trying to negotiate something that has enormous consequences for this country and for our economy.

We are where we are because this process was grossly mismanaged up until this point. So now we are faced with a crisis. There is great drama. If we listen to all the TV stations--at least those that cover what is going on here--they are all talking about the fiscal cliff. Instead of a countdown to the new year, we have a countdown to when we hit the fiscal cliff.

What does that say? It is the most predictable financial crisis we have ever known about. We have known about it for months. We have known about it since the temporary tax provisions were put in place 2 years ago. Yet here we are in the eleventh hour on the final day trying to negotiate with two people in a room making decisions that will have a profound impact on the future of this country.

I have to say that as I think about those negotiations that are going on,

most of what is being talked about is who will pay more in taxes. It is not a question of if, it is who is going to pay more in taxes. The ironic thing about it is that in those discussions--at least to my knowledge of them--there is very little being discussed, if anything, that deals with how this country is going to figure out a way to spend less, which is the problem.

OK, I mean, let's face it, Washington, DC, does not have a taxing problem, we have a spending problem. Now, Republicans have said and we are willing to consider, contemplate this idea of having more revenues in the equation. Granted, the President won an election and there is a majority of Democrats here in the Senate. That is their view. Obviously, we have a Republican House of Representatives that has a different point of view about how to solve this and is trying to do it by extending the rates for everybody so that nobody has their rates go up in the middle of a weak economy. There is a big difference of opinion about how to resolve this.

But I would argue to my colleagues on both sides that if what comes out of these discussions is something that raises additional revenue, that raises taxes on people in this country, it will not do anything to solve the problem. In fact, if you give the President of the United States everything he wants in terms of tax increases, you will raise enough revenue next year to fund the Federal Government for less than a single week. So what do we do for the other 358 days of the year? A single week--that is what all of these tax increases would amount to in terms of additional revenue.

This is not a revenue problem. This is a spending problem that can only be solved by having the political courage to confront the challenges that face this country, not just in the near term but in the long term, and get us on a sustainable fiscal path. That means we have to confront runaway spending and programs that, if not reformed, are going to bankrupt this country and saddle our children and grandchildren with an unbelievable burden of debt and a lower standard, a lower quality of life than anything we or any previous generation-- well, not any previous generation but certainly our generation has experienced.

That is where we are today. We are talking about how much taxes are going to go up. And those taxes are going to hit people who create jobs. If you use the $250,000 level, there are about 1 million small businesses that will be impacted by these tax increases, and they employ 25 percent of the American workforce. So we have a lot of middle-class Americans whose jobs depend on the very small businesses that are going to see their taxes go up. This will impact middle- income, middle-class families in this country if taxes go up on small businesses.

If that level is raised to $400,000, it will affect fewer, obviously. If it is raised to 500,000, it will affect even fewer small businesses. But the point simply is this: You are hitting literally hundreds of thousands of small businesses that create millions of jobs for middle- class Americans with new taxes they will be paying, and that can't do anything but hurt the very economy we all say we want to get back on its feet.

So we are talking about tax increases at a time we ought to be talking about spending. Why do I say that? Well, if we go back to 2007, before the recession, the revenues coming into the Federal Government were about $2\1/2\ trillion give or take, round numbers, about $2\1/2\ trillion. Well, this year revenues coming into the Federal Government are going to be back to about $2\1/2\ trillion.

We went through a terrible recession. People call it the great recession. It had a profound impact on the economy--obviously a lot less economic growth, and a recession leads to lower government revenues. So we had a period where government revenues dropped. Well, government revenues are now back to where they were in 2007.

Spending in 2007 was about $2.7 trillion. Today it is more than $3\1/ 2\ trillion. So spending has increased by almost $1 trillion--almost $1 trillion in the last 5 years, at a time when the revenues have stayed relatively flat. But the point simply is this: The reason we are running a trillion-dollar deficit this year and the year after that and the year after that is because the spending of the Federal Government has exploded in the last 5 years. So this is not a revenue problem. The revenues are essentially the same as they were 5 years ago.

Arguably, people would say that if we have a growing economy, we ought to get more revenue. And we would if we had a growing economy. The goal ought to be to get the economy growing again in a more robust fashion so that we are generating additional revenues coming into the Federal Government that would make these problems, the dimensions of those problems look smaller by comparison. That is why policies that hurt the economy, that slow economic growth--and everybody concludes that raising taxes in the middle of a weak economy is a bad idea if you are interested in generating more economic growth and creating jobs. That, to me, seems to be just intuitive. I think everybody would agree with that, but certainly it is a well-known, documented fact among economists that if you raise taxes, you are going to have lower economic growth, you are going to reduce the rate at which the economy grows and expands and therefore allows for job creation in this country.

The best thing we can go to is to get the economy growing and expanding again, and then all of these problems look much smaller by comparison. That means having policies in place that allow small businesses to do what they do best, and that is to create jobs, that provide incentives to invest and to hire people. When you operate in a period of economic uncertainty like we have today with these uncertain tax rates, where you have tax rates that are going to go up, regulatory burdens that continue to go up, you constantly make it more expensive and more difficult for small businesses to create jobs. Creating jobs and growing the economy ought to be our goal. That is so counterintuitive, to think that raising taxes would somehow accomplish that goal.

So as we sit here on the last day before these tax rates go up, as we try to scramble now at the last minute to find a resolution, I would simply say and urge my colleagues that we not let this happen again, that we not be here next year or the year after waiting while two people sit in a room and try to cut a deal that most of us have not been privy to or consulted about.

The American people obviously are the ones who are ultimately impacted by that, but they have not had an opportunity to have a role in this, to observe what their elected leaders are doing to solve the big problems that face this country. We ought to be functioning the way the Senate used to function; that is, put bills on the floor, allow amendments to be offered and voted on, and then whatever that outcome is, ultimately the House of Representative will pass their version of it, perhaps we will have a conference committee, and hopefully we can get something we can put on the President's desk. That is the way it used to work.

But now we are sitting here because we have twiddled our thumbs for month after month after month in the Senate and not passed a budget, not dealt with this issue in any substantial or meaningful way, and now we are sitting here on New Year's Eve--on New Year's Eve. The countdown on the television is not how many hours and minutes are left until we hit the new year, the countdown on the television is the number of hours and minutes that are left until the country goes over the fiscal cliff.

Think about what that says about this process, about the Senate--100 people elected to make big decisions to advance the interests of and put this country on a better path to a better future that is more secure, more safe, and more prosperous for our children and grandchildren. That is what should happen, but it should have happened months ago.

So I hope we get a result here today that addresses some of these issues--certainly, hopefully, something that will address the tax issue. But that does not solve the problem. If the President gets everything he wants in new taxes, it will fund the government for less than a week. This is not a revenue problem. Washington does not tax people too little, it spends too much. Until we recognize that and deal with

what is driving Federal spending, we are going to continue to saddle future generations with more debt, with more liabilities, and with a lower standard of living and lower quality of life than we have experienced. That is not fair to them.

It is time for us to demonstrate the political courage that is necessary to take on the big issues and to have the votes. Let's have a budget. Let's put it on the floor. Let's vote on it. Let's do something around here that matters, that is meaningful to the future of this country, rather than wait until the last day and the last hour and allow two people to sit in a room and decide the fate and the future of this great country.

I yield the floor.

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

Mr. President, I come to the floor today to talk about the debt crisis facing this country and why I believe any deal to avert the fiscal cliff must address serious entitlement reform. We should not let the discussion around taxes, which is sort of dominating the airwaves here in Washington, distract us from the fact that Washington has a spending problem, not a revenue problem.

Every independent expert who examines America's long-term structural fiscal dilemma comes to the same conclusion: Entitlement programs are the drivers of our national debt over the long term.

Those who argue that we can dig our way out of a $16 trillion debt-- and counting, by the way--by raising taxes are ignoring reality. According to the Congressional Budget Office's most recent forecast, under the current tax rates, revenues over the next 10 years will average roughly 18 percent of GDP. In other words, Federal revenues will return to their historical average without raising taxes on anyone. I will repeat that because I think it is an important point. Our tax revenues will go back to an average of 18 percent over the next decade, which is the historical average, and that happens with existing tax policy in place, without raising taxes on anyone. In fact, according to the Congressional Budget Office, under the current tax rates, revenues as a percentage of GDP will reach 18.6 percent by the year 2022--a decade from now. That is more than half a percentage point higher than the historical average.

Clearly, our budget problems are not because we have too little revenue. Our budget situation today relates directly to Washington's addiction to overspending. In fiscal year 2007, before the recession, total Federal revenue was roughly $2.5 trillion and total Federal spending was approximately $2.7 trillion. Five years later, for fiscal year 2012, which recently ended, total Federal revenue was $2.45 trillion--basically back to the prerecession levels, about the same revenue we had back in 2007--but total Federal spending was above $3.5 trillion. In other words, tax revenue is back to where it was before the recession but Federal spending is now $800 billion higher than it was just 5 years ago, in 2007.

Even the Washington Post on their editorial page, which is not something I usually agree with, agrees. In an editorial entitled ``Mr. Obama's Time to Lead on Entitlements,'' the Post argued:

Since 60 percent of the federal budget goes to Medicare,

Medicaid and Social Security, there's no way to achieve

balance without slowing the rate of increase of those

programs.

Speaking of entitlement programs, the Post editorial went on to say, ``At some point he,'' referring to the President, ``has to prepare the American people--and his own supporters most of all--for the hard decisions required to put the country on a sound financial footing.''

Even the Washington Post agrees that we must take on the driver of Federal spending, entitlement spending and, second, that the President has to lead on that issue. Unfortunately, the President has continued campaigning around the country for higher taxes, but until he gets serious about leading on the issue of entitlement reforms, we simply will not be able to reach an agreement to tackle our fiscal problems in a meaningful way.

A look at the President's proposed tax hike demonstrates why we simply cannot tax our way out of a debt crisis. The President is proposing $68 billion in revenue next year by raising the top tax rates--in the process, raising taxes on nearly 1 million small business owners. The White House claims this will not have a major negative effect on America's business owners or their employees. But according to the National Federation of Independent Business, small businesses created two-thirds of the new jobs in the last decade, and those small businesses are the most likely to be hit by the new tax increases, and those are the small businesses that employ, by the way, 25 percent of the total workforce.

According to a study by Ernst & Young, the President's proposed tax increases will result in 700,000 fewer jobs, a nearly 2-percent decline in wages and economic growth that is 1.3 percent lower than it otherwise would be. Yet despite the broad impact of these taxes on small businesses and our economy, this tax hike would only fund government operations next year for about a week. If the President got everything he wanted in the form of higher rates on income, higher rates on capital gains and dividends--all of those things go back to the higher rates--it would fund government for about a week. The President appears to have an obsession with raising income tax rates and claiming that it is the only way to get significant new revenues. But this is not true according to the administration's own budget.

According to this administration's budget, the President's marginal income tax rate hike on high earners will raise $442 billion over 10 years. As I mentioned, if we look at just the top two rates, we would raise about $442 billion over 10 years. If we average that out, it ends up being about $40 billion a year. Yet, according to the same budget, the President's proposal to limit the value of tax expenditures for higher income earners by itself raises $584 billion over 10 years. In fact, the marginal tax rate increases alone are only one-fourth of the total $1.6 trillion in new taxes that the President has proposed.

So it is simply not true, as a factual matter or as a matter of arithmetic, that we need to raise marginal income tax rates to raise significant revenue. Yet the President continues to insist that marginal income tax rate increases be part of any fiscal cliff agreement. We have to wonder: Is it because of the arithmetic or is it because of a liberal ideology that considers higher income tax rates to be the holy grail of tax policy.

The last thing we ought to do if we want to boost economic growth is to raise tax rates, especially marginal income tax rates. Marginal income tax rates matter because they have incentive effects. They affect a worker's decision to work an additional hour. The Congressional Budget Office explains that phenomenon in this way:

Increasing revenues by raising marginal tax rates on labor

would reduce people's incentive to work and therefore reduce

the amount of labor supplied to the economy.

Most Americans understand this logic intuitively. If we want less of something, raise the cost of producing it by taxing more heavily. If we raise marginal income tax rates, we will get less income as well as the labor that gives rise to that income. If we raise taxes on investment, we are likely to get less investment. It is time to recognize that we don't live in a static world. Taxpayers will adjust to higher rates and, in fact, this has already started to happen.

Consider that in the last month we have seen a host of companies announcing special dividends or rushing to move up their dividend payments before the end of the year. There were 228

companies that announced special dividend payouts in the month of November. This compares to 54 companies in the month of October and 72 companies in November of last year. So we have three times as many companies announcing that they are going to do special dividend payouts in the month of November as we had last year. We have to believe this is a direct result of the administration's plan to raise the top dividend tax rate from 15 percent today to 43.4 percent next year. The top tax rate on dividends next year will nearly triple unless we take action to prevent that.

Rather than raising taxes on America's small businesses, we should reform our Tax Code in a way that encourages economic growth and therefore generates new revenue. Instead of the President's approach to simply redistribute revenue, we should be focused on growing the economy over the long run thus increasing opportunities for wealth creation for all Americans. We know this approach can work because we have done it before. The Tax Reform Act of 1986 lowered rates, broadened the tax base, and resulted in one of the longest economic booms in American history.

Harvard economist Dale Jorgenson recently estimated that the gains available from fundamental tax reform amount to as much as $7 trillion in current dollar terms. The Joint Tax Committee has projected that revenue-neutral tax reform that lowered rates and broadened the tax base could lead to an increase in GDP by as much as 3.5 percent in the long run.

Mark Feldstein, former Chairman of the White House Council of Economic Advisers, calculated that lowering individual tax rates by only 10 percent, coupled with base-broadening measures to ensure revenue neutrality, would raise over $500 billion in new revenue related to growth over the next 10 years. That is lowering individual tax rates by just 10 percent. Increasing the rate of economic growth is the single most important thing we can do to ensure greater prosperity for Americans today but also for the coming generations.

A recent report by Third Way, a center-left think tank, highlighted the importance of raising economic growth back to the post-World War II average of 3.3 percent. According to this report, increasing economic growth back to 3.3 percent starting in the year 2018 would result in nearly 2 million additional jobs by the year 2022 and roughly 5.3 million new jobs by the year 2030. It will result in more than $600 billion in new revenue by 2022 and more than $5 trillion in additional Federal revenue by the year 2030.

Christina Romer, former Chair of the White House Council of Economic Advisers under President Obama, has equated a 1-percentage-point change in GDP with 1 million jobs per year. Given these estimates, there should be a bipartisan consensus that what we need is higher economic growth, not higher taxes. I would propose that the fiscal cliff is both a challenge and an opportunity. It is a challenge to get the Federal Government's runaway spending under control, but it is also an opportunity for us to make real entitlement reforms and to put in place a structure for comprehensive tax reform next year that will have enormous benefits for our economy.

I hope the President of the United States will soon join the discussion that many of us have been having about comprehensive tax and entitlement reforms. Presidential leadership on both of these critical issues is long overdue and is essential.

We cannot do big things in this country, such as entitlement reform or tax reform, absent Presidential leadership. President Obama has a unique opportunity in his second term to do some things that are desperately needed for this country and to put our country on a path toward fiscal solvency, a trajectory that will ensure a brighter, better, and more prosperous future for generations of Americans. In order to have that happen, we have to have the right policies in place, and those are policies that encourage jobs and economic growth.

The President said in his postelection press conference that his No. 1 priority was going to be jobs and the economy. I could not agree more with that statement. The way we achieve that is by getting fiscal discipline in place through budgetary restraint and by having policies in place that promote robust economic growth. If we look at what solves these problems, the best thing we can do is to grow our economy and then a lot of these debt and deficit issues become much smaller by comparison. It really does come down to growth, but we simply cannot grow the economy by raising taxes on small businesses, job creators, and people out there who are creating the jobs and impact literally millions of middle-class families who are employed by those very same small businesses.

Millions and millions of Americans work for small businesses in this country. If the President has his way, those Americans would see their taxes go up. That is not something we want to see happen in a weak economy.

In fact, it was only 2 years ago in 2010 when the President said that we ought to extend all of the tax rates because we should not raise taxes in the middle of a weak economy. At that time economic growth on an annualized basis was 2.4 percent. Economic growth now on an analyzed basis is 2. We have a weaker economy today than we did in 2010 when the President said raising taxes in the middle of a weak economy would be a mistake and a bad idea.

I agreed with him then, and I hope he will come to the conclusion now that this is a bad solution. I know the President is insistent on higher tax rates, but as I pointed out earlier, if we raise the top two marginal income tax rates alone, we generate about $40 billion of revenue next year. If we add to that capital gains and dividend tax rate increases, we get about $68 billion in additional tax revenue next year, which funds government for just under a week. It simply does not solve the problem if we are talking about fixing the deficit.

On the other hand, what it does do is make it more expensive and more difficult for American businesses to create jobs to get Americans back to work, to get our economy growing again, and to make this country prosperous for future generations.

I yield the floor.

Mr. President, I ask for the yeas and nays.

Mr. President, today I recognize Tyler Stenberg, an intern in my Washington, DC, office, for all of the hard work he has done for me, my staff, and the State of South Dakota.

Tyler is a graduate of Mobridge-Pollock High School in Mobridge, SD. Currently, he is attending The University

of South Dakota, where he is majoring in political science and criminal justice. He is a hard worker who has been dedicated to getting the most out of his internship experience.

I extend my sincere thanks and appreciation to Tyler for all of the fine work he has done and wish him continued success in the years to come.

Mr. President, today I recognize Logan Penfield, an intern in my Washington, DC, office, for all of the hard work he has done for me, my staff, and the State of South Dakota.

Logan is a graduate of Northwestern High School in Mellette, SD. Currently, he is also a graduate of South Dakota State University, where he majored in political science. He is a hard worker who has been dedicated to getting the most out of his internship experience.

I extend my sincere thanks and appreciation to Logan for all of the fine work he has done and wish him continued success in the years to come.

Mr. President, today I recognize Colleen Guinn, an intern in my Washington, DC, office, for all of the hard work she has done for me, my staff, and the State of South Dakota.

Colleen is a graduate of Brandon Valley High School in Brandon, SD. Currently, she is attending Georgetown University, where she is majoring in government and English. She is a hard worker who has been dedicated to getting the most out of her internship experience.

I extend my sincere thanks and appreciation to Colleen for all of the fine work she has done and wish her continued success in the years to come.

Mr. President, today I wish to recognize Jason Simmons, an intern in my Sioux Falls, SD, office, for all of the hard work he has done for me, my staff, and the State of South Dakota over the past several weeks.

Jason is a graduate of New Underwood High School in New Underwood, SD. Currently he is attending the University of South Dakota, where he is earning his master of business administration in health services administration. He is a hard worker who has been dedicated to getting the most out of his internship experience.

I would like to extend my sincere thanks and appreciation to Jason for all of the fine work he has done and wish him continued success in the years to come.

Mr. President, I rise today in strong support of the legislation before us to enact permanent normal trade relations with respect to Russia and Moldova. This legislation will also put in place a new mechanism for combating human rights abuses and strengthening the ruling of law in Russia commonly known as the Magnitsky bill. The economic argument for the legislation before us is clear. Russia is the world's sixth largest economy; the world's fifth largest global importer of agricultural products, and home to 140 million potential customers, the largest consumer market in Europe.

Russia is already an important and growing market for U.S. businesses. Of the top 15 U.S. trading partners, Russia was the market where American companies enjoyed the fastest export growth last year, at 38 percent. If we enact PNTR, it is estimated that U.S. exports of goods and services to Russia could literally double over the next 5 years. That is why groups ranging from the American Farm Bureau to the National Association of Manufacturers to the National Corn Growers, just to name a few, strongly support PNTR.

Just last week I met with representatives from the South Dakota Soybean Association, and I was reminded of the importance of Russia as a growing export market to my State of South Dakota. While greater access to the Russian market will benefit a wide range of U.S. companies, such as manufacturers and service providers, I would be remiss not to point out the enormous opportunity for America's agricultural producers in Russia. Consider that Russia is the world's largest importer of beef on a quantity basis, with imports of nearly $4 billion last year. Russia is the world's fifth largest importer of pork products as well as the world's largest importer of dairy products.

Despite the problems we have encountered recently with respect to our poultry exports, America remains the single largest supplier of poultry to the Russian market, accounting for 50 percent of Russian poultry imports last year.

Under the terms of Russia's WTO accession, which occurred last year, Russia is obligated to reduce tariffs across a wide range of agricultural products while also adhering to WTO rules regarding sanitary and phyto-sanitary measures. Once we have enacted PNTR the United States will have the ability to enforce visa commitments through the World Trade Organization dispute settlement process.

It is important to note that our vote on passage of this bill is different than voting on a trade agreement where both sides make concessions in order to reach a conclusion. In contrast, our vote on the House-passed Russia PNTR bill is entirely one-sided in favor of the United States. Russia joined the World Trade Organization in August and will remain a member of the WTO regardless of what we do with respect to PNTR.

We are not giving Russia anything new because they have received PNTR on a recurring annual basis for the past 20 years. The only issue today is whether we will now allow U.S. businesses to take full advantage of the new trade commitments that Russia has made as part of joining the World Trade Organization. If we do not act, American manufacturers, farmers, ranchers, and service providers will remain at a competitive disadvantage relative to their foreign competitors doing business in Russia.

At a time when our economy is growing more slowly than any postrecession recovery since World War II, failure to enact PNTR makes no sense. American export growth has been one of the true bright spots since the great recession.

According to the Department of Commerce, jobs supported by exports increased by 1.2 million between 2009 and 2011.

If we are serious about encouraging job creation, we need to continue to open new job markets abroad for American exports. Normalizing our trade relationship with Russia is an important step in the right direction.

While this legislation is about supporting American jobs by promoting our exports, we should also recognize the importance of the Magnitsky provision included in this bill at the insistence of Senators Cardin, Kyl, McCain, and Wicker, among others. By replacing the outdated Jackson-Vanik law with a new mechanism to support democratic reforms in Russia, this legislation will strengthen the rule of law while combating corruption and human rights abuses.

The only thing surprising about this vote is that it did not happen sooner. Nearly 6 months ago, on June 12, I joined Senators Baucus, McCain, and Kerry in introducing legislation to enact PNTR. With the leadership of Senator Hatch and others, we approved the PNTR legislation in the Finance Committee by a unanimous vote on July 18.

Unfortunately, many of us believe the administration did not push forcefully enough for enactment of PNTR before Russia joined the World Trade Organization in August. As a result, we are just now finally considering this legislation more than 3 months after Russia's WTO accession.

Nevertheless, I look forward to enactment of this bill, especially considering the overwhelming bipartisan vote of approval for this legislation in the House of Representatives just a few weeks ago. While today's vote is specific to Russia and Moldova, I hope this vote will remind us of the importance of moving forward on trade in general. It is an unfortunate reality that when America stands still on trade, we are actually falling behind relative to the rest of the world. There are more than 100 new free-trade agreements currently under negotiation around the world. Yet the United States is party to only one of those negotiations, the Trans-Pacific Partnership.

The United States has not successfully negotiated a single new trade agreement during the 4 years of the Obama administration, and this administration has not yet asked Congress for a renewal of trade promotion authority, despite the fact that TPA expired over 5 years ago. The cost of inaction on trade is high because we live in a global economy where American producers rely on access to foreign markets. More than 95 percent of global consumers live outside the United States.

Consider that in 1960 exports accounted for only 3.6 percent of GDP. Exports account for 12.5 percent of our GDP. Exports of U.S. goods and services supported over 10 million American jobs. If we do not aggressively pursue new market opening agreements on behalf of American workers, we will see new export opportunities go to foreign businesses and foreign workers.

So while I am pleased that we are considering PNTR today, I hope President Obama in his second term will recognize the potential for increased trade opportunities through a more aggressive trade agenda. I look forward to the President signing this legislation into law, and I urge all of my colleagues to vote for the legislation before us when that vote comes up tomorrow at noon.

I yield the floor.

Madam President, I am working with the managers of the bill to try to address concerns they might have on an amendment I have filed at the desk and hope to get accepted. But I wish to speak to it now, if I might.

Essentially, the amendment is just a sense of Congress regarding the Federal Government's use of spectrum, and, in particular, spectrum use of the Department of Defense. Spectrum is a very important resource to the Department of Defense, and it is a very important resource to the private sector.

Unfortunately, spectrum is becoming a scarcer and scarcer resource, and it is increasingly necessary for there to be better and more efficient management of this scarce resource. Demand for spectrum is sharply rising due to the growing advanced network of communication devices that rely on spectrum to transmit and receive information. The rise of mobile devices, such as smart phones and tablets, the iPhone and iPad over the past few years, are the reason for this sharp rise in demand for spectrum.

According to a recent study by Cisco, last year's mobile data traffic was eight times the size of the entire global Internet in 2000. The Cisco study predicts that global mobile data traffic will increase eighteenfold between 2011 and 2016 at a compound annual growth rate of 78 percent, reaching 10.8 exabytes per month by 2016.

The rise in the smart phone and the tablet has contributed significantly to our Nation's economy. The Nation's mobile communications industry, by one estimate, directly or indirectly supports 3.8 million jobs, contributing $195.5 billion to the U.S. gross domestic product, and driving $33 billion in productivity improvements in 2011.

With all that has gone wrong with our economy over the past several years, it is important that we as policymakers nurture the growth of the economy, especially where growth is already happening and, in fact, is exploding. We need to enact smart progrowth policies relating to spectrum. I know the spectrum issue isn't easy to understand or to manage, but it is crucial we seek to better manage this scarce resource, and where it is possible to allocate more of the scarce resource to the private sector where it can create jobs and grow the economy.

That is the reasoning and purpose behind my amendment. The Federal Government controls the vast amount of spectrum for its own use. It is probably not all as efficiently managed as it could be. Undoubtedly, a sufficient amount of this spectrum could be made available to help create jobs and grow the economy.

One of the low-hanging fruits we can deal with almost immediately is the band of spectrum known as the 1755-to-1780 megahertz band. This spectrum is particularly well suited for reallocation to commercial use because it is identified internationally for commercial mobile services and is used for that purpose throughout most of the world. This 1755- to-1780 band is also immediately adjacent to existing domestic wireless spectrum and would fit seamlessly into the current mobile broadband spectrum portfolio allowing for more immediate equipment development and deployment.

There is no reason for further delay in the reallocation of the 1755- to-1780 band for commercial use. This band was identified for commercial broadband use internationally at the 2000 World Radio Communications Conference over 10 years ago. Despite the international designation of the band for advanced wireless use, it is still allocated domestically for government use, heavily by DOD. The National Telecommunications and Information Administration, or NTIA, the agency which is responsible for all government spectrum, issued studies and reports in 2001, 2002, and 2010 that addressed use of the band for commercial use but took no action. The spectrum was also identified in the National Broadband Plan as potentially available for reallocation.

In March 2012, NTIA released its latest report assessing the availability of the band. Unfortunately, the 2012 NTIA report contains no firm deadline for action and no clear path to making the band available for commercial use. It contemplates a potential 10-year timeframe and potential shared use of spectrum but defers any formal recommendation regarding reallocation until the completion of still further study.

Had NTIA acted when the first band was allocated internationally for advanced wireless use, the band might already be available for commercial services. Without a firm deadline DOD is unlikely to agree to reallocation, and the prospects for reallocating the 1755-to-1780 megahertz band for commercial use remain slim.

That is why my amendment urges the President to direct Federal users on that 1755-to-1780 band to prepare, not later than May 31, 2013, a reallocation plan that includes the cost of relocating from this band, and urges the Federal Communications Commission to reallocate this band to commercial use.

I hasten to add that it is important the cost of relocating the band should be verifiable and transparent. The report for the underlying bill requires the Government Accountability Office to determine if the cost of vacating or sharing the 1755-to-1780 band is sufficiently captured in estimates. I look forward to the GAO's report on this issue.

There are those who may voice concerns about how this impacts our national security. I take a back seat to no one in being pro-military. I sat on the Armed Services Committee for 6 years. I have an Air Force Base in my State that I care deeply about. It is important to understand that existing law provides ample protection to DOD for the relocation to replacement spectrum.

There are those concerned about the cost to DOT to relocate. The law requires DOT relocation costs be covered

by the Spectrum Relocation Fund, which is funded through the proceeds of the auction of the band to commercial licensees. If the auction does not raise 110 percent of the relocation cost, the auction would be canceled, assuring that incumbent users are made whole. Moreover, as part of the U.S. Middle Class Tax Relief and Job Creation Act of 2012, Congress expanded the scope of funding from the relocation fund to include the cost of planning for relocation.

I am confident the Pentagon and the larger Federal Government can more efficiently manage its spectrum holdings and make available additional spectrum to help grow our economy and create jobs.

I hope, Madam President, that we can work this out to have it included as part of the Defense authorization bill. I certainly believe it is an amendment that is important with regard to the issue I mentioned, which is the reallocation and relocation of spectrum in this country to allow for multiple uses--obviously, important private commercial uses--out there and an enormous demand, a demand that is adding significantly to our economy and creating jobs for literally thousands and millions of Americans.

Madam President, I yield the floor.

I want to echo the words of my colleague from Wyoming with regard to the whole issue of the Senate rules. I come from the House of Representatives. I came to the Senate having first served in the House of Representatives, three terms there. The House of Representatives, of course, is very structured. There is a Rules Committee. If someone wants to get an amendment considered, debated, voted on in the House of Representatives, there is a process. They have to go plead their case to the Rules Committee.

The Rules Committee can decide, no, we are not going to allow that amendment to be considered; we are not going to allow that amendment to be debated. They can decide which amendments are offered in what order and how much time is allowed on each amendment. It is a very structured process in the House of Representatives, but it makes it very difficult for an individual Member to be able to have their voice heard in the House of Representatives.

That is the way it works. I had the luxury, I guess, while I was serving there of being in the majority. But even in the majority a lot of times I could take what I thought was a very worthwhile amendment, reflective of the views of the people who sent me there to represent them, and they could shoot it down. I never got a chance to have that amendment debated or voted on.

That is what is distinctive about the Senate. That is what the Founders intended with the Senate--to allow for open debate, to allow individual Members to come down to represent their constituencies and to debate the big issues of the day in a way that is different and distinct from the House of Representatives.

I think what many of my colleagues who are proposing this rules change want to see happen is they want to see the Senate function more like the House. It was not designed to. This is a very different place. It was designed to be a very different place where we have debate, where we have votes on amendments, where individual Members have an opportunity--particularly members of the minority in the Senate--have an opportunity to have their voices heard and the voices of their constituents heard.

So this is an unprecedented power grab by the majority. What the majority leader is proposing is essentially to break the rules to change the rules. That will be a legacy, if he is successful, that he will have to live with because he will change the way that this institution has functioned for so long. If we think about how this ought to be done, there is a process by which rules changes can be considered in the Senate, and it starts with the leaders consulting and talking about whether some of those changes ought to be put in place, whether those are appropriate, and then getting the necessary two- thirds vote that is required under the rules of the Senate to change the rules.

The Senate is a very different place from the House of Representatives. What we do ought to reflect that. We should not have these power grabs and attempts to violate the rules of the Senate in order to change the rules in a way that is completely inconsistent with the history and the tradition in the Senate. What the Founders intended when they created the Senate, distinct and separate from the House of Representatives, was to allow for debate and votes on amendments.

I hope the majority leader and members of his party will see clearly to do the right thing and to go about this in the right way; that is, for the leaders to consult, and if there is a need for changes in the rules or modifications, let's do it in the way it has always been done, not by breaking the rules or changing the rules.

Fiscal Cliff

Madam President, I wish to speak as well to the issue that was raised by my colleague from Wyoming; that is, the fiscal cliff. We are on the threshold of something that could be very harmful to the economy of this country, very harmful to jobs. If we go over the fiscal cliff, the experts are telling us--and by the experts I mean not only private economists but the CBO and others in Washington, DC, who analyze and study such things--that we could plunge the country into another recession, we could see unemployment go above 9 percent if tax rates go up and a sequester is triggered a little more than 1 month from now. Longer term, we place unsustainable fiscal imbalances largely because of entitlement programs that have not been reformed in a way that aligns our current demographics with the needs of these programs.

Entitlement spending is the largest driver of our national debt over the long term. Those who argue that we can dig our way out of more than $16 trillion in debt simply by raising taxes are ignoring reality. We have to do something to address what is our real problem in Washington, DC; that is, the spending problem, not the revenue problem. While it is true Federal revenue has declined over the past few years, it is due to the great recession, not because tax rates are too low. The average ratio of Federal revenue to GDP over the past 40 years has been about 18 percent. According to the Congressional Budget Office most recent forecast, under the current tax rates--the tax rates in place today-- revenues from 2013 to 2022, the next decade, would average roughly 18 percent of GDP.

So let's be clear about exactly what the CBO is saying. The CBO is telling us Federal revenues will return to the historical average over the next 10 years without raising taxes on anyone. We are going to get back to the historical average. In fact, according to the CBO, under the current tax rates, revenues as a percentage of GDP will reach 18.6 percent by 2022, and that is more than one-half of a percent higher than the historical average.

Clearly, any deal to address our fiscal situation should be first and foremost about spending, not taxes. Our spending problem is exemplified by the past few years in particular. If we go back to the fiscal year 2007, before the recession, total Federal revenue was roughly $2.5 trillion and total Federal spending was approximately $2.7 trillion. So $2.5 trillion in revenue and $2.7 trillion in spending, so we were still running a deficit of about $200 billion a year. For fiscal year 2012, which recently ended, total Federal revenue was $2.45 trillion, basically back to the prerecession levels, but total Federal spending was above $3.5 trillion. So what happened. Tax revenue is back to where it was before the recession, but Federal spending is now $800 billion-- almost $1 trillion--higher than it was just 5 years ago in fiscal year 2007. It is no wonder that Federal spending and our national debt will continue to grow for the foreseeable future.

According to the CBO, mandatory spending, which comprised about 60 percent of total Federal spending in fiscal year 2012, is going to continue to grow, and if we look at what is driving that, it is Medicare, Medicaid, and Social Security. Those programs alone represent over 40 percent of Federal spending currently. Spending on these programs is projected to grow at an unsustainable rate and we cannot simply raise taxes to pay for all this new spending. That is the problem. We have a spending problem in Washington, DC, and not a taxing problem.

We have to make significant changes in these programs to make our Federal entitlements sustainable and in line with today's demographics, and we need Democrats to join us in that effort.

To put a fine point on all that, I wish to mention what the nonpartisan Congressional Budget Office report, which was issued on November 12 of this year--just a couple weeks ago--said: ``With the population aging and health care costs per person likely to keep growing faster than the economy, the United States cannot sustain the Federal spending programs that are now in place. . . .''

That is from the Congressional Budget Office.

The President's own fiscal commission, the Simpson-Bowles Commission, noted in its official report: ``Federal health care spending represents our single largest fiscal challenge over the long run.''

Earlier this month, the Washington Post editorial board said, ``Entitlement reform must be on the table.''

Of the debt reduction plan, the Post editorial board went on to say, ``No serious plan can exclude entitlements.''

So we have experts inside and outside the government, we have the editorial boards of newspapers around this country, all recognizing what the real issue is; that is, the fact that Washington spends too much and it spends too much on programs that are unsustainable for our future.

What we have to be able to do is to come up with ways in which we can reform these programs to make them more sustainable. Of course, if we look at Medicare spending alone, in 1967, it was proposed that by 1990 Medicare would spend about $12 billion. That is what the Congress projected when they created that program in 1967. That calculation, by the way, included inflation. If we look at actual Medicare spending in 1990, it was $110 billion--almost 10 times the amount that was estimated in 1967. This year, we will spend $550 billion on Medicare. Ten years from now, the Congressional Budget Office projects we will spend $1.1 trillion on Medicare.

With regard to Social Security, for the past 2 years, this program has been operating at a cash deficit. If we look at the next 75 years, benefits promised to current and future beneficiaries exceed payroll tax revenue and trust fund redemptions by $8.6 trillion. The present course of Social Security is unsustainable, and the trustees report projects that the trust fund is going to be exhausted by the year 2033.

In order to protect Social Security for future generations, it, too, must be reformed. We have to take on what is driving Federal spending and that is

entitlement programs. We have to reform them. Raising taxes is not the solution.

The President's only proposal so far is to raise taxes on small businesses to generate this next year what would be $68 billion in revenue which, by raising the two top tax rates in the process, would hit nearly 1 million small businesses. What is ironic about that is raising taxes on the small businesses that create jobs in this country and that grow our economy--actually raising taxes on them to generate $68 billion would fund the government a little under 1 week. That is what we are talking about. The dimensions of this problem are so vast we cannot solve them simply by raising taxes and particularly raising taxes on the very people we are looking to--small businesses. Raising taxes on small businesses would do harm to the economy. We would give back everything we get in the form of higher tax revenue by reduced economic growth. We have to deal with the fundamental problem we have; that is, entitlements.

I hope my colleagues on the other side will work with us. I hope the President will work with us. The President knows what the problems are, but he has folks all across the country who are putting pressure on him to not deal with the issue of entitlement reform. But I hope he will come to the table and address this issue. We have a spending problem and we have a growth problem. If we can address the spending problem, get entitlement program reform on a sustainable path. If we can get progrowth tax reform put in place to grow the economy and expand the economy, we can solve these problems. People across this country expect us to. The world expects us to. The financial markets expect us to. It can't be done simply by raising taxes on small businesses which so far is all we have gotten from the administration and from many of the Democrats in Congress.

We have to fix the spending problem and the growth problem. We have a solution to do that. We hope our colleagues will work with us to do that.

I yield the floor.

Mr. President, today I wish to recognize Kelsey Luckhurst, an intern in my Aberdeen, SD, office, for all of the hard work she has done for me, my staff, and the State of South Dakota over the past several months.

Kelsey is a native of Garden City, SD and a graduate of Clark High School. Currently, she is attending Northern State University, where she is pursuing degrees in history and political science. She is a very hard worker who has been dedicated to getting the most out of her internship experience.

I would like to extend my sincere thanks and appreciation to Kelsey for

all of the fine work she has done and wish her continued success in the years to come.

Mr. President, today I recognize Mike Modrick of Rapid City, SD. Mike, a recognized television personality in western South Dakota, is celebrating 25 years on October 26, 2012, as a meteorologist at KOTA Territory News and 30 years in weather forecasting. Mike is a graduate of Iowa State University with a bachelor of science degree in meteorology and a degree in speech. Shortly after graduating, Mike made his way to the beautiful, yet markedly unpredictable climate of western South Dakota where he has provided important safety and weather communications to the people of South Dakota for 25 years.

Mike has received the Seal of Approval for Television Weathercasting from the American Meteorological Society, which is considered the most prestigious award in weather broadcasting. His dedication to timely, reliable forecasting across western South Dakota is indicative of his passion and commitment to the safety of all South Dakotans. As Mike celebrates his silver anniversary with KOTA, it is my pleasure to thank him for his service.

Mr. President, I would like to thank my colleague from Oregon, Mr. Merkley, for working with the Senator from Missouri, Mrs. McCaskill, and me today to address his concerns with our bipartisan bill, S. 1956, the European Union Emissions Trading Scheme Prohibition Act. The amendment, which he has filed for consideration and which is currently running through the hotline process, reconfirms that the Secretary of Transportation's responsibility to determine there is a public interest before taking any action does not end after the first determination. Instead, it is an ongoing responsibility.

The amendment that Mr. Merkley has filed, and which I support, clarifies that it is the Secretary's right to reassess the public interest determination. Additionally, the amendment clarifies that if the EU ETS is amended, if there is an international agreement on aviation emissions, or if a Federal public law is enacted that addresses aviation emissions, that the Secretary will again revisit the public interest determination.

Again, I would like to thank the Senator from Oregon for working with me, and I look forward to passage of S. 1956.