Floor Statements

Madam President, I ask unanimous consent that the order for the quorum call be rescinded and that I be allowed to speak as if in morning business.

Madam President, I rise to express my growing concern as massive tax increases loom on the horizon, and yet the Senate has not taken a single vote to forestall what many are appropriately calling taxmageddon.

Washington tends to be a place where people speak in hyperbole, but it is hard to overstate the magnitude of the tax increases that will hit our economy starting next year if we do not act. If Congress does not vote to extend the current income-tax rates, the lower tax rates on investment income, relief from the alternative minimum tax, relief from the Federal estate tax, and other expiring tax relief measures, the result will be a tax increase of more than $470 billion on Americans in 2013 alone.

Over the next 10 years this tax increase will result in nearly $4.5 trillion in new taxes on American families and entrepreneurs. This will be the largest tax increase in our Nation's history in absolute dollars and the second largest tax increase since World War II as a percentage of our economy. This massive tax increase does not even take into account the new taxes enacted as part of ObamaCare that will also go into effect in 2013 and that will impose an additional $23 billion in higher taxes on individuals and businesses.

What will these taxes mean to the average American family? The Heritage Foundation recently published a study that estimated the increase per tax return in every State. In my State of South Dakota, Heritage estimates that the average tax increase per tax return will be $3,187 in 2013.

I would say this to my Democratic friends who generally believe in demand-driven Keynesian economics: The average family in South Dakota can do more to stimulate our economy and create new employment by keeping their $3,187 and spending it as they see fit, not as Washington sees fit to spend it on their behalf.

Taxmageddon is an apt description when we consider the impact of these tax increases not just on individual families but on our entire economy. Until recently we could speculate about the impact of these tax increases on our fragile economy, but the magnitude of the damage was not in dispute. Not anymore.

Last month, the Congressional Budget Office gave us the most definitive estimate yet of the impact of the nearly $\1/2\ trillion of tax increases in 2013 when combined with the more than $100 billion of spending cuts from the sequester.

The Congressional Budget Office projects that the combination of massive tax increases and the sequester will result in real GDP growth in calendar year 2013 of only one-half of 1 percent. The picture is even bleaker when we consider that the Congressional Budget Office also projects that the economy will actually contract by 1.3 percent in the first half of 2013. According to the CBO, such a contraction and output in the first half of 2013 would ``probably be judged to be a recession.''

So let's be clear about what ``taxmageddon'' means. We are not talking about a slight slowdown in growth of a few tenths of a percent. What we are facing is the difference between positive growth on one hand--which will mean more jobs and higher incomes--and a recession on the other hand.

How big is the difference in economic growth next year if we act to forestall the pending tax increases versus not doing anything about it? According to the Congressional Budget Office, if Congress acted to remove the tax increases and budget cuts, the growth of real GDP in 2013 would be in the range of 4.4 percent.

This sort of robust growth is a far cry from the lackluster economic performance that we have experienced of late. In fact, GDP growth for the first quarter of this year was recently revised downward to just 1.9 percent. This is hardly the magnitude of economic growth necessary to sustain a meaningful recovery that will finally bring the unemployment rate below 8 percent--something the current meager recovery has failed to accomplish.

We can, and must, do better. We can start by providing Americans some certainty as to what their taxes are going to be come next year. Fortunately, we learned recently that the House of Representatives intends to hold a vote on legislation to extend the existing tax rate next month. According to statements by House Speaker Boehner and Majority Leader Cantor, the House is likely to consider a short-term-- perhaps for 1 year--extension of existing tax rates as a bridge to fundamental tax reform next year.

Some may question why we need to vote on an extension of the tax rates now because they assume these tax issues can simply be dealt with as a part of the postelection lameduck session. The answer is that we need a vote now because the delay in extending current tax policy is having a very real impact on our economy today.

In fact, the Congressional Budget Office again estimates that the mere possibility of pending tax increases and spending cuts will lower U.S. GDP by one-half of 1 percent in the second half of this year--not next year, this year. The reason for this is simple. Americans, whether they be investors, small business owners, or simply consumers, understand that they may have a larger tax bill come next year, meaning they will have less aftertax income. Faced with that possibility, we should not be surprised if Americans are choosing to consume less or put off business investments until they know what their tax situation is going to be.

Just this week there was a Bloomberg article entitled ``Fiscal Cliff Concerns Hurting Economy As Companies Hold Back.'' The article quoted a senior economist at Bank of America who said, ``You don't board up the windows when the hurricane is there. You board up the windows in anticipation.'' This economist predicted U.S. growth decelerating to 1.3 percent in the third quarter of this year and 1 percent in the fourth quarter.

The moral of the story is clear. The sooner we act to extend the current tax rates, the better off our economy will be and the better off will be the 12.7 million Americans who are currently unemployed. The sooner we act, the better off will be the 5.4 million Americans who have been unemployed long term or the 46.2 million Americans living in poverty or the record 46 million Americans who receive food stamps.

I agree with President Obama when he said in August of 2009, ``You don't raise taxes in a recession.'' End quote of President Obama in August of 2009.

If you should not raise taxes in a recession, it stands to reason you also should not raise taxes that will cause a recession. I also agree with a number of my Democratic colleagues quoted earlier this week in an article about these pending tax increases. I agree with Senator Jim Webb, who is quoted as saying, ``We shouldn't raise taxes on ordinary income.'' I agree with Senator Ben Nelson, ``My druthers is to extend the tax cuts for everybody.''

I agree with former Senator Pete Domenici and former OMB Director Alice Rivlin, who appeared before the Finance Committee earlier this week, and who both agreed we need a short-term extension of current tax law in order to get us to a place where we can consider fundamental reforms to our Tax Code and our entitlement programs.

Even former President Bill Clinton, a major surrogate for the Obama campaign, admitted the obvious when he said recently that a short-term extension of the tax cuts might be necessary.

Former President Clinton and other Democratic Members whom I mentioned have not suddenly become supply-side tax cutters. But they realize it is simply common sense that with the economy slowing, the last thing the Congress should do is slam on the brakes by allowing massive tax increases.

We were reminded earlier this week just how destructive the proposed income tax rate increases would be on the sector of our economy responsible for the bulk of new job creation, and that is our small businesses. According to an analysis by the nonpartisan Joint Committee on Taxation released on June 18, the tax increases that President Obama has proposed would hit more than half--53 percent, to be precise--of all flowthrough business income. The Joint Tax Committee estimates that 40,000 business owners would find themselves subject to higher tax rates next year.

Does anyone think, with unemployment above 8 percent for 41 straight months, that higher taxes on nearly a million business owners is the right policy? Yet that is exactly where we are headed if we do not act.

Of course, extending current tax law temporarily is only a short-term fix. What is needed is comprehensive tax reform, much like the Tax Reform Act of 1986. Real tax reform will drive economic growth higher, will lead to robust job creation, and result in more revenue to the Federal Government. But real tax reform will require Presidential leadership, something that has been unfortunately lacking over the past 3\1/2\ years. Perhaps next year we will have a President truly willing to commit to tax reform, a President who is not content with simply releasing a 23-page framework for corporate tax reform. But until we get to comprehensive tax reform, the least we can do now is ensure that Americans do not face a massive new tax hike.

In conclusion, we are facing a moment of truth. We can choose to put our heads in the sand and pretend as though Taxmaggedon is not real, we can choose to accept slower economic growth for the remainder of this year and a recession in the first half of next year or we can choose to take action in a way that says, loudly and clearly to all Americans, now is not the time for a massive new tax increase.

I am hopeful we will see a bill from the House of Representatives in the coming weeks to extend the tax rates in order to avert Taxmaggedon. If the Senate majority is serious in its rhetoric of getting our economy back on track, they will allow a straight up-or-down vote on this measure. Fundamental tax reform may need to wait until the next Congress, but we can and we should act immediately to forestall the looming tax increases that we know will throw this economy back into a recession. It is not a Republican or a Democratic thing to do, it is simply common sense. I am hopeful the Democratic majority will allow for debate and vote on an extension of the current tax rates sooner rather than later. Every day we wait is another day our economy suffers unnecessarily.

I do not have to tell anybody here, if you look at all the economic data that comes in month after month, we have the weakest economic recovery in 60 years. We have 23 million unemployed or underemployed Americans. We have, as I said, 41 consecutive months now of unemployment over 8 percent, and we have anemic, sluggish growth projections next year by the Congressional Budget Office if in fact we do not take the steps necessary to avert Taxmaggedon.

I hope the House of Representatives will vote. I hope the U.S. Senate will follow suit. I hope the President of the United States will join us in recognizing that we cannot afford to allow taxes to go up--the largest tax increase in American history--on January 1 of next year.

We cannot wait until a lameduck session to address it, because every single day we do, Americans, investors, small businesses are putting off decisions about hiring, about putting their capital to work and growing this economy.

I yield the floor.

Mr. President, today I recognize the South Dakota United Way. This is the 125th anniversary of the United Way and I would like to specifically acknowledge the South Dakota chapters on this special day. The local United Way has been active in South Dakota since 1929 and has made outstanding contributions to the communities they serve.

There are 11 United Way locations in South Dakota providing services such as educational opportunities, lower income community aid, and health awareness programs. The United Way partners with many local businesses, furthering their community impact.

I would like to offer my congratulations on this monumental day to this program and to all the great men and women whose generosity and service make the United Way a success.

I thank the Senator from Oklahoma for his leadership on this issue, for yielding the time, and I appreciate everything he has done to bring S.J. Res. 37 to the floor of the Senate.

As the father of two daughters, I want a cleaner, safer, healthier environment for their generation and for

future generations. Thanks to the commonsense policies that balance economic growth with a cleaner environment, our country has made significant progress toward improving the quality of our air and water. We have made progress under Republican Presidents and we have made progress under Democratic Presidents. We have also made progress during Democratic control and Republican control of the Senate.

But what the Obama administration is doing with this regulation, and with many of the other policies that pertain to energy, is pursuing an ideologically driven agenda in which the costs far outweigh the benefits. He promised his energy plan would necessarily make electricity costs skyrocket, and his policies are clearly delivering on that promise.

A prime example of that flawed agenda is Utility MACT, which is the most expensive regulation in EPA's history, with an estimated cost of $10 billion. These are costs that will be passed on to families and small businesses across the country at a time when we are experiencing the worst economic recovery in over 60 years.

We all know the statistics. Unemployment has been at 8 percent now for 40 consecutive months. Real unemployment is above 14 percent. There are 23 million Americans who are not working today, and 5.4 million Americans have remained out of work for over a year. Despite these facts, President Obama continues to push regulations such as Utility MACT that are going to make energy more expensive and, at the same time, destroy good-paying jobs.

According to the National Economic Research Associates, Utility MACT will cost between 180,000 and 215,000 jobs by the year 2015. When including President Obama's other regulations on the electric power sector, the United States stands to lose approximately 1.65 million jobs by the year 2020. We simply cannot afford these politically driven regulations at a time when 23 million Americans remain unemployed or underemployed.

Low-income and middle-class families are the ones who will be hit the hardest by the administration's actions. Families who earn less than $50,000 already spend 21 percent of their income on energy costs compared to 9 percent for those making more than $50,000. Now, thanks to the EPA's regulatory actions, those costs are going to go up an average of 6\1/2\ percent and as much as 19 percent in some areas. Middle-class incomes have already fallen by over $4,300 these past 3 years, and now President Obama wants to further burden them with higher energy costs.

These higher energy costs are not some far-off projection. In many cases, these costs are already being realized. As an example, PJM, which is a regional transmission organization which coordinates the movement of wholesale electricity in 13 States and the District of Columbia, in its May 2012 capacity auction reported 2-year capacity price increases of 390 percent. PJM is reporting a nearly tenfold increase in wholesale energy costs in northern Ohio. According to one of their spokespersons,

Capacity prices were higher than last year's because of

retirements of existing coal-fired generation resulting

largely from environmental regulations which go into effect

in 2015.

The result could cause electricity bills across the PJM region to increase by up to $130 and potentially much higher in places such as northern Ohio.

In addition to electricity rates, EPA's agenda will drive up the cost of food, transportation, fuels, and manufactured goods, as those costs get passed on across all the sectors of the economy. The end result is more pain for the middle class, slower economic growth, and fewer jobs.

The President likes to talk a lot about fairness, so I will ask my colleagues: Is it fair that unaccountable EPA bureaucrats are going to drive up utility bills by up to 19 percent? Is it fair manufacturers are going to have to pay higher energy bills rather than hire new workers? Is it fair that small towns across the Midwest are already being devastated by coal plant closings on account of regulations from the Obama administration? Is it fair that thousands of workers are going to be laid off and lose not only their paychecks but their employer-provided health care coverage as well?

For most South Dakotans and millions of hard-working taxpayers across the country, I believe the answer is that the consequences of these regulations are inherently unfair. They penalize hard-working middle- class Americans.

In the case of Utility MACT, consumers are going to pay a heavy price for President Obama's political agenda to restrict access to the abundant and affordable sources of domestic energy we possess in this country.

Most Americans believe regulations should work for consumers and not against consumers. Unfortunately, EPA bureaucrats have drafted the Utility MACT regulation in an inefficient and unworkable manner. Utility MACT's new source standards are so strict they cannot possibly be met.

According to the Institute of Clean Air Companies, the proenvironmental trade association comprising nearly 100 suppliers of air pollution equipment, Utility MACT makes it ``nearly impossible to construct new coal-fired units because financing of such units requires guarantees from equipment suppliers that all emission limits can be met.''

There has to be a better approach. S.J. Res. 37, which would force a rewrite of Utility MACT, is the only solution to address the rule's problems. It is time to rewrite Utility MACT in a manner that better balances economic growth with environmental protection.

I hope today we will have a majority of our colleagues here in the Senate who will support S.J. Res. 37. Doing so will send a strong message to the Obama administration that the Senate will not stand by and watch his regulatory agenda further hurt small businesses and middle-class families, making it more expensive and more difficult for businesses in this country to create jobs. That is the end result of this regulation. It is the end result of many of the energy policies and regulations coming out of this administration. That has to stop. We have to get Americans back to work. We have to get our economy growing again.

Madam President, I yield the floor.

Mr. President, I call up amendment No. 2437.

Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.

Mr. President, in the years 1994 to 2003, the Congress appropriated over $36 billion in ad hoc or emergency assistance for farmers and ranchers across this country above and beyond the normal farm program payments. Let me say that again--$36 billion in a 10-year period between 1994 and 2003 above and beyond normal farm program payments.

Since the emergence of the Crop Insurance Program, we have seen those disaster ad hoc emergency bills go away. The Crop Insurance Program is the centerpiece of this farm policy. That is what this entire farm bill is built around. That is what farmers and producers in this country said they wanted.

There is going to be an amendment offered by our colleagues Senators Durbin and Coburn that would limit the availability of that to people who have adjusted gross incomes under $750,000. What I would say to that is that this amendment--the amendment I am offering--is not about those who are making more than $750,000; it is about those who make less whose premiums would go up as a result of that change.

We need a good, strong Crop Insurance Program for the farmers in this country. That is what this farm bill is built upon. We should not take any chances with it.

Mr. President, I ask unanimous consent to be able to respond to the comments of the Senator from Illinois.

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

Mr. President, I ask unanimous consent that my Republican colleagues, Senators McCain and Ayotte, and myself be permitted to enter into a colloquy for up to 30 minutes.

Mr. President, I come to the floor, along with my colleagues, Senators McCain and Ayotte, to talk about the significant uncertainty surrounding sequestration and its threat to our national security.

The triggered reduction in spending is $1.2 trillion. After accounting for 18 percent in debt service savings, the required reductions amount to $984 billion to be distributed evenly over a 9- year period or $109.3 billion per year. So what we are talking about is $54.7 billion in reductions will be necessary in both the defense and nondefense categories, despite the fact--despite the fact--defense funding constitutes just 20 percent of the budget.

As my colleagues Senators McCain and Ayotte are well aware, this sequester disproportionately impacts defense spending, putting our national security at risk.

It has been almost a full year since the Budget Control Act was passed, and Congress needs a precise understanding from this administration as to the full effects of sequestration on national security funding. Both Senator McCain and I, along with Senators Sessions, Ayotte, and others, have called on the administration to detail the impact of sequestration on defense accounts.

This information is necessary for Congress to address the deep and unbalanced defense budget cuts that are expected under sequestration-- which are in addition, I might add, to the $487 billion in reductions that were carried out last August.

What little information has been made available from the administration about the planned cuts to defense should give all of us pause about our Nation's security if sequestration proceeds without any modifications.

In a letter to Senators McCain and Graham this past November, Secretary Panetta said that over the long term, sequestration means we will have the smallest ground force since 1940, the smallest fleet of ships since 1915, and the smallest tactical fighter force in the history of the Air Force.

If sequestration were to go into effect, we risk turning back the clock on our military strength to where it was during the early 20th Century, before World War II. That clearly cannot be allowed to happen if we hope to have a future in which we are secure, prosperous, and at peace in the world.

I wish to turn now to my colleague Senator McCain, who is the ranking member of the Armed Services Committee. He has been a leader in calling attention to this cloud of sequestration cuts looming over the Defense Department and its threat to our national security. He is, obviously, one of the foremost experts in the Senate when it comes to the issue of national security, and someone who has been raising the issue of sequestration and its impact to our national security interest for some time.

I would ask Senator McCain if he might comment on his observations with regard to this issue and its impact on national security.

I would say to my colleague, the Senator from New Hampshire--because she mentioned that she and I both serve on the Budget Committee--that this perhaps could have been avoided had we passed a budget that dealt with title reform.

The reason we have these huge cuts, these steep and unbalanced cuts to the defense budget, is because we punted on the Budget Control Act to the supercommittee, which didn't produce a result, and this triggered these across-the-board reductions in spending--half of which come out of the defense budget, as the Senator mentioned, a defense budget that represents only 20 percent of Federal spending. So proportionality here seems to be a real issue. Why would you gut the part of a budget from which you get the resources to keep your country safe and secure?

Frankly, it comes back--in my view, at least--to the fact that now, for 3 consecutive years, the Budget Committee, on which the Senator and I both serve, has failed to produce a budget, spelling out a more reasonable and thoughtful plan for how to deal with these challenges as opposed to having this budget axe fall in this disproportionate way on our national security interests.

I am curious as to the Senator's thoughts with regard to the reason why we are where we are today.

Ironically, the point my colleague from New Hampshire made earlier and the statements made by the President's own Defense Secretary about what these cuts would mean just speak volumes. It is absolutely stunning when we look at the impact this would have on our national security budget, and, at least to date, the President is not weighing in on this argument at all.

I think what the Senator from New Hampshire and Senator McCain and I are saying is this: Show us your plan.

If we are going to do something about this, we need to know how they intend to implement this. So the transparency issue is very important. Asking them to tell us how they are planning on making these reductions seems to be a critically important part of not only informing the American public but giving Congress a pathway--if there is one--to address and perhaps redistribute these reductions.

When we are talking about a $109 billion reduction that will take effect in January of next year--half of which comes out of defense--on top of $\1/2\ trillion in cuts to accrue over the next decade that were approved as part of the Budget Control Act, that is a huge chunk out of our national security budget.

I think the Senator from New Hampshire made an excellent point as well about how this obviously impacts national security first and foremost. I have always maintained that if we don't get national security right to protect and defend the country, then the rest is all secondary.

But there is a huge economic impact, as was pointed out not only by the study my colleague from New Hampshire mentioned but also by the Congressional Budget Office recently in speaking about the fiscal cliff that hits us in the first part of January next year and could cost us 1.3 percent in growth, which, according to the President's economic advisers, could be 1.3 million jobs. If the national security issue does not get your attention, certainly we would think the economy and jobs issue would. Yet we are hearing silence--crickets coming out of the White House.

I would hope he would weigh in on this debate and at least provide us with an idea of how the administration intends to implement this and hopefully a plan about how to avert this. As has been emphasized by the President's Defense Secretary, there would be a catastrophic impact on our national security interest.

Mr. President, again I appreciate the leadership of the Senator from New Hampshire as a member of the Armed Services Committee on not only this issue of national security but also as a member of the Budget Committee, where we serve together. It is critical that we do something soon, and the reason for that, as the Senator from New Hampshire mentioned, is that a lameduck session of Congress--is not an appropriate time to try to legislate on a major issue such as this, particularly given the fact that there is going to be a pileup of other issues. We have tax rate expiration issues to deal with and potentially another debt limit vote coming up.

It seems to me that we ought to provide as much certainty as we can to our military, to the leaders of our military who have to make these decisions, and to the people who build these weapons systems and experience many of these reductions that will impact jobs.

As my colleague mentioned, there is a Warren Act requirement that they notify people if they are going to lay off people. There has to be a lead time to this, and that is why getting a plan from the administration that lays out in specific and detailed terms exactly what they intend to do with regard to sequestration is really important to this process and as a matter of fundamental transparency for the American people and for the Congress.

Clearly, there is a need--in my view, at least--for us to deal with this in advance of the election, not waiting, not punting, and not kicking the can down the road as is so often done here.

I appreciate the leadership of the Senator from Arizona, the ranking member of the Armed Services Committee, and my colleague from New Hampshire in raising and elevating this issue and putting it on the radar screen of the Senate in hopes that something might actually happen before the election. But that will require that the President of the United States and his administration get in the game. So far, we haven't heard anything from them with regard to how they would implement sequestration or what suggestions they might have that would avoid and avert what would be a national security catastrophe if these planned or at least proposed reductions go into effect at the first of next year.

I see that the Senator from Arizona, the ranking member of the Armed Services Committee, is back. Does the Senator have any closing comment before we wrap up this session?

Well, let me thank my colleagues in the Senate and particularly the Senator from Arizona and the Senator from New Hampshire for what they are doing on this issue. I hope that we are successful and that in the end we can get some greater transparency from the administration about how they intend to implement these reductions and that we might be able to take the steps that are necessary, as was pointed out, on a bipartisan basis. This is not an issue that affects one side or the other, it is an issue that affects the entire country when we are talking about our national security interests and the great jeopardy and risk we put them in if we don't take steps to address this issue.

I yield the floor.

Mr. President, I ask unanimous consent that Justin Posey, an intern in Senator Paul's office, be granted the privilege of the floor during today's session of the Senate.

Madam President, earlier today the majority leader and the majority whip came to the floor to decry and denounce, attack Republicans for what appeared to be literally everything bad that has happened in the world in the last several years, to the point you have to ask yourself, do they really believe what they are saying? They came down here to talk about how Republicans are blocking this, are blocking that.

I think it is important to point out that now for the past 6 years, the Democrats have been the majority party in the U.S. Senate. In fact, for 2 of those years, they had a filibuster-proof, 60-vote majority in the Senate. Filibuster proof--literally, they could do anything they wanted to in the Senate. They had a majority in the House of Representatives, and, of course, they got the Presidency.

If you look at the volume of the legislation that was produced at the time, most of the things that were accomplished with the 60-vote, filibuster-proof majority were things the American people disagreed with--I think as

evidenced now by what you see in terms of public opinion polling about the health care bill. Most people disagree with the individual mandate that was included in that legislation and disagree generally with many of the provisions in the bill.

But my point very simply is, for a period of time, the Democrats literally had the run of the tables here in Washington, DC, as we know it--a filibuster-proof, 60-vote majority in the Senate, a majority in the House of Representatives, and the Presidency--yet they come down and decry Republicans as being responsible for all the things that have or have not happened here in the Senate.

One of the things they point out is that there is this intent by Republicans to continue to filibuster legislation. I would argue that nothing could be further from the truth. In fact, everybody knows that in the Senate the majority leader is the person who is first to be recognized on the Senate floor, which allows him to use that power to offer a series of Democratic amendments to pending legislation in a way that prevents Republicans from offering their own ideas. It is called filling the tree--sort of a term of art that is used around here in the Senate. But filling the tree essentially is what the Democratic majority leader has the opportunity to do because he has the power of recognition and he can fill the amendment tree and prevent the Republican amendments from being offered and voted on.

Now, interestingly enough, Majority Leader Reid once insisted that this practice ``runs against the basic nature of the Senate.'' Let me repeat that. Majority Leader Reid once insisted that filling the amendment tree ``runs against the basic nature of the Senate.'' But by the way the Senate operates today, it is pretty clear that he has abandoned that assessment.

According to the Congressional Research Service, the CRS, Majority Leader Reid has employed this tactic a record 59 times. He has used it to block minority input into legislation 50 percent more often than the past six majority leaders combined. I think that is worth repeating. This majority leader has used the filling-of-the-tree procedure 50 percent more often than the past six majority leaders combined. So the only option the minority is left with under that scenario is to basically try to get votes on amendments and to work with the majority, in which case the majority says: No, we are not going to give you any amendments; we have filled the tree. So a cloture motion is filed, and we end up having a vote on cloture.

What we have seen repeatedly now is the Senate sort of break down into this state of dysfunction simply because the majority does not want to make tough votes on amendments. We have seen this over and over and over again. As I say, it is historic and unprecedented in terms of the number of times it has occurred in the U.S Senate.

I would also suggest that the real reason, probably, that we do not have votes on amendments and that the filling of the tree is used repeatedly is because Members on the other side do not want to make the hard decisions, do not want to cast the tough votes. I think that is evidenced as well by the fact that for 3 years in a row now, we have not had a budget in the Senate.

If there was a real interest in solving problems, you would think the majority--again, which has the responsibility to put a budget on the floor--would bring a budget to the floor that would set a direction for the future of this country and ask the Members of the Senate to vote on it, to vote on amendments, to have an opportunity to say to the American people: This is how we would lead the country. That has not happened now for over 1,100 days, for the past 3 years.

Now, Republicans are ready and willing to work with the majority, as we have evidenced on many occasions. In fact, we are going to debate, this next week, farm bill legislation--something for which there is bipartisan support in the Senate.

I would argue that there are many things we would like to see done. We would love to have an opportunity to vote on extending the tax rates that are in effect today--which is something that even President Clinton in the last few days has come out in support of--because we know--everybody here knows--we are facing this fiscal cliff. It could be very dangerous to our economy if steps are not taken to prevent and avoid that. And we would be more than willing to work with the majority on extending the tax rates to give some certainty to our job creators and our small businesses.

We would also like to work with them on the sequester that is going to happen at the end of the year, in redistributing those cuts in a way that does not completely decimate our national security budget.

There are lots of things the Republicans are ready to work on with our colleagues on the other side when it comes to trying to grow the economy and create jobs. But, frankly, we believe it is important that we at least have an opportunity to get amendments debated and voted on. That simply has not happened, as I pointed out by the number of times the majority leader has filled the tree.

So I am not suggesting there is not plenty of blame to go around in Washington for the state of the situation we are in. All I am simply saying is that for the majority leader to come down here and suggest that somehow Republicans are responsible for gridlock here in the U.S. Senate is a complete denial of reality and a denial of the facts.

As I said before, they had a period here for a few years where they had the complete run of the place. They had a 60-vote, filibuster-proof majority in the Senate, a majority in the House of Representatives, and the Presidency, enabling you to do literally anything you wanted to do. They still have the majority in the U.S. Senate, the ability to control the agenda and to determine what does and does not come to the floor, what amendments are allowed, and the use of the filling of the tree in an unprecedented way. It is pretty clear to me that to suggest for a moment it is Republicans who are attempting to slow things down around here or keep the majority from working its will is completely contrary to the facts and the reality, as I think most Senators--all Senators, I think--know.

I know my colleague from Wyoming is someone who is somewhat new here, but he has been here long enough now to have seen many times where the majority has prevented the minority from actually offering amendments, getting votes on amendments on the floor of the Senate. I would just suggest to him and allow him to make some observations with regard to this subject as well because it strikes me, at least, that he and I both--and many of our colleagues--are very interested in working with the majority on things that would actually put people back to work, get our economy growing again.

We would love to have that opportunity.

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

Madam President, I ask to speak as in morning business.

Madam President, I come to the floor today to talk about the significant uncertainty surrounding sequestration and its threat to our economy. The Congressional Budget Office forecasted that the pending fiscal cliff facing this country; that is, the scheduled tax increases and across-the-board spending cuts that will result from the expiration of current tax policy and the enactment of sequestration, could lead to recession. In fact, the Congressional Budget Office said repeatedly that if the tax increases and sequestration occur at the end of this year, there will be a 1.3-percent economic contraction during the first quarter of 2013. I believe that would argue for extending the existing tax rates. I think the uncertainty associated with the tax rates perhaps expiring at the end of the year and businesses not knowing what is going to happen is creating a real problem and a real cloud out there in the economy.

I believe it is important that there be economic certainty for people in this country, particularly for investors and small businesses. So it seems to me, at least, that getting those tax rates extended would be a very important part of the solution.

Having said that, I also believe we need tax reform for this country. We need comprehensive tax reform that will fuel economic growth. I think there is enormous potential for economic growth and job creation if, in fact, we could get to overhauling our Tax Code in this country, making it more simple, more fair, more clear, and obviously lowering the rates and broadening the tax base. But until that happens, we need certainty, which means we need to get the existing tax rates extended. I hope we can do that sooner rather than later because I think the longer we wait, the greater we put at risk our economy and what could happen if we don't act.

So that is one component of the fiscal cliff. Obviously, there are other components.

Under the Budget Control Act, the spending authority of most Federal departments and agencies is going to be reduced on January 2, 2013, as a result of the sequestration. Now, the triggered reduction in spending is $1.2 trillion. After accounting for 18 percent in debt service savings, the required reductions amount to $984 billion to be distributed evenly over 9 years--in other words, $109.3 billion per year. So if we look at it year by year, that is $54.7 billion in reductions that will be necessary in both the defense and nondefense categories of the budget starting on January 2, 2013. It is expected that those cuts will range between 7 and 9 percent, but we believe the administration needs a plan for implementing sequestration, after a number of conflicting statements about how and if it will be carried out.

As one example of the conflicting statements coming out of the Obama administration, Defense Secretary Leon Panetta sent a letter to Senator McCain last November saying that the sequestration would not impact war funding. In April the OMB Controller testified before the House Budget Committee that the issue of whether war funding would be reduced by the sequester was still being evaluated. Just last week another official from the Office of Management and Budget said that war funding would, in fact, be impacted by the sequester.

It has been almost a full year since the Budget Control Act was passed, and Congress needs a precise understanding from this administration as to the full effects of sequestration on all programs and accounts across the Federal Government, including national security funding. That is why I have introduced a bill, along with Budget Committee ranking member Jeff Sessions, that would require the administration to bring some much needed transparency to the scheduled across-the-board spending cuts. Our legislation, S. 3228, the Sequestration Transparency Act, would require the administration to submit to Congress a detailed preview of the sequestration required by the Budget Control Act. Specifically, this bill would require the President to submit a report to Congress by July 9--next month--of 2012 that includes an estimate of the sequestration percentages and amounts necessary to achieve the required reduction for each spending category on an account level. The administration's report would also be required to include any other data and explanations that enhance the public's understanding of a sequester and actions to be taken under it.

This report will assist Congress in its yearend legislative business, including fiscal year 2013 appropriations and addressing the deep and unbalanced defense budget cuts that are expected under sequestration, which are in addition--in addition--to the $487 billion in reductions that were carried out last August.

Of course, we would not be in this situation had the Senate passed a serious budget over the last 3 years that addressed tax and entitlement reform. The Senate's failure to produce a budget year after year has left us with the Budget Control Act. Now the Budget Control Act is the law of the land.

While I am certainly disappointed that the President and the Joint Select Committee on Deficit Reduction failed to reach an agreement to bring down our deficits in the long term, the cuts to national defense that are scheduled to go into effect are particularly troubling. The President's own Defense Secretary warned that the sequester would ``hollow out the force and inflict serious damage to our national defense.'' That is from the President's own Defense Secretary. Yet, after repeated requests from both the House and the Senate, the administration has refused to provide even the most basic details about the cuts required by the sequester.

There is a great deal of uncertainty regarding sequestration and the tax increases that would occur the first of next year. At a time when our economy continues to grow at a very sluggish pace and unemployment remains above 8 percent, the last thing we need coming out of Washington is more uncertainty. Job creators are concerned about the pending fiscal cliff, and if Congress does not act before the election to deal with these issues, the economy will suffer from this uncertainty in the coming months.

The legislation I have introduced, along with Senator Sessions, requires the administration to share with Congress and with the American people their plan for exactly how the sequestration will be carried out. This is straightforward legislation. It is about transparency, and it is something where I hope my colleagues on both sides of the aisle will work to ensure that these numbers--this sequestration plan--are shared with the Congress and with the American people.

We have, as everybody knows, a big pileup occurring at the end of the year with sequestration. The pileup includes tax rate increases which will occur on marginal income tax rates, capital gains rates, dividend rates, the death taxes, the debt limit increase. All of these things happen at a time that will create incredible amounts of uncertainty in our economy. The best we can do for the American people, for our job creators, for investors, and for our small businesses is to provide as much certainty as is possible going into the end of this year. It seems to me, at least, that starts with ensuring that we have a plan coming out of the administration that specifically clarifies how this sequestration would be implemented so that Congress can react accordingly, hopefully before the end of the year and hopefully sometime in the next few months, perhaps as a part of our appropriations process this year.

With regard to the tax increases, I would make the same argument that former President Bill Clinton has been making, which is that we need to extend these tax rates. We create too much economic uncertainty out there by having this cloud on the horizon, which I think is a real warning sign to us, and it is a reminder that we get on a regular basis--frankly, for the most part, on a daily basis--when we talk to small businesses in our home States about the importance of addressing the tax, the regulatory, the spending, and debt issues before the end of the year when this big pileup would occur.

So I would argue for and plead with my colleagues to work together on the sequestration issue to ensure that it doesn't have the devastating impacts on our national security budget and that, combined with the tax increases, it doesn't have the devastating impact on our economy that is being predicted by the Congressional Budget Office. They have pointed out that if these things all happen at the end of the year, it could cost us 1.3 percent of economic growth, which, according to the President's own economic advisers, means about 1.3 million jobs for American workers. We already have chronic high unemployment now--40 consecutive months of unemployment above 8 percent. We have a sluggish, anemic economy. We shouldn't pile on top of that all this uncertainty with regard to taxes, with regard to regulations, with regard to what is going to happen regarding sequestration at the end of the year.

Again, this bill simply does not address in substance how we would change that, but it merely requests and requires the administration to provide to the Congress and the American people a clear plan about how they intend to implement sequestration in hopes that we might be able to make some necessary changes to ensure that the defense budget isn't gutted and that these adverse impacts on the economy are not felt by the American people and by our small businesses. I hope my colleagues will support this legislation and that we can get a vote on it very soon; that we can get the administration acting in a way that will inform not only us as Members of Congress but also the American public.

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

The following Senators are necessarily absent: the Senator from Wyoming (Mr. Enzi), the Senator from Texas (Mrs. Hutchison), the Senator from Illinois (Mr. Kirk), and the Senator from Arizona (Mr. Kyl).

Mr. President, I ask unanimous consent that I be allowed to speak as in morning business.

Mr. President, I rise today to recognize a former Member of this body and my long-time friend and mentor, Senator Jim Abdnor of South Dakota. Senator Abdnor passed away last Wednesday, May 16, 2012, in South Dakota in the company of friends and family.

We are both products of the dusty short-grass country just west of the Missouri River on the plains of central South Dakota. Jim was a product of the active and civically-minded political culture of Lyman County and I was from next door Jones County. Despite these counties' sports rivalries over the years, Jim took me under his wing and introduced me to the American political process. If not for Jim Abdnor, I would not be standing here today.

After a basketball game when I was a freshman in high school, Jim struck up a conversation with me that would change the course of my life. I went to work for Jim as a legislative assistant when he was a Senator and later at the Small Business Administration. When I first ran for office, Jim's guidance and support were invaluable to me.

This past weekend, hundreds of South Dakotans came out to honor Jim Abdnor and remember his great love for them and his state. His funeral was held in a Lutheran church in the shadow of the State capital in Pierre, where Jim first served in statewide office as Lieutenant Governor. Jim was buried just outside of his small hometown of Kennebec near where his immigrant father first homesteaded.

Mr. President, Jim leaves us with many legacies and I want to mention a few of them here today.

First and foremost, Jim's was an American story. It started as the tale of an immigrant who boarded a ship for the United States not even knowing the English language but knowing he was heading for the land of opportunity. That immigrant, Jim's father Sam Abdelnour, wanted to escape the growing authoritarianism of his native Lebanon, for American freedom.

Jim's story is also a frontier story. His father Sam settled in Lyman County, South Dakota. Sam Abdnor became a homesteader and planted corn and wheat. He also peddled his wares to the other farmers in the area and when Kennebec was organized as a town, Sam was one of the first people to establish a business on main street. Jim grew up learning how to balance the books in a small town store and knowing how to work the family farm. He learned financial responsibility and hard work and how one can climb the ladder of success in America.

Jim's story is also a story of the land and farming. Some of us who knew Jim through politics may forget that before he was elected to Congress Jim had owned and run the family farm for three decades. Jim was very proud of the fact that he was good at representing South Dakota agriculture because he was an active farmer who did the planting and hauled his grain to the elevator in the fall. When he was in Congress, South Dakota was ranked as the most agricultural state in the Nation and Jim was the first farmer elected to Congress from South Dakota. Jim was proud of that correlation and he never forgot his farming roots.

During the 1970s, when people were organizing sit-ins and teach-ins and other protests, Jim helped organize a ``beef-in.'' He brought 100 West River ranchers to Washington, DC, to talk about farm issues. They set up pens of cattle on the Washington mall and met with agriculture officials. Jim didn't rest until these ranchers had their voices heard.

Jim's story is also about water. We all live comfortably now with running water and hot showers, but that's not how Jim grew up. He grew up on his family's windy, dry-land farm in Lyman County. He lived through the droughts of the 1930s. He understood the importance of water. He never stopped working on the issues of water access-- including being a champion of the WEB water project in Walworth, Edmunds, and Brown counties in north central South Dakota that began in 1983.

The question of water was never far from Jim's mind and I think it had something to do with his heritage. That's certainly true of his Lyman County roots, which is where the humid Midwest begins to turn into the arid High Plains, but also of his roots in Lebanon, where water is also scarce. His family's home village of Ain Arab was founded because it was a watering hole. Ain Arab literally means ``spring'' or ``well.'' More specifically, it means ``spring of the Arab.'' When they had enough water in Ain Arab they would grow wheat, just like the Abdnors would do out in Lyman County.

Jim's is also a story about organizing. As soon as he came home from college, he started organizing Republicans in Lyman County and became head of the Lyman County Young Republicans. He helped organize and found the Elks lodge in Pierre in 1953. He joined every organization he could and he brought as many people into community affairs and politics and civic organizations as he could.

Jim also pushed other people to organize. He liked to tell the story of the people in Faith, SD, who wanted a new grandstand at their rodeo grounds. They took one look at the Federal regulations involved with some grant program and promptly did everything themselves, raising all the money they needed from local sources and fundraisers and did it at 10 percent of the cost. They put in 4,000 hours of their own time and made it happen themselves and Jim appreciated that. He liked communities working together to solve their own problems.

During the 1970s, when tensions in the Middle East worsened, Jim called for his fellow Arab-Americans to become more involved in the political process. He opposed what he saw as their tendency toward isolation and self-segregation. He said his ethnic compatriots should ``get out and mix.'' ``They should become more involved,'' he said, ``become part of the community.'' Jim never stopped believing in the importance of being involved and working with others to make life better.

This is why Jim had so many friends. He never stopped working to meet people and bring them together around issues and simply to socialize. A friend of mine says that he doesn't think anyone in the State of South Dakota has ever attended more weddings, graduations, ceremonial dinners, or basketball, baseball, and football games than Jim.

As someone from the wide open plains who wanted groups of people to come together to solve problems on their own, Jim was always resisting Federal encroachment on local control. As the son of a small businessman, Jim was sensitive to the growing encroachment of Federal regulations and how much this encroachment cost small businesses. For many years, Jim was especially incensed about OSHA mandating rules for small stores on South Dakota main streets. In the 1970s, Jim also had a big fight with OSHA because it was trying to mandate that South Dakota wheat farmers maintain porta-potties in the fields, which a practicing wheat farmer from Lyman County, South Dakota knew was the definition of absurd.

As a small businessman and farmer, Jim was always worried about the bottom line and he constantly tried to apply these concerns in the area of the Federal budget. Jim was sounding the alarm bell in the 1970s when the Federal Government spent less than $400 billion a year, which today seems laughably small given our current state of affairs. Back then, he was attacking deficits of $70 billion. He was also adamantly opposed to the Federal Government bailing out New York City in the 1970s because he said it would set a bad precedent. He attacked a Federal debt ceiling limit of $500 billion as being highly irresponsible. He criticized the fact that each American owed $2,000 because of the Federal Government's debt. Jim liked to quote the editor of the Freeman Courier, who asked ``how can it be that a government which is unable to balance its own budget and lives far beyond its means, has the authority to tell a businessman'' how to run his business.

Jim wasn't afraid to make hard votes to fix our problems, votes that probably cost him his Senate seat. But Jim Abdnor had the moral courage to make the tough decisions.

Mr. President, Jim Abdnor leaves us with a critical reminder. He embodied the American dream. He was the son of a poor Lebanese peddler who built a successful business and raised a great family, including a son who ascended the heights of American politics and became a U.S. Senator. Jim Abdnor shows how hard work and diligence can pay off.

On this occasion of remembrance and during this time of honoring my good friend Jim Abdnor, I hope we can remember our solemn duty to protect the American dream that the Abdnor family represented.

Mr. President, I yield the floor and suggest the absence of a quorum.

Mr. President, today I recognize Heather Jelen, a legal intern in my Washington, DC, office, for all the hard work she has done for me, my staff, and the State of South Dakota over the past year.

Heather is a graduate of Bethel University in Saint Paul, MN. Currently, she is attending George Washington University Law School in Washington, DC. She is a 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 Heather for all the fine work she has done and wish her continued success in the years to come.

I say to my colleague from Alabama, who is the ranking member on the Budget Committee, I got on the Budget Committee in this session of Congress and have been on it now for 2 years. We have not written a budget either year. So it sort of begs the question about whether the committee has any relevance around here anymore.

But to the point about spending and debt--we get down here and we talk about it. I think it has been interesting. The former Chairman of the Joint Chiefs of Staff, ADM Mike Mullen--who up until several months ago held that position--would come in front of Congress, in front of congressional committees, and say the greatest threat to America's national security is our national debt. There are a lot of external threats the United States faces. The world continues to be a dangerous place, with al-Qaida and the Iranian nuclear capability and China and North Korea. You can go right down the list. But for the top ranking military official in this country to come before Congress and say the greatest threat to America's national security is our national debt speaks volumes about what our priority ought to be. To think that we here in the Senate now for over 1,100 days have not passed a budget is pretty stunning in light of that reality; and also to say that somehow, because the Budget Control Act last summer passed, we did not need a budget misses the point.

The reason we had the Budget Control Act is because we did not pass a budget. The Budget Control Act is what you get when you do not pass a budget. You end up at the 11th hour having to put something together to deal with the issue of the debt limit, which is what we were dealing with at that time. It did put some caps on spending, but it does not do anything to deal with the long-term structural challenges facing this country, which is what a budget is designed to do.

The President submitted a budget this year, which would suggest he thought we ought to be working on a budget. The chairman of the Budget Committee, as my colleagues have mentioned, even called a Budget Committee markup, where we went there and said: Bring amendments. We went, we brought amendments, and we gave opening statements. We gaveled it out and said we are not going to do it.

So here we are again on the floor of the Senate without a budget, having to vote on other budgets presented by some of our colleagues, the House of Representatives, which passed a budget this year earlier, and the President's budget. To be fair, the President at least submitted a budget. It was a terrible budget if you are looking at the issues of spending and debt. In fact, I think the reason it got voted down 414 to nothing in the House of Representatives is because it added $11 trillion to the debt. It takes our total debt at the end of the 10- year period to $26 trillion and spends $47 trillion over the next 10 years and raises taxes by $2 trillion in a very fragile economy. It was a bad attempt, but at least it was an attempt. It was an attempt that yielded zero votes in the House of Representative, and it will be interesting to see if on the floor of the Senate today there will be any Democrats who will vote for their President's budget proposal.

But the point the Senator from Alabama and the Senator from Missouri make is a good one, and that is simply this: We have a responsibility under the law to spell out what we would do to get this country on a more sustainable fiscal path. That is something that is in the budget laws that the Senator from Alabama pointed out. Yet here we go on, year after year after year now--3 years in a row, over 1,100 days--without the Senate doing its job and passing a budget. That is significant for a lot of reasons, not the least of which is this is the fourth year in a row where we are going to have a trillion dollar deficit. Under this administration, you have the highest deficit, the second highest deficit, the third highest deficit, and the fourth highest deficit in history--4 consecutive years now of trillion dollar deficits.

But we are concerned about the economy. We need the economy to get growing again, to expand, to create jobs. That helps address all these things. What is interesting about it--and I know both my colleagues on the floor are well aware of this--there is a lot of research that has been done with regard to developed countries that start carrying these high debt loads. All the analysis suggests when you get a debt-to-GDP ratio of more than 90 percent, it costs you about a point to a point and a half of economic growth every single year. Well, in our country, a percentage point of economic growth means a million jobs. So our debt to GDP--which is now over 100 percent--means it is draining our economy of economic growth and, therefore, lots of jobs.

The Congressional Budget Office said about the President's budget, if his budget were to be enacted, it could cost us up to 2.2 percent of economic growth over the course of the next 10 years, which would amount to 2.2 million jobs. So we know the President's effort was not serious. He did at least put something out there. But we need a serious discussion in the Senate about a budget that will put us on a pathway not only to get spending and debt under control but to allow the economy to grow and expand and get Americans back to work. That is what is at stake here. That is why we believe we ought to have a budget. That is why we are going to have an exercise today where at least we get a chance to vote on some budgets as advanced by some of our colleagues in the House of Representatives as well as here in the Senate and the President's budget.

The fact is, this is the third year in a row where we have not followed the law and gone through the process of getting a budget here on the floor of the Senate. For our colleagues on the other side to suggest it is not necessary simply because the Budget Control Act was passed last summer not only is inconsistent with the law, but it begs the point about why did the President submit his budget, why did they call a Budget Committee markup in the first place? Clearly, somebody around here thinks we ought to be doing our job. But we are not doing it.

So I would hope, as we debate this issue today, at least we will put in front of the American people the arguments we think need to be made with regard to getting spending and debt under control, addressing the long-term, the mandatory side of the budget my colleague from Missouri, Senator Blunt, mentioned. That is where we know the money is. That is what nobody wants to deal with. We keep squeezing a little bit more out of the discretionary side of the budget. We have to take that on if we are going to save Social Security and Medicare and reform these entitlement programs. That is what a budget process would do. It does not take 60 votes under the law. It takes 51.

To come down here and say Republicans will filibuster again is completely out of whack with what we know to be the facts around here and the law; that is, that it takes 51 votes to pass a budget and a reconciliation bill that could possibly follow.

I appreciate the leadership of my colleague from Alabama as the ranking member on the Budget Committee. I look forward today, at least, for the chance for us to talk about a budget and what we ought to be doing for the future of this country since we do not have a budget on the floor of the Senate.

If the Senator will yield for a minute, I assume in Alabama and Missouri and I know in South Dakota our States pass budgets. It can be done. You can balance your budget. It would be nice if we had a requirement in the Constitution that would demand that the way many of our States do. Certainly, there doesn't seem to be the political will here to do it absent that. But it can be done, and hard decisions have to be made. South Dakota went through it last year, made some hard choices, our Governor, our legislature. Those are the types of hard decisions that are going to have to made here, but it takes a certain amount of political will and a willingness to make hard decisions. As the Senator from Alabama and the Senator from Missouri have both pointed out, there doesn't seem to be the willingness here to make those hard votes.

As has already been pointed out, the leader on the other side has said: What point is there in doing a budget? And the President of the United States and his folks, when they were asked whether the Senate ought to do a budget, said: Well, we don't have an opinion about that, which I think is really ironic coming from the leader of the free world about whether this country ought to have a budget to work with.

But that being said, as our time winds down here, to argue, as our colleagues have, that we don't need one misses the point. The Parliamentarian has ruled that the Budget Control Act was, in fact, not a budget. We need to do a budget here in the Senate. More importantly, the American people expect it and the taxpayers deserve it. That is why we ought to be having a debate on what we are going to vote for today, not what we are going to vote against.

It will be interesting to see if any of our colleagues on the other side vote for any of the budget proposals we put forward today, including the President of the United States; his budget will be voted on along with several other Republican budgets. I have a feeling we will be for some things. I have a feeling, as you said earlier, that they are not going to be for anything.

I ask for the yeas and nays.

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

Mr. President, in just 2 weeks, similar to many proud parents, I will be watching as my youngest daughter walks across the graduation stage. For some students, this important milestone marks the end of their college days and the beginning of a professional career. This achievement should be filled with hope for a great future, but for many it will be a story saddled with student loan debt and uncertainty about the economy, their job prospects, and their future.

As I have listened to many of my Democratic colleagues discussing the extension of a special interest rate for the subsidized Stafford loans, I continue to hear false statements that would lead one to believe Republicans don't support extending this interest rate for students. This is simply not true.

In my State of South Dakota, nearly 30,000 students received subsidized Stafford loans during the 2010 2011 school year. While I support alleviating financial pressure on students, I did not support the partisan legislation brought forward by Majority Leader Reid that would extend subsidized Stafford loans while raising taxes on some employers, not because the goal of the legislation is misguided but because the way the majority leader proposed to pay for the legislation is misguided.

Majority Leader Reid's legislation, similar to its Republican counterpart, would extend the special rate of 3.4 percent for subsidized Stafford loans that existed for the 2011 2012 school year to the 2012 and 2013 school year. I agree with the extension of this special rate and would simply ask the majority leader to allow a vote on the Republican alternative, which I might add, passed the House of Representatives by a bipartisan vote on April 27. I voted against moving to the majority leader's bill because I disagree on two grounds with the way my Democratic colleagues proposed to pay for the temporary 1-year extension.

First, I fundamentally disagree with the idea of a permanent tax increase on certain job creators to pay for a temporary 1-year extension. We are talking about permanent tax changes to pay for temporary spending. That is bad policy. I furthermore believe any discussion about raising taxes should be addressed in a comprehensive tax reform discussion, not in a student loan bill.

Second, I disagree with diverting the payroll tax revenue away from the Medicare and Social Security trust funds, where it would ordinarily be directed. We saw this done during the health care bill a couple years ago, where Medicare reductions and revenue increases that were supposed to go to

extend the lifespan of Medicare were, in fact, used to pay for new spending. We cannot continue to try to fool the American people that we are somehow extending the lifespan of Medicare when we are spending that money on new programs.

We are essentially double counting revenue and spending the same money twice. We cannot do that. We cannot do that anywhere else in the country, in this economy. Yet in Washington, DC, that has become the practice. What this would do is take changes in the Tax Code that would ordinarily go into the payroll tax fund or Medicare trust fund and now that is going to be used to pay for something else. This is a practice we cannot continue; we cannot sustain. We all know our trust funds are headed toward bankruptcy and continuing to raid them and use them for other purposes is simply a recipe for disaster.

I agree with the 37 business groups that wrote a letter to Leaders Reid and McConnell strongly opposing the $9 billion tax increase on small businesses proposed in the majority leader's legislation. These groups represent millions of employers, and they range from the National Federation of Independent Business to the Independent Community Bankers, to the National Restaurant Association. These 37 business groups all oppose the tax increases that would be included to pay to keep the interest rate at 3.4 percent.

I believe there could be bipartisan support for a proposal that has been put forward by Senators Enzi and Alexander, who are both leaders on education policy in the Senate. They proposed an alternative that pays for a temporary 1-year extension of a 3.4-percent interest rate by taking money from a slush fund created by ObamaCare in 2010. The President and Democrats have supported taking money from the slush fund in the past, so it seems odd that now they are suddenly up in arms in support of a slush fund that is supposedly aimed at prevention.

The President's own fiscal year 2013 budget proposal recommends using the prevention slush fund for other Federal priorities. My Democratic colleagues in the Senate supported taking $5 billion from the fund merely 11 weeks ago. So there is broad support for the idea of prevention, but the recent record of the use of prevention dollars shows these dollars are not being spent wisely. Funds in the prevention slush fund can be used on almost anything in the name of prevention and wellness. For example, jungle gyms, bike paths, farmers' markets, those are the types of things this so-called prevention slush fund is being used for. Keep in mind that in 2010, my Democratic colleagues used the $9 billion in savings in Federal student program aid to pay for part of ObamaCare instead of using that money to address the looming issue of the scheduled return to these higher interest rates on student loans.

It only seems rational and fitting to use the money that came from the student loan industry to address the interest rates for subsidized Stafford loans. At least it strikes me as very logical that since these funds were diverted from the student aid fund in the first place to pay for ObamaCare, we ought to recapture some of those funds to help keep student loan interest rates at the lower 3.4 percent level.

It is particularly interesting that the President suddenly has taken such a deep interest in this issue, when in 2007 he didn't even show up in the Senate to vote for the original legislation that created the temporary phased-down interest rate for subsidized Stafford loans. So despite the President's rhetoric, the greatest threat to young people looking for a job isn't the loan rates but the Obama economy.

This year's crop of college students looking for jobs is confronting an economy in which unemployment has remained above 8 percent for 39 straight months. A recent Associated Press report found that one out of every two recent graduates is jobless or underemployed within 1 year of finishing school. Graduates who are lucky enough to find a job will earn 9 percent less than if they had graduated just a few years ago.

A Gallup poll released this week gives even more bad news for young adults. According to Gallup, underemployment for 18- to 29-year-olds has hovered around 30 percent for most of the past year. Those graduates lucky enough to find employment are more likely to find jobs as waitresses and bartenders than as engineers, physicists, chemists, and mathematicians.

On Tuesday, the President was out touting his to-do list for Congress. That is particularly interesting since the President had 3\1/ 2\ years to put policies in place that would strengthen the economy. Here is what our graduates are getting. Here is what that Obama economy has brought about: Long-term unemployment is up 89 percent; the number of Americans who are on food stamps is up 45 percent; gas prices have doubled; college tuition is up 25 percent; worker health insurance costs are up 23 percent; and the Federal debt we are passing on to future generations is up 47 percent. The only thing that has gone down on his watch is home values, which is down 14 percent.

Our country and our college graduates have had enough of the Obama economy. Instead of the to-do list the President has put forward, we have a to-stop list for you. Stop job-killing regulations that are hurting our small businesses' ability to create jobs, stop trying to raise taxes on small businesses and job creators who are the people who are going to hire our college graduates, stop blocking the Keystone XL Pipeline which would help wean our country from the dependence we have on foreign sources of energy, and stop the divisive use of class warfare that does nothing but divide Americans.

It is time for the President and Congress to come to the realization that we have to shift our focus away from election-year standoffs and come together to focus on changing the course of our lagging economy so we can once again put our young people back to work, which is the real objective that should be our focus. These other issues, which are a lot of campaign gimmicks, a lot of opportunities to politicize this issue or that issue, are counterproductive in the long run. The floor of the Senate is being used, it seems more and more these days, to make campaign points, political points, rather than to address the fundamental issues that are affecting Americans and our economy.

I would hope we can come together to work in a constructive way on policies that will get Americans back to work, and that means doing something about these regulations which are crushing the ability of our small businesses to create jobs. We hear about it every single day.

When I travel my State of South Dakota or elsewhere around the country, I hear from businesses, the people out there trying to create jobs, about regulations, about taxes, about the cost of things, their inputs going up. Those are the issues we ought to be addressing. We ought to figure out how to reform the Tax Code, how to reduce Federal spending and reform the entitlement programs so we can save Social Security and Medicare.

We ought to look at what we can do to put in place a real all-the- above energy strategy that would help keep energy costs affordable for people out there creating jobs. In my view, those are the types of things on which we ought to be focusing.

Frankly, we have seen a lot of action and activity in the other body, in the House of Representatives, many bills they have sent to the Senate that are small business bills that would address these very issues, such as the high cost of regulations, the issue of taxation, the issue of energy independence--all these things that we believe would lead us toward a stronger economy that would get Americans back to work and offer more opportunity to young people, to our college graduates as they emerge from their programs of study this year and in years to come.

Yet we continue to have the rhetoric on the floor of the Senate suggesting that somehow Republicans are not in favor of keeping interest rates low for student loans. Think about that. It is illogical to even suggest that. However, we do have a fundamental difference of finance as to how we ought to pay for that. The other side suggests we could pay for that by raising taxes on people who create jobs.

We believe we ought to go back and take the funds out of the prevention slush fund, which in the first place was created out of dollars that were allegedly saved when the Federal Government took over the student loan program, which happened as a part of

ObamaCare. Not a lot of people realize that because it got buried in the whole debate over health care.

The student loan program, which used to be administered out of private lenders where they originated and serviced the loans, has now been taken over by the government. In doing so, savings were counted that were then used to pay for the cost of the health care bill. So all we are simply doing is saying the slush fund that was created by the funds that supposedly were saved by moving the student loan program into the government ought to be used for student loan fund programs to actually keep the funds that ought to be used to fund keeping the interest rate low, down at 3.4 percent for college students today. As I said, it seems very fitting to me, very logical, and very intuitive that would be the way we would fund this.

But to suggest for a minute that somehow Republicans in the Senate are not in favor of keeping interest rates at as low a rate as possible for our college students is completely missing the point. It is massive election-year politics, and I hope we can get away from that and focus on not only a solution in the near term with this issue but also the bigger issue.

The bigger issue is the fact that I just mentioned, that literally one-half of all college students who are coming out are either not finding jobs or are underemployed. Those who are finding jobs are making significantly less than those who graduated just a few years ago. That is an economic problem. That is a problem that needs to be addressed not by simply having a debate about student loans but what we are going to do to get this economy growing again and get American businesses creating jobs.

We need to make it less expensive and less difficult for American businesses to create jobs, not more expensive and more difficult, which is precisely what is happening as a result of the policies coming out of this administration in the form of regulations and many of the legislative initiatives that are coming out of the Congress or at least proposed to come out of the Senate.

I wish to work with my colleagues on solutions that will put Americans back to work and give our college graduates greater opportunity, greater hopes for a higher standard of living and higher quality of life, something many of us have inherited from those who came before us. These opportunities are increasingly at risk and in jeopardy because of the amount of spending and the amount of debt and the policies coming out of Washington that are making it increasingly difficult for us to come out from underneath an economy that has anemic growth and chronic high unemployment.

I yield the floor.