Floor Statements

Mr. President, today I recognize Katherine Wagner, 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 over the past several months.

Katherine is a graduate of Spearfish High School in Spearfish, SD. Currently, she is attending the University of South Dakota, where she is majoring in political science and mass communications. 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 Katherine for all of the fine work she has done and wish her continued success in the years to come.

Mr. President, today I recognize Tracy Rogers Zea, 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 over the past several months.

Tracy is a graduate of Seton Catholic High School in Chandler, AZ. He is a recent 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 would like to extend my sincere thanks and appreciation to Tracy for all of the fine work he has done and wish him continued success in the years to come.

Mr. President, I think the American people, when they voted this year, were saying one thing: We want to keep the main thing, the main thing. To the American people, the main thing is getting the economy growing again and creating jobs. Almost everything that has been done here in Congress in the last couple of years has been the exact opposite of that. You have seen policies put into place that increase the cost of doing business in this country and make it more difficult for small businesses to create jobs.

So here we are today debating what evidently has become the Democratic economic theory, which is to raise taxes to create jobs. We have seen this in play throughout the last couple of years. The cap- and-trade bill was a tax on energy. It didn't get through the Senate because we were prepared to stop it, but it passed in the House of Representatives and was headed here. The health care bill raised taxes on medical device manufacturers and drug companies and health insurance plans, all of which is going to get passed on to small businesses in the form of higher insurance premiums.

Here we are debating a frontal, direct tax increase on small businesses. It is the most astounding theory on how to create jobs I have ever seen--raising taxes to create jobs. That hasn't worked in practice. The Senator from Iowa eloquently pointed out that, historically, if you go back over the past half century, not only does it not create jobs, it doesn't generate additional revenue. As he pointed out, when you raise taxes, you don't get more revenue. When you lower taxes, you get more revenue. Why? Because it affects the behavior of the American people. It affects investors, it affects the allocation of capital, and it affects people across this country when they know their tax rates are going to be low.

This seems to me to be completely off the track and off the point that the American people want us to focus on, which is keeping the main thing, the main thing--how can we expand the economy and create jobs? We do that by keeping taxes low on small businesses, which, by the way, create two-thirds of the jobs in our economy.

What will be the impact of the proposal we will vote on today in terms of small businesses and their ability to create jobs? According to the nonpartisan Joint Tax Committee, half of small business income would be subject to higher taxes. That translates into 750,000 small businesses that would be faced with higher taxes. That also, incidentally, impacts about 25 percent of the workforce in this country.

How does that translate in real terms? When these taxes go up on January 1 for people who make more than $250,000 a year, who are probably paying the 33-percent or 35-percent marginal income tax rate today, their taxes will go up to 36 percent or 39.5 percent. If they are a family of four and they have personal exemptions, these phase out. There is a cap on the number of itemized deductions they can take. When that kicks in, their top marginal income tax rate could go up to 41 percent.

If you are a small business today that is paying at the 33-percent rate and you end up paying 41 percent as a result of this increase to take effect on January 1, you are looking at roughly a 25-percent decrease in your income. That is obviously going to increase the cost of doing business. When you increase the cost of doing business, it makes it that much harder for small businesses to invest, to make that new capital investment and buy that new piece of equipment or to hire that additional person, or hopefully additional people, in the workplace.

All they are simply doing here is trying to implement a failed policy that hasn't worked in the past and isn't going to work in the future. We have all the science and history and facts to support this. It is counterintuitive to the American people. How many people think the way to create jobs is to increase the cost of doing business in this country? When small businesses create two-thirds of the jobs in our economy, it is absolutely fundamental that you don't increase their cost of doing business. You don't raise taxes if your ultimate goal is to create jobs.

The best thing we can do for the high unemployment numbers and for the debate we are having about unemployment benefits being extended is to get people back to work. This is the exact opposite way of going about that. It is completely counterintuitive. Raising taxes to create jobs is a failed economic theory, and it has failed in practice.

I think if the Democrats' tax hike goes into effect--and make no mistake about it, I hear the other side talking about tax breaks and tax cuts. These are not tax breaks or tax cuts. Taxes are going up on January 1, pure and simple. That is all there is to it. Taxes are going up on income, on capital gains, on dividends, and they are going up on estates. If action isn't taken by the Congress, we are going to see the largest tax increase in American history.

The other side says: Well, let's cushion it. Let's limit to it those making more than $250,000. Of course, that affects a lot of LLCs, a lot of partnerships and subchapter S corporations, whose incomes flow through to their individual income tax returns and who will be faced with the higher income tax rates, not to mention the higher capital gains and higher dividend rates. These are the very people we are asking to pull us out of this recession and create jobs.

So where does that leave us? Well, we are going to have an alternative. The alternative would be that we just extend the tax relief, not raise taxes or the cost of doing business, and allow our businesses to prosper and to flourish and to create more jobs for the American people so we can get that 9.8 percent unemployment rate down and reduce the amount of unemployment benefits we have to come back periodically and approve.

We have 9.8 percent unemployment. We were told a year and a half ago--a little more than that, almost 2 years ago--when the stimulus bill was being debated, if we passed a $1 trillion stimulus bill, we could keep unemployment below 8 percent. That didn't work. Obviously, we borrowed $1 trillion to do that from our children and grandchildren, and what do we have to show for it? We have a 9.8-percent unemployment rate today and no apparent prospect for the economy to pull out of this sluggishness we are in.

The best way to accomplish that, the best way to make that happen, in my view and I think the view of the American people--and I speak as one individual who is under the $250,000 threshold--is to allow the people who create the jobs in this country, the people who make more than $250,000, to continue to do well. I hope they do because the small businesses, when they can increase their top-line sales and increase their revenues and increase their bottom-line profits, are going to be in a better position to create jobs. I get that, and I think the American people get that. That is why they so consistently voice their disapproval--and particularly the best poll that was taken was the election-day poll, where they came out in big numbers and voiced their disapproval of the policies in Washington, DC, that continue to kill jobs.

So I think we should be looking at what we can do not to kill jobs but to create jobs; what we can do to incentivize businesses to create jobs, not putting more burdens on them and increasing the cost of their doing business in this country. There isn't anything, in my view, that has happened in this last year, if you are concerned about creating jobs, that has been conducive to that.

There was a group of CEOs pulled in to visit with the President sometime last summer. When the President posed the question to them: Why are you CEOs and corporations not creating jobs, I will paraphrase this, but I think the answer, very simply, was: It is your agenda, Mr. President. That is the problem. We have an agenda here that is killing jobs because it is increasing the cost of doing business in this country.

It is a very simple proposition. I don't think it takes a lot to get it. That is why I think so many people are beginning to realize either of these proposals--the Baucus proposal or the Schumer proposal--are the wrong ways in which to approach an economic downturn in this country and the wrong way to get that economy back on track and get people back to work. The latest example of that was today in the New York Times.

In the latest sign how the tax issue continues to rankle

and divide Democrats, the White House said the administration

opposes raising the threshold to $1 million.

So we have the $250,000 vote that is going to occur and we have the $1 million vote that is going to occur, but what I wish to point out to everyone is, under the Schumer bill--which is the $1 million threshold--according to the Joint Tax Committee, that still impacts 350,000 small businesses in this country whose income flows through to their individual tax returns. So it is a question of whom do you want to raise taxes on, 750,000 small businesses with the Baucus amendment or 350,000 small businesses with the Schumer amendment.

Obviously, one is clearly better than the other, but the point simply is this: The economic theory we are debating about raising taxes to create jobs is the wrong one. It has been proven wrong historically. It is counterintuitive to anybody who knows anything about economics, which is why 60 percent of all prominent economists in this country say--and this was quoted by the Senator from Iowa today--the best way to create jobs, to grow and expand the

economy, is to extend these tax provisions that are going to expire on January 1.

That is what this debate is about. I hope we will keep the main thing for the American people and not get distracted on all these other things.

With that, Mr. President, I urge my colleagues to defeat both of these amendments.

I yield the floor.

Mr. President, I wish to acknowledge the remarks made earlier by my colleague from Utah whom I thought did a nice job of providing a history lesson for Members of the Senate about the past several years of tax policy and why we are where we are today. I don't think there is anybody here in this Chamber or any Senator from any State who doesn't acknowledge that we have a big problem right now with 9.8 percent unemployment.

We have a lot of things on which we agree in the Senate. We have a lot of things on which we disagree. I think the one thing we agree on is that 9.8 percent unemployment is unacceptable. I think the thing we disagree on is how we get that unemployment rate down. How do we create jobs? How do we get people in this country back to work?

There has been a lot of discussion about various issues that might be dealt with here in the Senate before the end of the year, most of which don't deal with this fundamental issue. The fundamental issue that is important to most Americans--and I have heard many of my colleagues get up and talk about people who are hurting. They are hurting.

We are going into a holiday season with a lot of people unemployed, and with the numbers that came out this morning, that number got worse. We have more people unemployed, more people hurting economically. Yet in the waning days of this legislative session before the holiday break and before a new Congress gets seated next year, we have had discussion and motions about the DREAM Act. We had motions about don't ask, don't tell. We talked a lot about getting the START treaty done before next year. There has been discussion about this Public Safety Unionization Act. I think all of these things are probably important to certain Members of the Senate but none of which are as important to the American people as the point I just mentioned; that is, 9.8 percent unemployment.

People are hurting. People have lost jobs in this country. That is the fundamental point that I think drove voters out to the polls in November. They want the Congress to focus exclusively on fixing this economy and getting people back to work. Yet we came back here in December and spent 7 days here in the Senate on a food safety bill--not that that is not an important issue. It is an important issue, but is it as important as dealing with this number I just mentioned--9.8 percent unemployment?

The irony about the food safety bill is that after we spent 7 days on it, we had a little snafu. It went over to the House of Representatives and somebody blue-slipped it, which is something they have the prerogative to do, because it turns out there were revenue increases in that bill, and revenue measures have to originate in the House of Representatives. So that bill, for all intents and purposes, is dead for the rest of this Congress.

So we spent 7 days here in the Senate on the food safety bill. Now we are talking about doing something on unemployment, which is something we should have been talking about. We all knew that the deadline was coming and that it was ahead of us. We have these tax rate increases that occur on January 1 of this year, which is something we should have been focused on. It is not any secret that, as the Senator from Utah pointed out, the tax laws we have today have been the tax laws now for the better part of a decade. So if we knew they were going to expire on December 31 of this year, that wasn't a secret. Many of us here have been advocating for some time for a permanent extension of those tax rates, but that wasn't acted on. There weren't opportunities--or at least the Democratic leadership, since they have been in charge here, has had no appetite to deal with doing something about a permanent extension of those tax policies. We have had tax extenders we have been talking about for the last year, but nothing has happened. We had tax policies that expired on December 31 of last year which haven't been extended yet. We have a whole bunch more in addition to the 2001 and 2003 tax laws that expire at the end of this year, all of

which impact some sector of our economy and most of which are very important to job creation. Yet for the better part of this year, what we talked about were issues that arguably the other side wanted to put before the Senate.

We had a stimulus bill which borrowed $1 trillion from our children and grandchildren which supposedly was going to keep unemployment under 8 percent. We all know that obviously didn't work. We had a massive expansion of health care, which is going to spend, when it is fully implemented, $2.5 trillion. We have had debate about financial services reform. I am not saying that any of these are unimportant issues. All of them involve new spending, creation of new government, new bureaucracies, and at the same time ignored what I think is the fundamental issue, which is jobs and the economy. That is what we have heard repeatedly.

Now, the reason I think so many people turned out at the polls in November was because they were very concerned about what has been happening in Washington, and they wanted to come out and protest the policies that were coming out of Washington, DC, because they thought they were counterproductive in terms of the ultimate goal of creating jobs and expanding the economy and getting people back to work. Yet we didn't have a discussion during the entire lead-up, runup to the elections about getting these, with the exception of efforts on our side to get amendments on the floor, about these expiring tax rates.

We do have taxes going up on January 1 on income, on capital gains, on dividends, on estates. You can go right down the list. There isn't anything in any sector of our economy that isn't going to experience higher taxes on January 1.

In fact, it was interesting. This was a U.S. News and World Report article from yesterday, a story in there that said:

Failure by Congress to extend the Bush tax cuts, especially

locking in the 15 percent capital gains tax rate, will spark

a stock market sell off starting December 15 as investors

move to lock in gains at a lower rate than the 20 percent it

would jump to next year, warn analysts.

It goes on to say:

``Capital gains tax rate will increase from 15 to 20

percent if the tax cuts are not extended. The last time the

capital gains tax rate increased--on January 1, 1987, from 20

to 28 percent--investors realized their gains at the lower

tax rate,'' said Daniel Clifton, a Washington partner at

Strategas Research Partners. ``We would expect a similar

effect this time around as investors see the tax rate going

up and choose to realize gains and incur the [lower] 15

percent tax.

In a memo to clients, [this particular firm] says that the

date most clients are focused on is December 15 for a deal in

Congress before beginning to sell. One reason: Many stock

options expire that day and investors have to act.

. . . Fixing this issue next year will not negate these

negative impacts.

If they say we are going to put this off until next year, a lot of folks will say: I don't trust these guys; they haven't done anything with this yet. They are going to sell off, and that could have a very destructive impact on the market and on many people's gains and things that have been acquired this year, stocks and investments. It is unclear how bad the selloff would be, it says. But it could wipe out all of this year's gains.

That is one reason out of many that we need to act to address this important issue before the end of the year. It is fair to say, as well, that contrary to what has been espoused by the other side about people getting tax cuts, a lot of people are going to get tax increases. This has been tax law for the better part of a decade. A lot of it was put into effect in 2001 and some in 2003. So these tax cuts we have in effect today on capital gains dividends, marginal income tax rates have been in effect for many years now. What we are going to experience on January 1 is not a tax cut but a tax increase on a lot of people in our economy.

The argument was made throughout the course of the year that we need to allow the tax cuts to expire for people above $250,000. Of course, we pointed out that half of all small business income would be taxed at a higher rate if we allow those to expire for people above $250,000, and 25 percent of the workforce would be impacted. I think that was a view that was shared by the American public.

There was a CNN poll that I have here that was done in September, where 60 percent of Americans said all the tax cuts put in effect many years ago ought to be extended for everybody. I think that was a view shared by people when they voted during the election.

I remember campaigning for people across this country--Senate candidates and House candidates--and this was a landslide election, a watershed election, by American standards. If we look at the number of new Members in the House, I think Republicans have 83 or 87 new Members, and there are a number of new Senators. In all of those campaigns, and in all of the advertising I saw, in all of the speeches I heard from candidates in traveling around the country, I didn't hear any of them say: I want you guys to go back, when you get to Washington, and deal with this food safety issue or we want you to pass the DREAM Act. I didn't hear anybody say: We want you to go back and address this issue of don't ask, don't tell. I didn't hear anybody say: We want you to go back and pass the START treaty.

These are all important issues. But, remember, that is not what the American people are concerned about. Certainly, these are important, but not the most important we should concern ourselves with, which is the 9.8 percent unemployment rate and the fact that a lot of people are hurting and don't have jobs in this country. I think the issue of extending unemployment benefits, which will be dealt with--and for how long, I am not sure--is, is it paid for? I believe it should be; some don't. In any case, I think that will be dealt with.

That is a symptom; that is not the cause. The cause for people hurting in this country is that we have policies in place that are making it more difficult for small businesses to create jobs.

The best solution for the American people is a job, to get people back to work. Raising taxes has never been a way of creating jobs. Now, the $250,000 threshold I think the other side concluded was not good politics. So it has been tested and polled, and that is a losing issue. It does impact so many small businesses.

So the latest version is to raise that to $1 million, and that is a vote we are going to have sometime tomorrow.

The fundamental point I am making is, I think the American people understand that to grow the economy, expand the economy, and create jobs, we have to incentivize the job creators to create jobs. We can't do that by raising their taxes. We can't do it by passing new regulations and making it more difficult and costly for them to do business. That is basically what this whole past year has been about. My counterparts on the other side have attacked Republicans on the floor for the situation we are in, saying: Republicans are blocking us from dealing with all these important issues.

We did send a letter this week, signed by all 42 Republicans, and the letter was simple. The message was this: Yes, we think there are a few days left in this legislative session, and we ought to use those days to focus on the things the American people care about. Notwithstanding any of the polls we are taking today, the best poll was election day. What people voted on on election day was jobs, the economy, reducing spending, and debt. The letter we put forward said let's focus on the tax issue and get that resolved. It is so important to our economy and it provides certainty for job creators to create jobs. Let's focus on funding the government and dealing with this issue of spending.

Those are the two most important issues, as I think was expressed at the ballot box by people across this country this year. Then, if you want to move to other issues, fine. We had 42 Republicans who said that. I think that is perfectly appropriate and in accordance with what the American people want us to do.

As I said earlier, we spent 7 days on food safety, which is arguably an important issue. I am not discounting that. That was 7 days spent on a piece of legislation that went to the House, was blue-slipped, and is not going to become law this year. We lost 7 days that we could have been talking about getting tax rates down for middle-income taxpayers and investors. We could have dealt with the issue of the death tax because on January 1 the exemption for the death tax comes down

to $1 million, and the top rate goes up to 55 percent.

I have heard repeatedly from farmers, ranchers, and small businesses in my State the concerns they have about that. What are they going to be able to do if they want to pass on their business or their operation to the next generation, and if they have a $1 million threshold and anything above that, that would be taxed at 55 percent, that means many of them will be forced to liquidate their holdings in order to pay the IRS. That doesn't seem like a very good way to run a government or create jobs in the economy.

Again, I simply point that out as the reason I think in these waning days of this session that Congress should focus on this 9.8-percent unemployment rate. The unemployment debate, the debate about unemployment benefits which will occur here is a symptom of the high unemployment rate. But the cause of the high unemployment rate is the fact that the policies coming out of Washington, DC, are not conducive to job creation in this country. It doesn't have anything to do with these Bush tax rates because, frankly, we saw a lot of economic growth in the early part of this decade.

Since 2008, we have been in a recession. Since 2008 we have had a President in the White House and a huge Democratic majority in both Houses of Congress which have attempted to address this issue in the form of a stimulus bill which added trillions of dollars to the debt but didn't reduce unemployment. It created 250,000 new jobs in Washington, DC. The food safety bill, according to estimates, would create another 17,000 jobs in Washington, DC. So almost anything that has been done hasn't created private sector jobs but has created a lot of government jobs.

That is not what people want. They want jobs in the economy. They want the small businesses on their Main Streets and in towns and communities to be able to invest, be able to hire that new employee, or buy that new piece of equipment, add to the productivity of their operation in a way that will expand the economy, grow the economy, and create jobs for more Americans. I think that was the message of the election. I think that is the interest of the American people still. It is not on all these other things.

I understand there is a need sometimes for political parties to check the box to say they have done this or tried to do that for a particular constituency. That is perhaps what drives the reason we have to have votes on some of these other issues. But at the end of the day, it comes down to one simple basic fundamental fact: A lot of people are unemployed, hurting, and the policies of Washington, DC, are contributing to that. I think you can't blame Republicans in the Congress where for the last 2 years the Democrats have had huge majorities. In the Senate, they have 58 votes now, and they had 60 votes for 2009. They had 250 votes in the House of Representatives. They had the White House. Yet here we are 2 years later and unemployment has actually gone up. We have fewer people finding jobs in this country and an economy that continues to struggle and Washington, DC, that seems more intent on dealing with all these issues that are unrelated to the fundamental issue, which is creating jobs and getting people back to work.

Mr. President, I urge my colleagues, as we head into the end of the year to stay focused on the issues the American people care about-- jobs, the economy, their ability to pay their bills, and to hopefully save a little money for their children's college education. As we head into the holiday season, they want to have a good holiday season with their families. But this idea that somehow the way we help the American people in this country is by focusing on these unrelated issues, and talking about things that they at this particular point in time are not particularly concerned about, strikes me as missing the point and not having gotten the message the voters sent in November of this year.

Again, I urge my colleagues in these last few days to work on keeping taxes low on all Americans, extending the tax relief. It is not a tax cut. It will be a tax increase starting January 1 for people across this country, including the job creators. We cannot allow that to happen for the best interests of the American people.

I yield the floor.

Madam President, I wish to engage my colleagues Senator Dodd and Senator Begich in colloquy.

I rise today in support of S. 3987, the Red Flag Program Clarification Act of 2010, legislation that Senator Begich and I have introduced to narrow the scope of section 114 of the Fair and Accurate Credit Transactions Act of 2003--the FACT Act. This section of the FACT Act directed financial regulatory agencies, including the Federal Trade Commission, FTC, to promulgate rules requiring ``creditors'' and ``financial institutions'' to implement programs to detect and respond to red flags--patterns, practices, or specific activities--that could indicate identity theft.

The purpose of the Red Flag Program Clarification Act of 2010 is to identify and limit the type of ``creditor'' that must be covered. If the FTC's final red flags rule is implemented, this rule could require small businesses to undertake costly, burdensome measures to prevent identity theft in industries where it poses little threat. Identity theft is a serious problem, but the definition of ``creditor'' for purposes of the FTC's red flags rule is too broad and would cover small businesses that pose little risk to consumers.

Under the legislation that Senator Begich and I are proposing, only a ``creditor'' that regularly and in the ordinary course of its business obtains or uses consumer reports in connection with a credit transaction, furnishes information to consumer reporting agencies in connection with a credit transaction, or advances funds would be required to develop and implement a written identity theft prevention and detection program.

So, for example, an accountant would not become a creditor simply for obtaining a consumer report--with the permission of any consumer whose report is obtained--in order to examine the integrity of a company's management.

And the legislation makes clear that an advance of funds does not include a creditor's payment in advance for fees, materials, or services that are incidental to the creditor's ability to provide another service that a person initiated or requested, such as the advance payment of expert witness fees by a lawyer to support the representation of a client.

Any other type of creditor may only be covered through a rulemaking based upon an agency's determination that these types of creditors offer or maintain accounts that pose a reasonably foreseeable risk of identity theft. Such creditors would receive notice that they could be covered by a rule, and there would be a public airing of the issues when the proposed rule is published for notice and comment.

Could Senator Dodd, as chairman of the committee of jurisdiction, the Senate Banking Committee, provide us with some context regarding the legislation under which the FTC's rule was promulgated?

I applaud the FTC's cooperation in delaying implementation of their red flags rule to wait for congressional clarification on this issue and thank Senator Dodd for his assistance in drafting this legislation. I am confident that our efforts to provide a legislative solution that protects consumers and businesses alike can be achieved through this legislation.

Mr. President, I ask unanimous consent to be added as a cosponsor of the Johanns amendment No. 4702 to S. 510, the Food Safety Modernization Act.

Mr. President, I compliment the Senator from Nebraska for his leadership on this issue. He has done a great job advocating on behalf of small businesses, farmers, ranchers, and all the people to be impacted by this onerous provision in the health care bill.

I fear this is something we are going to be doing and repeating quite frequently in the years ahead as more Americans find out what is in the Democrats' health care bill. This is egregious because it requires various entities to send suppliers 1099 forms if they engage in business-to-business transactions totaling more than $600 in a single year.

While I believe everyone ought to pay their fair share of taxes, I am concerned that the burden of compliance falls not on the tax delinquents but instead on the countless businesses, churches, local governments, and nonprofits that pay their taxes on time and in full or may not even have a tax liability.

This means these entities will have less time to fulfill their core missions, whether that is building products, administering to the poor, helping students learn or building local infrastructure. Instead, they are going to be filling out form after form to become compliant with this measure.

Because of the heavy compliance costs associated with this measure, its repeal is supported by a wide variety of business organizations and agricultural organizations across the country, including the Chamber of Commerce, National Federation of Independent Business, and the American Farm Bureau, to name a few.

It is not just national organizations that I have heard from. In numerous constituent meetings across South Dakota, I have heard from the citizens of South Dakota, whether they be farmers, ranchers, small businesses, CPAs, and others, about the effect this measure would have on them, their businesses, and their employees.

While this requirement is not set to take effect until next year, I believe it is important we act now to give these types of entities certainty that they will not have to take steps to comply with this measure.

I add that our government now has a debt that is approaching $14 trillion, and we need to do everything we can to make sure that debt does not increase. It is a debt that we continue to pile on more and more and hand to the next generation of Americans.

Because of that concern, I am pleased this amendment is fully offset by rescinding unspent Federal funds. The Senator from Nebraska came up with a way, through rescinding unspent Federal funds, to offset this amendment in a commonsense way. Of course, it excepts the Department of Defense and Department of Veterans Affairs, which will protect our national security interests and those who have served our country. I believe the rescissions he calls for in unspent Federal funds are a good way to make sure this doesn't add to our debt. This amendment perfectly captures that belief, and I think it is a belief that is shared by many of my colleagues in the Senate and by citizens across this country.

We need to be focused on bringing down our debt, and we will start doing that by eliminating government spending, not putting new, burdensome requirements on businesses and charities.

Unfortunately, there were numerous other provisions in the health care bill and other bills in the past 2 years which shifted the burden onto small businesses and employers. We will have to revisit each of those to ensure they don't slow economic growth and job creation, which is what the people want us to be focused on now.

I hope we can take this first step and support the Senator from Nebraska on his amendment, which addresses this critical issue, this egregious provision that puts a costly burden on small businesses, and do it in a way that is fiscally responsible and doesn't add to the debt and burden future generations with more debt.

I think the Senator from Nebraska came up with a great solution. I hope colleagues on both sides of the aisle--Republicans and Democrats-- who have heard, as I have, from their constituents will take this very commonsense amendment and pass it with a big margin. Let's get this particular provision in the health care bill repealed and the negative impact it would have on economic growth and job creation in this country.

With that, I withhold the remainder of my time.

Mr. President, today I wish to recognize Norbert Sebade as he celebrates his retirement after 43 years of extraordinary service in the banking community. Norbert is ending a career marked by outstanding community service and longstanding dedication to economic growth and development in the Black Hills through his numerous leadership roles in the banking field and beyond.

Norbert began his banking career in Madison, SD, in the summer of 1967. He quickly distinguished himself as a leader in the industry. Norbert has served as the former President of First Western Bank Wall, former chairman of the board of First Western Bank Custer, vice chairman of the board First Western Bank Sturgis, former board member of South Dakota Bankers Association, SDBA, Insurance Services, former chairman of South Dakota Rural Enterprise, and an appointee to the West River Economic Development Coalition. Additionally, Norbert has focused his attention and energy on the well-being of his communities in other ways, serving as a trustee and former chairman of the Rapid City Regional Hospital, a trustee for the Black Hills State University Foundation in Spearfish, and a board member of the South Dakota Community Foundation. He retires today as the regional president of First Interstate Bank of the Southern Hills.

I would like to thank Norbert for his commitment to South Dakota's communities and congratulate him on a well-deserved retirement.

Mr. President, today I recognize Michael and Emily Beck of Keystone, SD, as my nominees for the 2010 Angels in Adoption Award. Since 1999, the Angels in Adoption program through the Congressional Coalition on Adoption Institute has honored more than 1,600 individuals, couples, and organizations nationwide for their work in providing children with loving, stable homes.

Michael and Emily Beck were high school sweethearts, and decided early in their relationship that they would eventually start a family through adoption. The Becks have done exactly that through the adoption of four children. Tehya, 6, was adopted when she was just a baby, and this year the Beck family grew by three more. In July, Michael and Emily finalized the adoption of their foster children, John, 7, and his sisters, Emily, 5, and Shyanne, 4. Michael and Emily worked diligently to reunite John, Emily, and Shyanne who had been separated in the foster system.

I admire the Beck's desire to promote foster care and advocate adoption as a way of life. A significant driving force behind their philosophy on adoption is their belief in the call God has placed upon His family to care for those who have no family to care for them. The Beck's goal is to provide permanency--a stable home and loving family-- for children who can often spend their entire childhood in the foster care system.

The Becks also exemplify selfless service to our Nation. Michael and Emily both serve our country through the Army National Guard, and Michael has orders to deploy to the Middle East in 2011.

As a father myself, I can speak to the sacrifices that parents willingly make for the well-being of their children. It is apparent through their stories that Michael and Emily make significant sacrifices to provide for their children and find joy in the small accomplishments of parenting. Michael and Emily are committed to providing a promising and loving future for their family.

National Adoption Day this year is November 20, 2010, and I can think of no better family to serve as a role model for others who seek to adopt than Michael and Emily Beck, my nominees for the 2010 Angels in Adoption Award.

Mr. President, I ask unanimous consent to call up my amendment No. 4676 and ask that it be made pending.

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

Mr. President, as you know, the budget-appropriations process has broken down. Neither the House nor the Senate passed a budget resolution which provides a basic roadmap for our spending decisions for the next fiscal year.

As a result of not having a budget, not a single appropriations bill has been signed into law for the new fiscal year that starts tomorrow at midnight. The House has passed only 2 of its 12 appropriations bills. Unfortunately, this 17-percent batting average, 17-percent success rate surpasses the Senate which has failed to pass any of the 12 appropriations bills.

Because of this, we find ourselves considering a measure to provide stopgap funding through December 3 to provide more time for completion of our annual appropriations bills.

This delay and lack of floor debate on any of the annual appropriations bills has prevented us from having a much needed debate on the size of government and the amount of money we should be spending.

Keep in mind, the overall growth in nondefense spending since 2008 has amounted to roughly 21 percent at a time when inflation has amounted to only 3.5 percent. This excludes any mention of the $814 billion stimulus bill.

The continuing resolution before us today seeks to provide funding at the same rate as fiscal year 2010. I will say that I am somewhat pleased to see that my colleagues on the other side of the aisle have not attempted to add other funding measures to this measure. That is commendable that we at least are going to do a continuing resolution that is relatively speaking clean. It would be my preference to dial back the overall spending level to the fiscal year 2008 levels.

I have introduced legislation that will do just that, as have some of my colleagues. Senator Inhofe from Oklahoma has a bill that will do that. Some of my House colleagues have come up with a similar proposal that will do that. I guess I would say to my colleague from Oklahoma who just got up and spoke and mentioned this amendment probably does not go far enough that I do not disagree. Frankly, I would like to see us go back to the 2008 levels.

What I am trying to do today is seek the support of my colleagues to at least take a measured step in reducing discretionary spending. My amendment simply seeks to reduce by 5 percent accounts not related to defense, homeland security, or veterans. This would not affect funding for the START treaty or any of the other new provisions in this continuing resolution.

On an annualized rate, it would, however, save us about $22 billion compared to the $1.25 trillion score that CBO has provided for the proposed continuing resolution before us today.

While this is a modest number and it is not going to solve our debt problems overnight, it is a necessary first step to reduce spending. Since nondefense discretionary spending has grown over 21 percent in the last 2 years--again, at a time when inflation was only 3.5 percent--I think the least we can do is support this reasonable reduction until we return after the election to decide what the remaining funding level should be for the fiscal year 2011 spending bills.

To put things into context as my colleague from Oklahoma, who just finished speaking, has done, we are looking at a $13.4 trillion debt. Our deficit for 2010 is estimated to be $1.3 trillion. About 40 cents out of every dollar that is spent in Washington, DC, by the Federal Government now is borrowed.

If we look at the last 34 years, there have only been four times--4 years--where all the appropriations bills have been passed on schedule.

If we actually did go to a freeze at 2008 spending levels and index it for inflation, it would save $450 billion over 10 years. That makes a lot of sense.

As I said, that is legislation I introduced earlier. At a minimum, what we ought to be able to do is say to the American people, at a time when many of their family budgets are shrinking, at a time when they are trying to make ends meet, that we get it. In Washington, DC, we understand: You want our Federal Government to do with a little bit less.

What I am proposing is a 5-percent haircut; that is all, 5 percent. That is the least we can do for the American people at a time when, as I said, we are running these $1.3 trillion deficits and have future generations of Americans faced with a massive amount of debt that will be on their backs for generations to come.

I hope today we can find the political will in the Senate to take what I think is a very modest, a very measured approach to reduce spending in this continuing resolution by 5 percent. When we come back in December, we can have a full-blown debate about what the size of government should be, which we should be having now and should have been having throughout the course of these last few months when these appropriations bills should have been debated and should have passed a budget.

That being said, we do not have a budget. We have not passed appropriations bills. We are where we are. The least we can do, in fairness to the American people, the taxpayers of this country, is send a clear message to them that we are going to do a modest amount, at least a 5-percent reduction over last year's level in this continuing resolution and try in a very small way to get some of the overspending that is occurring in Washington, DC, under control.

Mr. President, 21 percent over the past 2 years at a time when the inflation rate was 3.5 percent, meaning that we are spending at the Federal level five to six times the rate of inflation, what the rate of price increases are across this country for most Americans. That is not fair to the American taxpayers. I hope my colleagues will support this amendment.

The Senator from Massachusetts is here. I believe he wants to speak as well to this issue and to this amendment. I yield as much time to him as he may consume.

Mr. President, before the Senator from Massachusetts yields the floor, will he yield for a question?

I ask the Senator from Massachusetts if he is hearing from his constituents back in his State the same message I hear from my constituents in South Dakota; that is, we are experiencing economic difficulties. In this economic downturn, many people lost jobs, many had a loss of income, many family budgets are being squeezed.

Does not the Senator from Massachusetts hear the same thing from his constituents I hear from South Dakotans; that is, we want the Federal Government to lead by example, and rather than growing at four, five, six times the rate of inflation, actually take some steps to get its spending under control in the same fashion, the same way we are having to do it?

That is what I hear from people in South Dakota. They are tired. They think the Federal Government is growing too fast, has gotten too big. They think it is a runaway train, especially when it is running $1.3 trillion annual deficits.

I think 5 percent on this particular continuing resolution, this funding bill is a modest amount that at least most of my constituents would think is reasonable.

I ask the Senator from Massachusetts if he thinks his constituents believe this Federal Government could live with 5 percent less at a time when they are living with a lot less in many circumstances?

Mr. President, if I might just say to the Senator from Massachusetts, again, I appreciate his willingness to come down here and express his support for this amendment. The Senator from South Carolina is here. I expect he will speak too. He has an amendment he would like to offer as well.

Most Americans believe government spends too much, especially at a time when their budgets, as I said, have been shrinking.

This is the kind of amendment that ought to attract broad bipartisan support. We are going to fund the government with this continuing resolution until December 3 because, again, we have not passed any appropriations bills or a budget--which, by the way is a discussion, perhaps, for another day but one that I think needs to be joined, a debate that needs to be joined, and that is, what are we going to do to fix this broken-down budget process that year after year puts us in a position where, at the very end of the fiscal year, we have to pass a continuing resolution because we have not gotten our work done? That is an incredibly strange way to run a $3.5 trillion enterprise like the Federal Government.

I think the American people deserve better. They need a budget process that has some teeth in it, that is binding, that makes sense, where there is an appropriate role for oversight, as the Senator from Oklahoma pointed out--all the agencies where there is duplication and redundancy where we can find savings. We don't do a lot of that around here because we have a budget process that has broken down.

I have a bill to reform the budget process which, again, I hope is something we can undertake. It is not going to happen now because we are going to wrap things up here this week, it seems. I would be happy to stay around and talk about budget reform, but I think a lot of my colleagues have other things and other places they want to go.

In the meantime, let's at least do something here that will rein in Federal spending and send a very important message and signal to the American people, who have been hurting: The Federal Government here in Washington doesn't live in a bubble, we actually get it, we are listening to the voices of the American people, and we can find a mere 5 percent in our Federal budget, this massive Federal budget, and demonstrate we are willing to tighten our belt a little bit, consistent with what is happening to the American people and the experience they are having in this economic downturn.

I reserve the remainder of my time. I do not know how much time I have left, but I reserve the remainder of my time on this amendment.

Mr. President, reserving the right to object, and I will not object if the Senator from Washington would substitute the language which is at the desk which extends all the things she has talked about this evening, as well as provides a 2-year extension for the physician fee issue which is expiring on November 30, but does it with spending reductions as opposed to tax increases. That amendment is at the desk, and if the Senator from Washington would substitute that language for her amendment, I will not object.

I object.

I would say to the Senator from Washington through the Chair that I would be happy to take a look at this and run it by my colleagues. Obviously, this is not something I think everybody--there isn't

anybody here right now--has had an opportunity to look at. We have tried repeatedly to get some cooperation on an extenders package that includes a number of important tax provisions that have expired already, as well as some that are set to expire, and to do that through offsets that reduce spending as opposed to raising taxes, particularly at a time when the economy is in recession.

So as much as I would agree with the Senator from Washington that this is an important issue that needs to be addressed--and it is important to my State--I would have to object until we have an opportunity to look at the amendment that the Senator from Washington put forward.

Mr. President, today I wish to recognize the 3rd Recon Association. The 3rd Recon Association is a nonprofit veteran's organization made

up of marines and Navy corpsmen who served in the 3rd Reconnaissance Battalion, in dedication to their involvement in the Republic of Vietnam from 1961 through 1971. The 3rd Recon Association was formed to honor the brotherhood they forged in Vietnam and to remember those who gave the ultimate sacrifice.

Today I not only honor the dedication and sacrifice of these noble Americans, but also commemorate their association's 2010 Reunion, to be held October 13-17, in Lead/Deadwood, SD. ``Swift, Silent, and Deadwood'' is an event properly named after the reconnaissance motto ``Celer-Silens-Mortalis'': ``Swift-Silent-Deadly.'' This 4 day event will feature memorial services and social events, along with company and auxiliary meetings.

I voice my most heartfelt and sincere thanks to the members of the 3rd Recon Association for their sacrifice and service to our country. I would like to welcome them to the great State of South Dakota, and wish them the best for their 2010 reunion and in all future endeavors.

Mr. President, today I wish to recognize the South Dakota Air National Guard's 114th Fighter Wing. This elite group has been awarded the National Guard Bureau's Maj. Gen. Winston P. Wilson trophy, honoring them as the best Air National Guard fighter unit in the Nation. I am proud that the 114th ``Fightin' Lobos'' have brought this great honor back to South Dakota, having also won it in 1981, 1983, and 2007.

The National Bureau's Maj. Gen. Winston P. Wilson trophy is given to the most outstanding unit equipped with jet fighter or reconnaissance aircraft. The award is named for a former chief of the National Guard Bureau credited with ensuring readiness of Guard units to join regular forces on overseas missions.

The squadron was formed in 1946, when Joseph J. ``Joe'' Foss, a Medal of Honor winner and Marine Ace, was appointed to form a South Dakota Air National Guard squadron to help recruit and train flight crews. Since then, the unit has served as part of the Air Expeditionary Force, and actively supported Operation Noble Eagle, Operations Enduring Freedom, Iraqi Freedom, and the global war on terrorism.

In times of local crisis, the squadron has lent its men and women to respond to blizzards, floods, fires, and tornados, remaining ``Proud, Prepared, and Professional'' in its committed service to state and country.

Today I give great thanks to the men and women of the 114th ``Fightin' Lobos'' for being named the top fighter unit in the nation and for their outstanding service to the great State of South Dakota and the United States of America.

Mr. President, today I wish to recognize Rusty Toupal, 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 over the past several weeks.

Rusty is a graduate of Wolsey High School in Wolsey, SD. Currently he is attending South Dakota State University where he is majoring in consumer Affairs. He has also been a member of the Army National Guard for 7 years and has completed a deployment to Iraq.

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 Rusty for all of the fine work he has done and wish him continued success in the years to come.

Madam President, reserving the right to object, will the Senator from Washington modify her request to substitute a Thune amendment regarding extenders, the text of which is at the desk?

Madam President, I object.

Mr. President, I also want to add my support for the FAA

reauthorization bill which the Senator from North Dakota talked about. It is important that we get this done. We have been operating without an authorization since 2007. We had a bill pass through the Senate by a vote of 93 to 0 back in March, and this is something that needs to be done.

So I hope we can get floor time scheduled for this and that we can get on that bill, get a conference report, and get it through and enacted because there are a number of important improvements that need to occur, and that legislation provides for that to happen. It has been kicking around here for way too long, so I hope we can get to that bill and quit having to do these month-to-month or--in this case, as it ends up being--the end-of-the-year extensions, which keeps us from doing what we need to do, and that is get a long-term reauthorization in place that provides some certainty and predictability for the users of aviation in this country.

I would be happy to yield to the Senator.

I would say to the Senator, through the Chair, one of the things I think is hurting business and economic development in this country is a lack of certainty.

I didn't know the precise number, Mr. President. I will say to my colleague from Montana if it is not, in fact, 130--and I will take his word for that--I know it is a lot. There are lots of provisions in law that need to be extended and lots of communities in this country that depend on that.

I would say, through the Chair, to my colleague, I think it is important that this Senate act in a way that provides some certainty and predictability for people in this country who depend upon public policy coming out of here that has some permanence to it. Right now, we continue to act on short-term extensions in so many different areas. So I don't dispute at all the statement of the Senator from Montana.

If I might continue, Mr. President, let me just say with regard to the observations of the Senator from Montana that I couldn't agree more that we need to get these things done, and we need to provide some long-term certainty for those in this country who rely upon decisions that come out of the Congress. I know the Senator from Montana has offered an extenders bill that would provide at least some near-term relief for many of these provisions of law that expire and that impact so many across this country.

I would say through the Chair to my colleague from Montana that I agree with his premise. I think it comes down to how we go about doing that. The Senator from Montana has offered up a proposal that would extend many of these expiring tax provisions, but he does it in a way that raises taxes. I have a proposal I offered earlier in response to the majority leader's unanimous consent request to move a tax extenders bill that would substitute my bill for that one because my bill does all the same things the Senator from Montana wants to accomplish. But it does it with spending reductions--reducing spending--as opposed to raising taxes.

There are a number of things my bill would do, one of which is to extend the $215 million tax break for teachers to purchase books, supplies, computer equipment, and other materials for the classroom.

It also includes the biodiesel tax credit, which supports our Nation's budding biodiesel industry. It provides $854 million in tax relief for these biodiesel manufacturers to invest in our clean energy future.

The bill reinstates the State and local sales tax deduction, which provides $1.8 billion in tax relief to residents of States such as South Dakota who pay State and local sales taxes but are not allowed to deduct these taxes from their Federal income taxes. It also allows for the deduction of State and local property taxes, which saves taxpayers $1.5 billion as well.

My bill reinstates the research and development tax credit, which the President has supported for 2010. This important tax credit incentivizes important research and development across the country.

It also provides a number of needed tax credits for businesses to invest and create jobs, including refundable AMT credits for corporations, and it provides a generous doc fix. One of the things we talk about around here is the doc fix. On the doc fix, we continue to go month to month or quarter to quarter. Now we are good to the end of November. But at the end of November we are going to be dealing with this issue again. If we do not, physicians across the country are going to experience a significant and dramatic pay reduction, which will impair their ability to serve patients across this country who depend upon Medicare.

My doc fix provides a 2-percent increase for 2011 and another 2- percent increase for 2012. The current doc fix, as I said, is set to expire later this year, on November 30.

The way I do this is I fully offset this by spending cuts, including medical malpractice reform, a freeze on Federal salaries, reductions in wasteful, duplicative, and excessive government spending, rescinding unspent Federal funds including the stimulus, an expansion of the affordability exception to the individual mandate that was included in the recently passed health care reform bill and by disposing of unused and unneeded Federal property.

I also add in my proposal a new deficit reduction trust fund, where rescinded balances and money saved through this amendment will be deposited for the purposes of paying down the Federal debt. It does not include job-killing tax hikes on carried interest income, which would discourage investment and hurt our Nation's productivity, and does not include a 70-cent-per-barrel increase, a tax hike on oil, nor does it double count the revenues from that tax by saying it both offsets the cost to the bill and also adds money to the Oil Spill Liability Trust Fund.

I concur entirely with the premise the Senator from Montana was addressing, that we need to get these things extended. We need to provide some permanence. But there is a difference in the approach on how we deal with that. The Senator from Montana proposed one way, I proposed another. I obviously would love to get a vote on this proposal because I think what we ought to be focused on right now, rather than raising taxes at a time when we have a very fragile economy in an economic downturn and making it more difficult for businesses to create jobs, that we ought to be looking at what we can do to reduce spending in our Federal budget and offset the cost of these extenders and pay for this 2-year extension of the doc fix, which also provides for a modest increase, not the significant reduction they are going to experience otherwise. We do this through spending reductions in the Federal budget. I hope we get an opportunity to vote on this.

I yield my time.

Mr. President, if the Senator will yield, I say in response to that, that is absolutely true. Around here I think, traditionally, tax extenders have been something both sides have worked on. Generally, it tends to be kind of noncontroversial. I think our side is very open to discussions and would welcome an opportunity to sit down with the majority and the Senator from Montana and others, whoever they feel necessary, to work something out. We stand ready and willing to have that discussion and hopefully to get this thing put behind us.