Mr. President, until my voice gives out, I wish to address the bill that is on the floor. The bill has been denominated by my colleagues on the Democratic side as a jobs bill, but it will not create any new jobs and when considered in…
Mr. President, until my voice gives out, I wish to address the bill that is on the floor. The bill has been denominated by my colleagues on
the Democratic side as a jobs bill, but it will not create any new jobs and when considered in conjunction with the health care legislation the President has proposed will actually cost jobs and I wish to address that.
This legislation extends some current provisions of law, including tax provisions, unemployment compensation, COBRA insurance. It extends a provision of Federal subsidies to the States for Medicaid, and there are a few other provisions. None of these create new jobs. The tax extenders are useful. That is our Washington, DC, speak for provisions of the Tax Code that last 1 year and have to be renewed each year. They are generally used to enable businesses to deduct from their taxes ordinary business expenses and include things such as research and development tax credits which I think are supported by all 100 Senators. So we do this every year. We extend these tax provisions for another year. It should have been done at the end of last year; it wasn't. So it has to be done now and made retroactive to the beginning of the year. One could argue that some of those may theoretically create a few jobs, but they are something we do every year, and they are not for the purpose of creating jobs; they are simply good business practices. So this bill takes on the usual business of the Senate. There is nothing new, as I said, to create jobs.
What of the subject of unemployment coverage extension which we have just been debating? That doesn't create new jobs. In fact, if anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work. I am sure most of them would like work and probably have tried to seek it, but you can't argue it is a job enhancer. If anything, as I said, it is a disincentive and the same thing with the COBRA extension and the other extensions here. So it is not a jobs bill, and it is beyond me how it could be denominated as such.
Moreover--and the reason for my colleague's objection to the temporary bill--the Congressional Budget Office preliminary estimate shows this bill adds $104 billion to the deficit over the next 10 years, and that is in addition to the $10 billion that would be added that my colleague, Senator Bunning, has been talking about. This number is primarily due to the extension of unemployment insurance, the expanded COBRA extension, and the new Federal assistance to States for Medicaid patients. These are given emergency designations. As a result, we don't have to supply an offset, a spending reduction, to pay for the cost of these provisions.
This comes just a week after our Democratic colleagues were bragging about the fact that they passed a bill called the pay-go bill.
The pay-go bill is supposed to require that if we are going to spend money, we find an offset in the form of a spending deduction or revenue enhancement that covers the cost of that new spending. We predicted that as soon as we passed the pay-go legislation, our Democratic colleagues would come to the floor and seek to have their next legislation exempted from it. Sure enough, that is exactly what was done.
Both the matter Senator Bunning has objected to and the bill we are on now have to be exempted from the pay-go requirements and, therefore, add to the Federal deficit--in this case, $104 billion. Some of these provisions are useful provisions. But the truth is you can't, on the one hand, say everything we do has to be offset with spending cuts or tax increases and then waive the pay-go legislation every time you want to do it--as it turns out so far, every time we have considered legislation.
The reality is, we could pay for this legislation and, as Senator Bunning said, we could pay for the so-called temporary extension of unemployment benefits because we have money we authorized and appropriated earlier in the so-called stimulus bill which would more than offset the cost of this legislation. Republicans, of course, would like to offer an amendment to pay for it from the stimulus funds. According to recovery.gov, the Web site for the stimulus bill, only $186 billion of the $499 billion in appropriated and direct spending from the stimulus has been spent so far.
That means $313 billion or 63 percent remains unspent. So $160 billion of these funds hasn't even been made available to be spent yet.
The original CBO estimate of the stimulus shows 21 percent of the money, $122 billion of the appropriated and direct spending, will not occur until 2012 or thereafter. We have an immediate crisis. Our Democratic colleagues say we have to extend unemployment insurance. In fact, it is such an immediate crisis, they have to waive the pay-go requirements that would ordinarily apply because it is an emergency.
If that is the case, then why not simply take this money that isn't going to be spent until after 2012 and pay for the legislation that is before us right now? Why would we put aside stimulus money to spend in 2012 when people need it today? That is the very argument my colleague from Illinois was making to my colleague from Kentucky. Why pile on the deficit if we have this money available? Therefore, my colleague from Kentucky made a good point when he suggested this money should be paid for out of the stimulus funding. I am sorry to see my Democratic colleagues object to that request.
The conclusion is, therefore, the bill will do nothing to create new jobs. What is more, when considered in conjunction with the health care legislation, it will actually cause a loss of jobs.
The President, who talked about his plan last Thursday at the so- called health care summit, noted that the bill costs a lot of money and, therefore, they had to raise taxes in order to pay for it. Among other things, the President's plan, unlike the plan that passed the House or the Senate, would raise the Medicare payroll tax on small businesses. It would raise taxes by 31 percent. It would also apply the Medicare payroll tax to investment income, such as interest, dividends, rent, and royalties.
We all know if you tax something, you get less of it. Taxing investment income would, therefore, reduce investment in the economy. Putting a tax on the employment of people means businesses are going to hire fewer people or there are going to be fewer people on their payroll. We cannot afford to lose more people to unemployment. We need to begin hiring people. How do we do that? You surely don't do it by making it more costly to employ people or by increasing by almost one- third the Medicare payroll tax. That makes no sense. To apply it now to investment income will directly drive down productivity and economic growth. Less investment will, obviously, lead to lower productivity, slower economic growth, weaker wages and salaries, and lower household wealth.
For example, each new dollar of tax paid by a small business is one less dollar that could go toward hiring new employees.
The Heritage Foundation just did a study on this proposal. It found that between 2011 and 2020, regarding this investment income proposal alone, it would result in an average of 115,000 lost job opportunities per year; it would reduce household disposable income by $17.3 billion per year; it would cut wages and salaries by $14 billion per year; and it would decrease household wealth by $267 billion per year.
Last week, Congress passed a new job-hiring tax credit. With great fanfare, my colleagues on the other side of the aisle said this is the way to help small businesses hire more people. The whole idea was to put more people to work. The very same week, the President announces his health care proposal that will make it harder for people to go back to work. If the goal is to get more people to work, I submit that my Democratic friends should shelve their health care plan, which will have the opposite result. It is very hard to justify legislation that is going to hurt job creation.
As I say, when you consider the fact that, No. 1, the bill before us creates no new jobs--and I challenge my Democratic friends to show us how doing what we always do and what was done last year--extending the R&D tax credit, extending COBRA insurance, extending unemployment benefits--creates jobs. What is the estimate for job creation by the CBO on this? It can't be very much.
Finally, my colleague from Illinois, in responding to Senator Bunning a little bit ago, said Republicans always object--and we have many times on previous occasions--to the consideration
of unemployment legislation. I recall back in October--in fact, I will quote from a story, dated October 13, 2009, by Dan Friedman. He says:
Last Thursday, Democrats announced a deal that gave all 50
States a 14-week extension.
I think that was about three extensions ago. I have forgotten exactly.
The Senate Finance Committee Chairman, Max Baucus, within
hours of that sought unanimous consent to pass the bill. Even
though Republicans had already indicated that they would
object so that they could try to amend the bill to replace
the extension of the tax or to provide a pay-for in the
Democrats' plan with the use of stimulus money.
It noted the fact that I had also asked that we see the CBO score on that. It noted that Senators Reid, Baucus, and other Democrats quickly bashed Republicans: ``The delay is a threat to millions of workers struggling to feed their families as they retain or search for new jobs,'' my friend, the chairman of the committee, said.
Earlier in this particular article--I will read how it starts off:
Senate Democrats in recent weeks have repeatedly used
unanimous consent agreement requests to rack up talking
points against Senate Republicans--a tactic that GOP aides
said the majority is using deceptively to blame Republicans
rather than internal disputes for stalled legislation. Senate
leaders have long used the tactic of asking for unanimous
consent to pass legislation they know will draw an objection
from the minority and then blasting the objectors for
obstruction.
I fear that is what we are seeing here. Immediately after Democrats, behind closed doors, develop legislation, they immediately come to the floor and say: Let's pass it, and Republicans say: Let's at least see how much it costs and give us a chance to amend it. We thought the Democrats liked to do that. Oh, no, we cannot have that, not when it applies to unemployment extension.
That is all my colleague from Kentucky is trying to do. As I said, that is $10 billion not paid for. The bill before us is another $104 billion not paid for, and it doesn't create a single new job. Yet my colleagues on the other side of the aisle are unwilling to use stimulus money to pay for it.
I will be very interested, when we do have an opportunity to amend the bill before us--I assume we will, and I assume one of those will be to pay for the bill with the stimulus funds--maybe we can make it clear these are not funds that would be spent until after the year 2012. It will be interesting to see if my Senate colleagues who support pay-go would support that kind of amendment. After all, if this is supposed to be a stimulus bill for job creation, you would think it could be used for that purpose.
I hope my colleagues will consider that every time we pass one of these bills, we are adding to the deficit and we are not creating new jobs. It is a legitimate point for Republicans to make. I hope we will have the opportunity to address that subject with amendments as this bill goes forward.
If my colleague will yield, I said it is not a job creator. If anything, it could be argued it is a disincentive for work because people are being paid even though they are not working. I certainly did not say, and would never imply, that the reason people don't have jobs is because they are not looking for them. It is true that a lot of Americans have gotten so tired of looking for jobs or believe they are not going to find them that they have stopped looking and, as a result, the unemployment numbers are probably higher than the roughly 10 percent that is quoted now. Some people believe it could be as much as 17 percent. This is why I have supported every extension of unemployment benefits. I have voted for them. As my colleague says, there are five people looking for every job that exists. If they cannot get the jobs, they needed support.
But what I said is true, and if my colleague can find a source that says it is not true, show me. But providing unemployment benefits doesn't create jobs. The bill we have before us is denominated around here as a jobs bill. That is the biggest single expenditure in the bill, and it doesn't create jobs.
Mr. President, I respond to my colleague, the point I was making is that it is hard to describe this as a jobs bill because it does not create jobs. Each year, we extend these tax provisions. That is why we in Washington call it the tax extenders bill. This is not some new job creator. I agree with my colleague that to the extent we continue this in practice--though everybody who takes advantage of it knows it will be extended. So they have not made decisions based upon the prospect that we are not going to do it. They know we are going to do it retroactively, so it is not creating any new jobs. I support the extension. I think it is a good thing. But let's don't call it a jobs bill.
By contrast, as I said, the health care legislation my colleague supports is a job killer. I pointed out just one provision: 115,000 jobs per year lost just because of the one provision taxing the so- called passive income, the dividends. And we are not even sure whether capital gains are taxed in that. Their estimate may even be low.
The reality is, if we are really talking about saving or creating jobs, let's forget this massive health care legislation that now adds two more job-killing provisions to it: a 31-percent increase in the payroll tax and taxing for the first time passive income as a part of Medicare. That is a job killer.
If we are going to talk about jobs with regard to the legislation we have before us, I think it is a fair point to also talk about legislation our colleagues on the other side of the aisle want very much to try to get passed.