The Fiscal Cliff
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. Mr. President, I have come to the floor to express my own sense of encouragement about the statements made this afternoon by President Obama and…
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
Mr. President, I have come to the floor to express my own sense of encouragement about the statements made this afternoon by President Obama and Senator McConnell which indicate that the negotiations to avoid the so-called fiscal cliff are making progress. We are not there yet, but they are making progress. I am very encouraged by that.
I have heard over the last couple days a familiar phrase invoked many times, and it is that no deal is better than a bad deal. I suppose it is often true that no deal is better than a bad deal. But in the case of the fiscal cliff, no deal is the worst deal because the government will go over the fiscal cliff and will take almost every American with us.
Almost every family who pays taxes now will pay higher taxes. People's jobs will immediately be put in jeopardy, unemployment compensation will end for more than 2 million people. Our defenses will be decimated by cuts that will put us in a position of accepting unacceptable risks to our security. Title I programs of education for low-income children will be cut dramatically.
Most people, including our own Congressional Budget Office, say the combination of tax increases along with the decreased spending required under the Budget Control Act will push our economy back into recession in the new year.
So I do not agree that no deal is better than a bad deal. In this case, I repeat, no deal is the worst deal because it allows our country to go over the fiscal cliff and hurts almost every American family and our country and our economy as a whole. This should not be a surprise to us. It is not as if--if I can use the metaphor that Congress was going along in a bus on a ride through the country and suddenly came to the end of the road and there was a cliff. This should not be a surprise to us. We created this cliff ourselves a year and a half ago when we adopted the Budget Control Act. We created it for a very good reason: Because we knew we had proven ourselves incapable of making the compromises that were necessary to achieve the long-term bipartisan debt reduction program America desperately needs.
We are over $16.4 trillion in debt. I am in my last days as a Senator. If you told me when I started that we would be $16 trillion in debt, I would not have believed it. Frankly, if you had told me just a dozen years ago, at the end of the Clinton administration when we were in surplus, that we could possibly be $16 trillion in debt, I would have thought you were not reality tested. But here we are.
Most everybody knows the way we are going to get out of this is with a combination of tough medicine--I would call it tough love. We are going to have to reduce spending. We cannot do it all from discretionary spending. The Budget Control Act we adopted last summer; that is, the summer of 2011, does it all from discretionary spending. What is discretionary spending? It is different from entitlement spending: Medicare, Medicaid, et cetera. It is what most people think of as the government. It is education programs. It is environmental protection. It is social service programs. It is defense. It is homeland security. It is law enforcement. That is about one-third of our budget. It is not the part of spending that is driving the debt and deficit. That is being driven by the growth in entitlements, which are rising for a good reason, which is that the American people are living longer; therefore, taking much more money out of programs such as Medicare than they put in and, I suppose, for reasons that are not so good, which is the cost of health care continues to go up.
We proved ourselves incapable of dealing with this crisis as part of the normal process of compromise. So we created the cliff, which was intentionally made so harmful that our assumption was that we would not allow ourselves to go over the cliff because it would be so hurtful. Again, that is why no deal in this case is not better than a bad deal. No deal is the worst deal because it means we go over the cliff.
Why is all this happening? For a lot of reasons. But one is that there are groups within both great political parties who are defending the status quo, who do not want the situation as it exists now, which has created the $16\1/2\ trillion of debt, to change. But we cannot go on this way. Because if we do, we already are putting an enormous burden on generations of Americans to follow in paying off the debt we have incurred. But we are also coming to a point, if we do not do something soon, where the choices we are going to have to begin to pay off the debt are going to be hurtful to our great country, which is enormous tax increases, enormous spending cuts such as the one in the fiscal cliff proposal or, at worst, the monetizing of the debt, a drop in the value of the dollar, and all the harmful effects that will have on our economy and our country.
Here we are, December 31, not only the eve of a new year--which we hope and pray will be a great one for our country and everyone who lives in it--but a few hours away from letting our country go over the cliff. We can't let it happen, and that is why I am so encouraged that these bipartisan negotiations are looking like they will produce a bipartisan agreement, which hopefully will come before the Senate sometime this evening.
This is not, this will not be the comprehensive, bipartisan, long- term debt
agreement we created the cliff to encourage. This will not be the bipartisan, long-term debt reduction agreement this country needs.
So much is beginning to turn right in our economy. Housing prices are doing better, unemployment is down. We see manufacturing picking up again. The big problem the American economy has is right here in Washington, our inability to get together across party lines to bring our country back into fiscal balance and to show the country and the world we have a political system that is capable of fixing our problems.
Earlier this year, Bob Carr, the Foreign Minister of Australia, one of our greatest allies in the world, said: ``The United States is one budget deal away from restoring its global preeminence.''
``The United States is one budget deal away from restoring its global preeminence.'' Perhaps because I am so proud of this country, I would say we are one budget deal away from restoring our global dominance for a considerable number of years.
Unfortunately, after--I hope and I pray we adopt the result of negotiations going on now and avoid the fiscal cliff--we will still be one grand bargain budget deal away from restoring our global preeminence. That work has to be done, but at least we will have avoided the cliff.
By a twist of fate, the occupant of the chair is my colleague and friend, the Senator from Connecticut. You have probably seen these numbers, but just to bring it home for one State, what will be the impact if we allow the country to go over the fiscal cliff in Connecticut: 1.4 million middle-class families will see their Federal income taxes increase, almost 1.5 million families.
If the middle-class tax cuts are allowed to expire on January 1, a median-income Connecticut family--now I know the median in Connecticut is higher than it is in most other States, but this number is true for any family making this amount of money. It makes an important point.
A family of four earning $86,000 a year happens to be the median family income in Connecticut. But that family, which I think would be considered median just about everywhere, middle income just about everywhere, would see its Federal income taxes rise by $2,200. That is a lot of money for a family of four paying a mortgage, paying for food, probably paying something for education for their children, maybe college--too much.
Another Connecticut number is 680,000 additional Connecticut taxpayers will be hit by the alternative minimum tax. It is amazing when we think about that. Those are going to be middle-class families who will be hit by that. Also, 120,000 Connecticut taxpayers will no longer get a tuition tax credit to help pay for college because that too will expire if we don't do something about it. There are 340,000 Connecticut families raising children who will see an average tax increase of $1,000 as they lose access to the child tax credit.
The earned-income tax credit, which was something adopted during the 1990s--which I was proud to be part of--is also set to expire on January 1. That is for--when I say lower working families, some might call them lower middle income, gives them a break that they need.
In the most recent year for which we have numbers, almost 43,000 Connecticut working families received important benefits from the earned-income tax credit, and they would lose it.
The national numbers are 2.1 million people long-term unemployed who will see their unemployment checks end. We are setting them adrift. In Connecticut, that means 33,600 Connecticut individuals will lose unemployment benefits under the Emergency Unemployment Compensation Program.
I met with a group of these folks recently, and I know a lot of these people are white-collar people. Some of them are in their middle years of life, and they lost their jobs in companies that were hit by the recession. They are having an impossible time finding new employment, and, believe me, they are working so hard to try to get it--33,600 of them would be set adrift without unemployment benefits if we go over the fiscal cliff.
One estimate by the National Economic Council is that there would be $2.5 billion less in consumer spending in Connecticut, and that is basically because tax hikes will take a bite out of middle-class budgets and, frankly, some people will lose their jobs. I am afraid they will lose their jobs in many industries, including the defense industry, which remains a foundation, as the acting chair knows, of our State's economy. The NEC also estimates that we would have 1.1 percent slower growth in the Connecticut economy with the attendant harmful results of that.
I could go on and on. Title I would be forced to serve about 9,300 fewer Connecticut children. We would get $5.6 million less in funding low-income home energy assistance payments to people in our State who heat with oil, and on and on and on.
This is all my way of coming back to the point I made at the beginning and why I am encouraged by the statements President Obama and Senator McConnell made this afternoon that we are close to an agreement, close to a deal.
I don't agree, I say again, that no deal is better than a bad deal. In this case of the fiscal cliff, no deal is the worst deal possible for the American people.
We passed the time when we are going to, before tonight, negotiate the comprehensive bipartisan debt reduction agreement our country desperately needs. The least we can do is protect the constituents who were good enough to send us here from the worst possible result, which is that we let the country go over the cliff. We have proved that to everybody, including people around the world who depend on American strength and watch us, that our political system has become absolutely dysfunctional.
So I hope the negotiations going on now end with an agreement, and I hope we will pass it with a bipartisan majority, a strong bipartisan majority in the Senate and the House. I certainly will support it from all I hear about it myself.
I yield the floor, and I suggest the absence of a quorum.