Mr. President, before I talk about the budget, I wish to commend the Senator from Georgia. As someone who has been in the real estate business for many years, such as the Senator from Georgia, he is absolutely right. If homeowners are…
Mr. President, before I talk about the budget, I wish to commend the Senator from Georgia.
As someone who has been in the real estate business for many years, such as the Senator from Georgia, he is absolutely right. If homeowners are stuck with a 20-percent minimum, the odds are it will crush the housing market. I can tell you this personally because I am helping my mother do the paperwork now for her home. If she was required to put 20 percent down, she would not be buying that home today. We hope to close on the home in the next 45 days. We are fortunate she is able to do that, but 20 percent would take her right out of the market, unable to buy the home she wants to retire in.
So I say to the Senator from Georgia, I hope more people hear it in the administration, because if they don't hear that, as we know with the housing market, it is a critical component of our ability to pull ourselves out of the recession. I thank the Senator for making those comments and noting that.
I know Senator Conrad was down here earlier, the chair of the Budget Committee, to talk about the budget framework. I first wish to say thanks to Chairman Conrad. Here is someone who has been on the Budget Committee for 25 years, since 1986, and has been chairman for many of those years, an unbelievable capacity and understanding of the budget and what needs to be done. He understands it. He clearly recognizes we have to have a balanced approach.
For months, yourself, Mr. President, and myself, sitting on the Budget Committee, along with the chairman on the Democratic side, have been working to try to figure out how do we craft a balanced approach. How do we ensure that at the end of the day, we recognize we have to have a budget that continues to help grow our economy, creates fairness in the system, and makes sure we take the responsibility of creating a more accountable and financially responsible budget, not only for this year but for the years out, and dealing with a comprehensive approach to dealing with the deficit?
This is not an easy task, to say the least. I can say, standing here, and I know, Mr. President, as a member of the Budget Committee also, none of those meetings were easy in the discussion, if I could say that--robust debates, robust controversy in some of the issues we talked about but also a lot of ideas. But what is in front of us?
No one can match the chairman's approach of how to address an issue such as this as he lays out slide after slide the impacts, from the macro to the micro, of this budget and what it will mean. But it is clear the budget proposal he has laid out, the framework, as he calls it, by the Democratic majority of the Budget Committee is $4 trillion in cuts for deficit reduction and is achieved in a very fair and balanced way, without putting the burden on the backs of seniors, working families, and small business. This is a balanced approach. The deficit-cutting mechanisms are drawn half from savings and half from revenues. Revenues mean closing loopholes.
His photo there, which as we sit here and present to the President our positions is hard for people in the balconies to see, but it is of an amazing five-story building. It is not a very attractive building, just a small five-story building in a tax haven that grants thousands and thousands of businesses a shelter from their fair share of paying their taxes.
The idea of this revenue component of the proposal we put forth is closing loopholes, closing down tax avoidance schemes that rely on abusive tax shelters, and, yes, cutting tax subsidies, ending the practice of giving the wealthiest of the wealthy tax subsidies they simply do not need. It is about promoting fairness.
As we dealt with this budget, a $4 trillion reduction--a number that the bipartisan commission hit as their target, one we hear out there now in the press a lot but one we felt was a reasonable approach. It is more than the House budget that was proposed. The House budget included savings only on the spending side and actually worsened the outlook on the revenue side
that we simply do not believe is good enough.
The budget is about fairness, about ensuring that we have a system that is balanced but also investing in the right areas so we have long- term and continued growth. We do not give more tax breaks to corporations and the rich and then put the burden on the backs of seniors, poor kids, working families, disabled. It is unacceptable to put the burden on our most vulnerable population. The budget is truly a moral document. It defines where we are going to go, what we are going to do, and how we are going to look in the next 10 years or 20 years as a country.
When I was mayor of Anchorage in 2003, when I got elected, I had a budget around $215 million, with about a $33 million hole in it--pretty significant in the sense of proportions. We had to deal with spending and reducing it. We had to create a fairness in the revenue, but we also had to invest. But we also knew the document and the work we were doing in the budget would define where our community went, not just in the year we were doing it but in the next several years down the road.
I was very pleased. When I got elected to the Senate, it was, I think, Business Week and others that rated the city that I was mayor of, Anchorage, as probably the most likely city in the country to recover from the recession the fastest. As a matter of fact, Forbes has listed it, not only last year but this year, I think, No. 3 this year as the city of job growth because there was a foundation laid. We had to make some tough decisions, and I remember as mayor they were no fun. I remember the role of the Presiding Officer in the community he represented. There are tough decisions we have to make, but you have to make them.
I can still remember one headline that as we were trying to figure out what do with our library system that wasn't run as well as it could be, I still remember this headline to this day: ``Begich Lays Off 21 Librarians,'' which is not a very good headline, to say the least.
But what did we do? We reexamined it, reinvested, increased our partnerships with the private sector today, and the library system is more robust than ever before, with new branch libraries serving more kids than ever before, better facilities, new equipment, new technology. It is more robust than it has been in decades because we had to make some tough decisions for the long term.
That is where we are today, especially after the disappointing news we had this last week with regard to the job market, when the economists thought we were going to have 120,000 new jobs and we ended up with just 18,000, unemployment rising to 9.2 percent.
As I said, this plan protects critical investment that will help us build the future of our economy here. It invests, as mentioned by the chairman of the Budget Committee, Chairman Conrad, in education, energy--which is, of course, for my State critical--and infrastructure, core infrastructure.
I use my experience as a mayor. In my short term as mayor of Anchorage, we built more roads than all the mayors combined in the previous 20 years. We built more vertical construction--fire stations, convention center, museums, and other facilities that helped water, sewer, power, new generation of gas turbines--all that because when you build that infrastructure, the private sector will attach to it, will be attracted to it and will build off of that.
This budget that is being presented by the majority on the Budget Committee keeps our investments in education, energy, infrastructure, which in turn will ensure that we continue to move back into the realm of being more competitive on the worldwide market.
We have all heard the budget proposal lays out some ideas on tax reform--not just a little bit here and a little bit there, but fairly significant. When we talk about our corporate rate in this budget proposal by the majority in the Budget Committee, it brings it down to about 29 percent. It is not where I would like it, but it is better than where it is today. It gets us more competitive on the world market.
A group of us also have introduced legislation in advance of this budget proposal, the Wyden-Coats-Begich Bipartisan Tax Fairness and Simplification Act. The legislation provides real tax reform for our very outdated system. It plays off of exactly what the majority laid out, a budget proposal that talks about tax reform to create certainty for our business community for long-term investments, and we take it one more step. Not only do we look at the corporate component, we look at the individuals.
Can you imagine, as an individual right now we deal with six different rate structures. If we can reduce it to three, which our bill does, and you could do your tax return on one page--can you imagine the amount of time, effort, and money individuals will save? We take the budget proposal that the committee I sit on and the Presiding Officer sits on one step further. Not only do we focus on stability and certainty for the business community, which is critical for long-term investments they need to make to ensure all those trillions they have literally locked up in their cash accounts because they are not sure where we are headed as a country, we create the certainty, but we also ensure the individual has a compressed rate, a more fair system, and simplified, which we think is important.
Tax reform is an integral part of the conversation on deficit reduction. I am pleased Senator Conrad's proposal also provides some of the same tax reform principles I mentioned. As I mentioned, it not only deals with the rate structure but, as he detailed, very aggressively closing shelters and loopholes, and not just for one industry over another industry, which has been some of the debate, it is for fairness of all. We look at it all because we want everyone to be treated fairly.
Let me talk about a couple of more pieces in the majority's budget from the Budget Committee. Chairman Conrad went through it in great detail but I want to emphasize this point. The AMT, the middle-class tax cuts--what does this mean? What does this mean for the average person here?
Right now, 4.3 million taxpayers are affected by the AMT, which is a small tax provision that many years ago was set in place to get the richest of the richest. But it was never indexed, never inflation adjusted, so it has grown. There are 4.3 million taxpayers we have affected today. If we do not fix this tax problem, it will increase to 31 million people who will have additional taxes to pay.
What are we doing? We are putting on the AMT patch to fix this problem so 30-plus million people will not have this additional tax burden. We think it is right. We think it is the right approach. It goes to the people who need it the most.
In addition, this framework that was laid out today, for singles earning $500,000 and couples earning $1 million or more, they will not receive the same tax relief as everyone below them will receive. The tax relief will be focused on families who earn $1 million or less. Why is that important? Because not only are they families, but almost 98 percent of all small business earn $1 million or less pretax. So we protect the backbone of my State. I can tell you as a small businessperson, the Presiding Officer knows that as someone who worked in a small business and it grew to a larger business, it is the backbone. It is what makes the difference in hiring people. Every day when people see their revenue stream start to increase, small businesses start hiring people. They need those employees.
But this proposal is not only for the individual, and then also the larger corporation bringing in that corporate rate, but it protects almost all the small businesses in this country--and, of course, being very biased--and in my State.
What does that mean? That means when you calculate it all in real dollars, and you heard the numbers, when you think about the tax reductions, the tax savings for middle-class Americans and small business, it is well over $1 trillion between the AMT and preserving the tax relief for families earning under $1 million. It is significant. That is money that small businesses will reinvest into their businesses, employing other small businesses to do the work. It is families who will have more disposable income to put into the economy which means more purchases from businesses which means more hiring and this has a constant ripple effect.
When you talk to business owners, and I have--I spent a lot of time with them as a small businessperson and a Senator now, meeting with business folks on a regular basis--over and over again they tell me put the money in the hands of the consumer. Then the consumers will spend that money and improve the economy because, as they spend money, we will hire more employees and buy more product. It goes on and on.
There is a difference between what we are trying to do in the sense of the value, who receives the benefit of a comprehensive budget proposal, a budget proposal that the majority in the Budget Committee has worked on for the last 2 or 3 months, at least, and before that trying to figure out the right approach. It is a balanced approach. It focuses, as I said, on dealing with budget reductions, accountability, ensuring that where there is waste we go after it aggressively. Where people are taking advantage of the system at the cost of the everyday person, we go after that. But we don't forget that we have to invest in the core issues of education, energy, and infrastructure, so we continue to grow this economy.
We must have a balanced approach in this process. I know on the other side they will argue over and over, first let's do spending and then we will deal with other things. You have to do it all together. I am telling you this as a person who ran a city for almost six years, ran businesses for many years: you cannot do it on one piece of the equation. It is a three-pronged attack. Some of the folks I know around here after years of service have gotten a little amnesia as to how it will occur. We can blame individuals, blame certain Presidents, certain majorities, but we are where we are and we have to deal with this.
It is not going to be fun. It will be uncomfortable. It will make us have to dig deep into what is right for the long-term health of this country and what we need to do to ensure America becomes what it used to be--a stronger country economically than it is today where we are in the lead when comes to innovation and we are in the lead when it comes to developing new technologies to lead this world in its economic growth.
We cannot do it in this process of I am only going to do one thing and one thing only. That does not work. It has to be a broad, sweeping approach.
We are not going to forget in this process that we are not going to throw people overboard who have helped build this country. When you think of our seniors, the generation that built our country to where it is, ensuring that people such as myself, the Presiding Officer, and others have an incredible opportunity, thinking about where they need to be, this budget plan keeps Social Security off the table.
We recognize there are issues and we have to deal with it in its sustainability and we recognize that, but it is not a driver. It has not contributed 1 penny to this deficit. We need to treat Social Security in a way that ensures sustainability in the long term and there are simple solutions to that that I know we can get to.
We also ensure that Medicare is taken care of, that benefits are not reduced. Also, as the chairman said so eloquently earlier, we have to ensure that our veterans are protected, those who serve now in Iraq and Afghanistan and all around the world, and served before. We owe a great deal to veterans. In some cases before I got here I know there was a lot of debate in the Veterans' Committee on which I sit. We have been working to be very sure they get the benefits they deserve. We need to make sure we fund them. When we send them to war and they become veterans after their service, we have an obligation, an obligation that should not be sliced and diced because we want to make political statements on the budget cutting process. They need to be protected.
As I said, this budget does good things. It is a fair approach. It may not be perfect in all senses. I can tell you there are things I don't like in it that are going to impact groups that are concerned about how we approach this, but we are all in this together. We need to make the approach the right way. But those who are so hardened now who say it is only going to be about spending cuts--which, let me make it very clear, I think the Budget Committee, the majority on the Budget Committee, is not afraid of dealing with the budget cuts. We have done that--$2 trillion of budget cuts. We have to get used to it when we are here in the Senate, not Bs or Ms, they are Ts, $2 trillion of budget cuts. We also balance it getting rid of loopholes and tax shelters in a fair and balanced way so everyone pays their fair share, but we also make sure we invest in the future.
If we are shortsighted around this place, we will pay for it next year and the year after that and the year after that. This is truly I think the right approach that goes after ensuring the middle class are not the people carrying the burden as they have been doing for the last several years--especially in the last 2 years, clearly--and that everyone participates. But we also make sure investment is done the right way.
The chairman laid out in great detail all that is in the framework. We think it is an important piece to lay down, that Democrats have been working on. We have been working every hour, every day. Even when we are back in our home States, trying to talk to constituents, we are talking about the budget. The Presiding Officer tells me stories. Every night he heads home and he meets with constituents to try to find out what the right approach is here. We bring all that information right here in this body. We did it in the majority in the Budget Committee. I know I put up a Web site request asking Alaskans what it is they want to cut. What do they want to save or have as revenues? Like good Alaskans, they were not bashful. They were very adamant about what they wanted and what they did not want and where we should cut and where we should not cut. I have taken all that in, and I have used that as part of my debate and discussion with the majority of the Budget Committee to figure out what the right approach is. I think this is the right approach. I think some might call it a big deal. In the Senate, this is the big deal. We are in the big place. This is where big deals happen. This is where it all has to happen. It is where we drive the economy in the sense of our certainty and our policies. If we cannot have a strong deficit reduction budget, we are not going to create the certainty the business community needs to invest, which will, in turn, employ more people and create a better economy for us here and obviously will have an impact around the world.
I want to say thank you for an opportunity to say a few words, again, commending the chairman, who was here earlier, for all of his work. It is a tough call. I will end on this comment, the story I told you about the librarians and the headline I had to have. That was in my first 6 months in office when I was mayor. Mr. President, 2\1/2\ years later, I won reelection with one of the largest margins in the city's history. So I would say this to anybody who is trying to figure out if they are going to win their primary, win their general election: Put that all aside. That is what I did when I was mayor. I had to make some tough calls. Did I know if I would win reelection? No. I didn't know. I knew I did the right thing because it was the city I lived in. It was the State I grew up in. It was important for us to make the right decision, which at the end of the day is usually the right political decision. That is what this body has to do. It is not fun because people face primaries. They face general elections. Some will win, some will lose. But if we are true public servants, truly it doesn't matter if we are sitting in this room or outside there; we are always public servants. We have to do what is right in this critical time for this country and in the global perspective. If we don't do the right deficit plan, it will ripple through this country and it will ripple through this world in the wrong direction.
Thank you for the opportunity. Thank you for the chance to say a few words, but also I implore my colleagues on the other side to think about today's opportunities for the generations in the future and not about today's elections. And I mean on both sides of the aisle. It is about the moment of what people do for this country.
I yield the floor.