Floor Statements

Mr. President, today I wish to pay special tribute to a man I have admired for many years, Earl Holding. Sadly, Earl passed away April 19, 2013 leaving behind a lasting legacy that garnered the respect of many throughout our State and Nation.

Earl was a Utah icon--a businessman who reached the highest echelons of the business world--yet spent time to help people from all walks of life, and in many pursuits and interests. His work ethic is legendary. From a young age, Earl put in long days at whatever business he pursued, and he was truly an example of someone who wasn't afraid to roll up his sleeves and get his hands dirty--right along with his employees.

In 1949 Earl married his life's partner and eternal sweetheart, Carol Orme. Their marriage was a testament to their partnership as companions--at work and at home. Carol was almost always found at the side of Earl working the land, running hotels, and raising children. They are the proud parents of three children and twelve grandchildren whom they deeply love.

Earl's strength as a business leader has been witnessed by many employees he tutored and led in many successful and important companies including the Little America and Grand America hotels, the Snowbasin Ski Resort, and Sinclair Oil.

In the 1990s Earl was a driving force in helping to bring the Winter Olympic Games to Salt Lake City. His willingness to build world-class facilities to help stage the games cannot be overlooked as one of the key factors in the utmost success of the 2002 Winter Olympics. His contributions will never be forgotten.

Earl and Carol loved the land and enjoyed spending time at their ranches or property throughout the West. He loved to hike, bike, fish, or just enjoy nature in our wonderful part of the world. He had a great reverence for the beauty of our country and always sought to build edifices that paid tribute to that splendor.

Utah and our Nation lost a truly great business leader and giant of a man when Earl left this earthly existence. I know that many people will truly miss his strength, leadership, and commitment to excellence. I will miss all of those things, but I will also miss a cherished friend. I am grateful for the relationship Earl and I have enjoyed for many years and the support and wisdom he always shared.

Elaine and I convey our deepest sympathies to Carol and their family. May our Heavenly Father bless them with peace and comfort at this time. The contributions and impact Earl made on his family, his community, Utah and our Nation will be felt and appreciated for generations to come.

Madam President, on Monday, before the cloture vote on the motion to proceed to the Marketplace Fairness Act, I came to the floor to discuss the need to reinstate the committee process in the Senate.

I have come to the floor many times over the past few months to talk about the importance of restoring regular order. I know a number of my colleagues share the same concerns. Yet here we are today debating another piece of legislation that has not gone through the full committee. It has not gone through the full committee process, and, once again, it appears we will be getting less than optimal results.

I think the legislation before us is a prime example of why regular order is so essential. The Marketplace Fairness Act is a complicated piece of legislation that deserves more thorough examination.

I think the bill is well-intentioned, and I am not fundamentally opposed to it. But make no mistake, there are problems with this legislation as it is currently drafted, problems that likely could have been avoided if the Finance Committee had been given an opportunity to fully consider the bill.

I also understand the feelings of those who feel otherwise. But the committee chairman offered to have a hearing on a set date, a markup on a set date, and go to the floor. I thought that was a pretty good offer.

I am not here today to talk about the process failures we have had with regard to this legislation. I think I have made that point, and others have as well. Instead, I am going to take a few minutes to talk about just a few of the specific problems I see with this legislation and how I propose to fix them.

I have filed an amendment that would address some of my concerns. I believe my amendment would make this bill more workable for businesses and consumers around the country.

For example, my amendment would implement a 5-year sunset on the taxing authority provided under this legislation. Like I said, this is a complicated bill, and we are not precisely sure what the impact is going to be.

Whenever Congress deals with legislation this complex, unintended consequences are to be expected. I believe we need to ensure that Congress has an opportunity to revisit these issues once we have had a chance to see how this bill is implemented. A 5-year sunset would provide that opportunity, but that is not enough. If we are really serious about preventing unintended consequences, we need to change some of the specific provisions of the bill.

One particular troublesome aspect of this bill is the preemption provision. In order to downplay the need for regular order on this legislation, proponents of the Marketplace Fairness Act have repeatedly claimed that the bill has been around in some form or another for over 10 years. And, in a sense, that is true.

However, none of the previous versions of this bill--including the version that was introduced just 18 months ago--have included a preemption provision.

Specifically, this provision states that this legislation ``shall not be construed to preempt or limit any power exercised by a State or local jurisdiction under the law of such State or local jurisdiction or under any other Federal law.''

At first glance this sounds innocuous, but why was it only added to this latest version of the bill? Why was it not included in previous drafts?

My concern is that this provision seeks to address an issue that the authors of the Streamlined Sales and Use Tax Agreement have been wrestling with for years, which is that States are reluctant to surrender any taxing authority at all.

I always have been a proponent of States rights. I have fought hard to preserve the right of States to regulate issues within their own spheres in a number of contexts. But we need to recognize, with this provision in place, we would be backing up State laws with Federal enforcement. By passing this legislation as it currently stands, we would be essentially signing off on laws that have not even been written yet.

I think it is only reasonable to consider whether we should, after passing this bill, expect more aggressive State sales tax laws to be enacted with the promise of Federal authority to enforce them.

My amendment would help us avoid the potential problems with this preemption provision by simply striking it from the bill. As I stated, this is a new provision that deserves more careful examination before being enacted into law.

If the Finance Committee had been given an opportunity to examine this provision more thoroughly, it is possible these concerns could have been addressed. But that is not the world in which we are living. Under the current circumstances, this provision should be removed from the bill.

I should point out that I am not the only person expressing concern about the potential impact of enforcing new State sales tax laws with Federal authority. That is an important issue.

Earlier this week the Securities Industry and Financial Markets Association released a statement saying:

We believe the impact of this legislation on trade and

services has not been adequately explored by Congress. The

bill could

lead to unexpected costs being passed on to consumers of

financial services, including sales taxes on services or

state-level stock transaction taxes.

On Monday, I quoted from a letter delivered to Senators from the American Society of Pension Professionals and Actuaries that argued:

The legislation would allow states to impose a financial transaction tax that would apply to American workers' 401(k) contributions and other transactions within workers' accounts.

These are not concerns that can just be cast aside. These are experts in the financial services industry saying there is a set of problems with the way this bill is drafted.

I am not saying the Marketplace Fairness Act will automatically create these new taxes on financial services. But unless we are sure the legislation would prohibit such taxes, we may be handing a blank check of Federal power to States that are becoming increasingly aggressive with regard to tax enforcement.

That is why my amendment requires the Government Accountability Office to study whether, and under what circumstances, the authority granted under this legislation might allow States to impose taxes on financial transactions or retirement contributions.

My amendment provides a simple, straightforward way to address a potentially serious problem with the Marketplace Fairness Act. My amendment would also require the GAO to conduct a study on the costs incurred by remote sellers in complying with the new sales tax requirements that would be imposed by States under this bill.

There are serious questions regarding the economic impact of this legislation. We are talking about a bill that would impose new costs on businesses throughout the country--costs that will most certainly impact the ability of these companies to grow and expand.

I do not need to tell you that these are perilous economic times.

What impact will the Marketplace Fairness Act have on job creation? We simply do not know. This study would help provide us with some answers. But we need to do more to ensure that this legislation will not harm small businesses throughout the country.

Another concern I have with this bill is that it could potentially create a situation in which small remote sellers are routinely audited by multiple States at the same time. This would be a severe impediment to small business growth and job creation. I think we need to ensure that this legislation does not impose administrative burdens that crush small remote sellers under an avalanche of paperwork.

To help address this concern my amendment would institute a 3-year statute of limitations on State audits of remote sellers. This would provide a uniform rule for State sales tax audits, one that mirrors the current Federal statute of limitations in situations where fraud is not alleged.

One of the major driving forces behind this legislation is the fact that over the years, the number of tangible goods purchased over the Internet has increased exponentially. Proponents of the Marketplace Fairness Act believe it is necessary to level the playing field between Internet and brick-and-mortar businesses.

While this is a fair point, it does not address the issues surrounding the sale of digital goods. Digital goods are often consumed in places that are not at the location of either the buyer or the seller. That being the case, applying State sales taxes to the purchase of digital goods presents a number of problems that are simply not contemplated or resolved under this bill.

Some of my colleagues in the Senate have spent time working on legislation in this area. In addition, the Streamlined Sales and Use Tax Agreement has also considered this issue. However, the legislation before us is completely silent on this and other matters.

These issues demand more consideration than will be possible under this bill. That is why my amendment includes a carve-out for digital goods. Exempting digital goods from the sales taxes authorized by this legislation will give Congress an opportunity to examine this matter more fully and provide a solution that makes sense.

Another problem with this legislation is that it does not take into account the costs businesses will face as they transition into this new sales tax system. There is just no way around it. This bill represents a change to longstanding policy that will require many companies to incur additional costs.

For example, as the bill stands as written, businesses that sell into multiple States will likely have to incorporate multiple software packages into their operations or create their own program. Anybody who thinks about it can see that is a big set of problems.

Furthermore, an online retailer will still be required to pay interchange fees on all transactions regardless of whether the amounts transacted represent the tax or the price of the item purchased. My amendment would help to address this problem by providing for compensation for remote sellers that will be required to withhold and remit sales taxes as a result of this legislation.

A simple, fair system of vendor compensation will help businesses overcome the difficulties of transitioning into the new sales tax regime. The amendment would phase out vendor compensation over a 5-year period. It would begin at 10 percent of amounts collected for 2 years, 8 percent of amounts collected for an additional 2 years after that, and then 6 percent of amounts collected for 1 year. I think this is a reasonable provision. I think it would solve a lot of the problems folks are raising on this bill.

This is a simple approach. It would go a long way to ensuring that businesses, particularly small businesses, are not unduly harmed by this legislation. If you hadn't noticed, the common theme running through all of the provisions of my amendment is a desire to protect small businesses. I think we all want to ensure small businesses are allowed to grow, expand, and create jobs. While I do not think the proponents of this bill want to intentionally harm small businesses, I do not think they have done enough to protect them from the burdens this 11-page piece of legislation would impose.

Let me give you one more example. Businesses making less than $1 million a year in remote sales would be exempt from the sales taxes authorized under this legislation. That may sound like a fair concession, but it warrants further examination. First of all, previous versions of the bill set the exemption at $5 million a year. Why has that number been reduced over time? Is it an arbitrary number that sounds good or is there a specific target in mind? These are the questions I have when I look at that number. My concern with placing the exemption at $1 million is it could subject smaller regional companies and individual sellers to sales tax burdens in States where they only do a small amount of business. In our already fragile economy the last thing we want to do is discourage the businesses from growing, expanding, and creating new jobs. My amendment would set the exemption at $10 million a year in remote sales. It would also index the level of the exemption to inflation to ensure it does not shrink as the years go by.

I recognize coming up with the exact definition of a small business is no easy task. Any number we use will necessarily be a rough figure because it has to encompass different industries and different business models. But setting the exemption at $10 million would protect small businesses in a number of different sectors and ensure we are not discouraging expansion and investment in those types of companies.

I have a number of concerns with the Marketplace Fairness Act as it is currently drafted. These are just some of the concerns I have. I have more, but I thought I would at least make these concerns noticeable by talking about them on the floor. My amendment would go a long way toward resolving these concerns. I respect my colleagues who have worked on this legislation over the years. But I want to work with them to improve the bill.

I respect the distinguished Senator from Tennessee, the distinguished Senator from Wyoming, the distinguished Senator from Illinois. They are sincere, they are dedicated, they believe they are right. I wish to work with them to improve this bill. Everyone knows if we pass this bill in its current form the House is not going to take it. So we may be doing a thankless act here rather than working, as legislators should do, to improve the bill, make it acceptable, hopefully make it so both

Houses will take it, and the President will sign it. But as you can see, there are simply too many problems and too many unanswered questions surrounding this legislation for me to support it as it is.

As I have stated, I believe these problems could easily be resolved by a simple return to regular order. Indeed, if the Finance Committee had been given an opportunity to fully examine this legislation, many of these problems would undoubtedly have been solved already. There are people who do not want this bill; I understand that. The chairman of the committee does not want this bill. But he was willing, knowing he would lose, to go ahead with a committee markup, a committee hearing, and a committee battle on the floor.

As I said, that is not the world we are living in. Once again, I want to work with my colleagues to improve this bill. I hope they will listen to my concerns and consider the changes my amendment would make. If no changes are made to this legislation, if it is forced through the Senate without any real improvement, I am going to have to vote no. That is not where I want to be, but that is what I would have to do. We have already missed some real opportunities to examine and improve this legislation. I hope we can change course and take a good look at all of these implications surrounding this particular bill.

I ask unanimous consent that the pending amendments be set aside, and that it be in order to call up the following amendments en bloc: Collins 744 or 771; Ayotte 759, as amended; Coats 765; Thune 765, with a GAO study; Thune 778, with a GAO study; Coburn 753; Coburn 767; Thune 743; Lee 768; Ayotte 763; Hatch 754; Portman 772; Cruz 794; Coats 797; Portman 792; Paul 755; Cruz 799; Ayotte 776.

I further ask unanimous consent that each amendment be limited to no more than 1 hour for debate equally divided in the usual form; I further ask consent that following the use or yielding back of time on each of the amendments, the Senate proceed to a vote in relation to each amendment with no intervening action or debate.

Mr. President, before I begin, I want to take a moment to say my thoughts and prayers go out to the good people in Boston and other areas where they have had tremendously horrific events and attacks. I hope and pray that all those whose lives were impacted by these tragic events will have a swift and peaceful recovery.

I want to commend all of the law enforcement agencies involved in the investigation that brought the hunt for the perpetrators to a successful end.

Mr. President, over the last few months I have come to the floor several times to discuss the need for the Senate to return to regular order. If the last several years taught us anything, it is that efforts to force legislation through the Senate without full and fair consideration tend to yield unsatisfying results.

Complaints about the lack of bipartisanship have more or less become the norm around here, and we hear all the time about the desire for the so-called grand bargains. Bipartisan agreements don't just happen. I think we would all agree grand bargains cannot be made out of thin air.

Luckily the Senate already has a system in place for fostering these types of agreements. It is called regular order. Yet today the Senate will vote on cloture on the motion to proceed to the so-called Marketplace Fairness Act, and in doing so, the Senate will once again abandon regular order in favor of the whims of the Senate Democratic leadership. This is a bill that falls under the jurisdiction of the Senate Finance Committee, but the committee has not had a markup on the bill. Instead the Marketplace Fairness Act is just the latest in a long line of bills brought before the full Senate without due consideration in the committee of jurisdiction.

This has become far too common. I understand there are those who feel strongly about this legislation, and I admire them and respect the sponsors of the bill who worked hard to address what they see as a major problem with our Nation's tax policy.

However, that simply is not enough to justify yet another abdication of the committee process here in the Senate.

The Senate is organized into various committees of jurisdiction so Members are able to develop and utilize their own expertise on specific issues. When a piece of legislation goes through the committee process, it is thoroughly vetted and examined. This provides an opportunity to resolve technical issues and address various concerns before the bill is brought to the floor for a vote.

Regular order is not a process designed to protect the power of committee chairmen and ranking members. We have regular order and our committee structure so we have an organized way of ensuring our constituents are fully represented and to make sure the legislation we pass is technically sound. The legislation we will be voting on today is a perfect example of the importance of regular order.

The Marketplace Fairness Act is a bill that will have a significant impact on millions of consumers and businesses throughout the country, and clearly, this is no trifling matter.

Most reasonable people would agree that a bill of this magnitude would benefit from full and fair committee consideration, including a markup with an open debate and an opportunity to vote on amendments before it is brought to the floor. However, being reasonable doesn't appear to be part of the equation on the floor today.

I want to stress I am not fundamentally opposed to this legislation. My goal is not to stop it at all costs. Instead, I simply want to ensure it is fully vetted and examined. I know if all sides are able to look at this in a dispassionate way, we might find ways of bringing all sides together, and that is not going to happen the way it is being done now. Therefore, today's vote is, in my view at least, as much a vote on regular order as it is a vote on the underlying bill.

That said, I do have specific concerns about the legislation as it is currently drafted. To begin with, the Marketplace Fairness Act in its current form is a fairly short 11 pages long. This bill essentially provides two avenues for States to compel remote sellers or out-of- State businesses to collect and remit sales and use taxes. Under the bill, the State may either meet specified minimum requirements or be a member State under the Streamlined Sales and Use Tax Agreement, as long as the minimum requirements are met under the agreement.

The Streamlined Sales and Use Tax Agreement is a good deal more complicated than the Marketplace Fairness Act. For starters, at 203 pages, the agreement is about 18 times longer. Since its adoption on November 12, 2002, the Streamlined Sales and Use Tax Agreement has been amended 28 times, most recently last year. It is not a simple little problem here.

The streamlined sales tax governing board has done excellent work in bringing States together to cooperatively and voluntarily address the issues of sales and use tax complexity and administration, just to mention a few issues.

According to the streamlined sales tax governing board, 24 States have adopted the simplification measures in the agreement, representing 31 percent of the population.

The authors of the Marketplace Fairness Act hope to apply its measures to all 50 States and 100 percent of the population.

However, the bill is comparatively short on details. For example, the Streamlined Sales and Use Tax Agreement contains provisions on rules for the sourcing of sales, along with exclusions to those rules. In order to levy the appropriate sales tax, the location and subject matter of the transaction must be determined. This level of detail is not present in the Marketplace Fairness Act.

It is unclear if the floor established on sourcing requirements under this bill is sufficient to protect consumers from unintended consequences. For example, I have received a letter from the American Society of Pension Professionals and Actuaries which is worried that this legislation ``would allow states to impose a financial transaction tax that would apply to American workers' 401(k) contributions and other transactions within workers' accounts.''

Another concern I have with the current version of the Marketplace Fairness Act is that it contains a preemption clause which could make it possible for States to expand the reach of their sales taxes through creative legislating. The Streamlined Sales and Use Tax Agreement at least provides an avenue for the input of multiple States. The States that are not subject to the agreement would, under this bill, be able to legislate knowing that the Federal Government will compel enforcement of their tax law on nonresidents.

I am concerned with the transition costs that will come with this legislation for retailers who have been operating in an environment where they have not been required to collect and remit sales taxes for States where they do not have a physical presence. This legislation would change that almost in an instant.

Before we enact a new sales tax system, we need to take into account the costs that system will impose on businesses of all sizes and the difficulties these companies will face as they adapt to the new regime.

For example, there is the issue of vendor compensation. The Streamlined Sales and Use Tax Agreement currently includes a provision giving States the opportunity to voluntarily compensate remote sellers ``as a measure of good faith'' for registering to voluntarily collect and remit sales taxes into States where the seller has no physical presence. This is included in the agreement because under the current law remote sellers are generally not required to collect and remit the sales tax, and they incur a cost when they do so.

The Marketplace Fairness Act does not include any provision for compensation of remote sellers. I believe this is something we must take into account and examine even more thoroughly. I am also concerned about the small-seller exemption in the bill which would exempt sellers with national remote sales of less than $1 million from the new requirements to collect and withhold sales taxes. This seems like an important concession, but it is not without its problems.

First of all, the cap on the exemption is not indexed to inflation. I think anyone who has observed any part of the roughly 50-year process where the alternative minimum tax has grown from a fairness measure targeting the rich to an ever-increasing burden on the middle class should understand how inflation can radically distort policy outcomes over a period of time. In addition, there are many who argue that the $1 million exemption may be too low. In my view, these are concerns we need to fully consider before bringing the bill to the floor.

Finally, I want to point out that the bill does not include a provision for a

dispute resolution venue. Ideally the bill would give Federal district courts exclusive jurisdiction in matters concerning the implementation of this legislation. Policy changes with such far-reaching effects inevitably lead to unexpected issues and consequences. Giving Federal courts this jurisdiction would ensure greater uniformity and application of this legislation across the country.

These are only a few of the concerns I have regarding the Marketplace Fairness Act. I don't believe these are necessarily fundamental concerns, but they are issues that need to be addressed.

I am quite certain that, if given an opportunity, the Finance Committee could address these issues without inexorably changing the underlying purpose of the bill. However, if we proceed with floor debate on the Marketplace Fairness Act as is, we will not have that opportunity.

The Senate simply cannot continue to operate this way. Once again, we need to restore the deliberative traditions of the Senate, and that means a return to regular order.

I know a number of my colleagues have expressed similar concerns about the need to restore the committee process in the Senate. I hope they will join with me in voting no on cloture on the motion to proceed to the Marketplace Fairness Act. This doesn't necessarily determine how I am going to vote on the final analysis of this, but I sure as heck would like to approach this in a much more intelligent and legislatively profound way than we are doing here tonight.

By the way, we can talk about the fairness of this thing, but there are a lot of stakeholders that are not quite convinced this is as fair as those who are supporting the bill actually claim.

I hope we can have a more deliberative process to examine these matters. The distinguished chairman of the committee has offered to have a hearing on the bill, mark up the bill, and consider it in a regular-order approach in the immediate future as soon as we get back from this next recess. Frankly, I think that is a pretty good offer, and it is one we ought to honor if we honor our committee structure in the Senate.

I yield the floor.

Mr. President, earlier this week, as the debate on this legislation began, the distinguished majority whip said that ``we are here because of Newtown, Connecticut.'' I agree. Had that horrific event not occurred last December, this legislation would not have been introduced.

I share with all Americans the sorrow, frustration, and anger that follows a tragedy like what happened in Newtown or earlier in Aurora, Colorado, and Arizona. I share the sense that we must respond in some way, that we must prevent such tragedies in the future. We feel that way even though we know that such a guarantee is impossible, especially in a country that we want to remain free. But when a tragedy like that occurs, our fellow Americans look to Congress as if to say: Don't just stand there, do something.

If we are here because of Newtown, if this legislation is indeed a response to that tragedy to prevent it from happening again, then it seems obvious that there should be some connection between what happened there and what is happening here. Common sense would say that Newtown must have exposed some deficiency in our laws or some gap that needs to be filled. Common sense would say that a legislative response to Newtown would be something that could have prevented this tragedy and, therefore, can prevent a similar tragedy in the future.

That is what common sense would say, but it is just not true. In fact, the same day that the majority whip said that we are here because of Newtown, liberal columnist Richard Cohen wrote in the Washington Post that this legislation would do ``absolutely nothing to avoid such a tragedy.'' Expanding background checks, for example, would not have prevented the Newtown shooting because Adam Lanza did not purchase the weapons that he used, nor would they have prevented the Aurora shooting because James Holmes not only legally purchased the weapons he used, but would have passed a background check even under the bill before us. We may be here because of Newtown, but the bill we are considering simply does not respond to that tragedy.

As I said, I share the feeling after a tragic event that we must take action. We must, however, resist the temptation to believe that more legislation is always the answer. The truth is that the Newtown and Aurora shooters, as well as the Columbine shooters before them, broke dozens of Federal, State, and local laws already on the books. Federal law has already created more

than 60 different firearms offenses. The Bureau of Alcohol, Tobacco, and Firearms posts on its Web site a reference guide to Federal firearms regulations. It is 243 pages long. But during the first decade of the 21st century, according to the Census Bureau, the percentage of intentional homicides from handguns, rifles, or shotguns all declined rather than rose.

Even more important than these legislative considerations is the fact that public policy in this area impacts fundamental constitutional rights. When other tragedies occur, even terrorist attacks, we often hear that such circumstances must not weaken our commitment to the Bill of Rights, and I do not believe we should do so now.

One of the disturbing arguments I have heard so often during this debate is that Americans do not ``need'' certain guns for certain activities or do not ``need'' to exercise their Second Amendment rights in certain ways. This dangerous view gets it exactly backwards. The place to start is with the individual right that the Constitution guarantees and the burden should be on the government to justify infringing or limiting that right. Imagine if the government told us how much speech or the exercise of religion we ``need'' under the First Amendment or if the government told us how much privacy we ``need'' under the Fourth Amendment. My liberal friends would howl in protest if we treated other provisions of the Bill of Rights in the way they want to treat the Second Amendment.

The Second Amendment guarantees a fundamental right of individuals to keep and bear arms. In fact, the Second Amendment merely codifies a right that already existed, a right that predates the Constitution itself. In 1982, when I chaired the Judiciary Subcommittee on the Constitution, we published a landmark report on the history of this fundamental right. More than 25 years before the Supreme Court officially said so, our report established that the Second Amendment ``was intended as an individual right of the American citizen to keep and carry arms in a peaceful manner, for protection of himself, his family, and his freedoms.''

The President yesterday called it ``shameful'' that the Senate defeated gun control proposals that he favors. I disagree. There was nothing shameful about opposing legislation that failed to respond to the Newtown tragedy, that cannot prevent such tragedies from ever happening again, and that undermines the Bill of Rights.

Two things will always be true as we continue grappling with violence in our society: people, not guns, kill and harm other people and criminals will not obey the law. It does no good to pretend otherwise or legislate for a society in which those things are not true, in other words, for a society that does not exist. We have to address the society we have, a society we want to remain free, a society in which we are protected by the Constitution. I could not support the legislation before us because it failed to meet this standard.

Mr. President, today I wish to pay special tribute to a man I have admired, L. S. ``Sam'' Skaggs. Sam was a private and quiet man yet had a resounding impact on Utah's business climate and many community initiatives that will be felt for generations. Sadly, Sam recently passed away leaving a void to many.

Sam was part of a large family dynasty whose name became known throughout the country in the food and drug industry. Sam was just a young man when the sudden death of his father threw him into the leadership of the family corporation. It was apparent early on that his aptitude for business and his strength as a leader would serve the family and its businesses well for many years to come.

During his leadership the chain of less than a dozen drugstores grew to more than 200 stores. He also oversaw the transition to the larger American Stores brand. His name became synonymous with expertise in the growth of business employing the strategy of a low, high volume approach and the rapid expansion of many common outlets.

Sam was not only known for his business acumen--he was also a tremendously generous philanthropist. He helped found the L. S. Skaggs Pharmacy Institute at the University of Utah College of Pharmacy to provide students and future students of pharmacy to excel. He also made a generous contribution to fund the Special Collections Section of Brigham Young University's Harold B. Lee Library.

His family's ALSAM Foundation has helped many Catholic charities which were close to his heart. He donated the Skaggs Catholic Center, a 57-acre complex that houses Juan Diego Catholic High School, John the Baptist Elementary and Middle School, and the Guardian of Angel Daycare. Galey Colosimo, principal of Juan Diego High School, had this to say about his passing: ``It is a sad day, but we remember him with gratitude for all he has done for us.''

Sam also served his country and left his studies at Utah's Westminster College to enlist in the Army in World War II. It has been said that it was during his days of military service that he witnessed many acts of compassion by Roman Catholic chaplains, which led to his conversion to the Catholic Church and prompted many of his kind acts of service and generosity.

I am grateful that Utah was home to this great business and philanthropic leader. He was a good man, and a true neighbor and friend to many. His memory will live on through the success of the businesses he led and most significantly through the generosity he exhibited to so many wonderful and worthwhile causes that he loved.

Madam President, as the Senate continues to debate the first budget resolution in more than 4 years, I am struck not only by the things we know about the Democrats' budget but also the things we don't know. For example, we know the budget would increase our debt by nearly $7 trillion over 10 years and it would continue on an upward trajectory thereafter. What we don't know is how, while amassing all that debt, our Nation will be able to respond to unforeseeable crises and emergencies in the future.

In addition, we know the budget does next to nothing to address our runaway entitlement spending. What we don't know is how programs such as Medicare, Medicaid, and Social Security would survive over the long term if this budget were to be followed.

Finally, we know this budget includes as much as $1.5 trillion in new taxes. What we don't know is where all that revenue will be coming from. Last week before the budget was released I came to the floor to speak about the rumors the Democratic budget would include reconciliation instructions with regard to taxes. The concern I expressed at that time was the budget would instruct the Finance Committee to close so-called tax loopholes in order to raise revenue and this would, in effect, end ongoing bipartisan efforts on tax reform. As it turns out, my fears were not unfounded. Specifically this budget instructs the Finance Committee to find nearly $1 trillion in new revenues to pay for additional spending.

The deadline under these instructions would be October 1 of this year. That clashes directly with the schedule Chairman Baucus and I have set out for bipartisan tax reform deliberations in the Finance Committee. This budget would instruct the committee to set aside those reform efforts and, instead, comb through the Tax Code looking for new revenues. In addition, this budget includes deficit-neutral reserve funds and sequester replacement which total more than $500 billion. According to the Budget Committee, this new spending would be paid for by closing so-called tax loopholes for the wealthy and corporations.

In addition to the $1 trillion in reconciliation instructions, this budget includes potential for another half trillion in new taxes. This means up to $1.5 trillion in fresh taxes from this budget will be used to expand our already bloated Federal Government.

The budget repeats the common refrain we hear from our friends on the other side of the aisle that our Tax Code is so full of so-called loopholes which benefit only the wealthy. According to their arguments, these loopholes may be closed at any time to generate untold amounts of revenue without affecting the middle class or our economy.

During last week's Budget Committee markup, the chairwoman claimed they could hit their revenue target by ``closing loopholes and cutting unfair spending in the Tax Code for those who need it the least.''

This statement is simply incorrect. First of all, a loophole is something created by accident or carelessness which is then exploited. When my colleagues talk about loopholes, they aren't talking about backdoors created unintentionally or sneaky abuses of the Tax Code, they are talking about tax expenditures, all of which were deliberately placed into the Code for specific reasons. More often than not my Democratic colleagues use the term ``loophole'' to describe items in the Tax Code they don't like. This doesn't make the label any more honest.

Earlier this week one of my friends on the other side of the aisle took this rhetoric about loopholes up a notch. He described the Tax Code as this treasure trove of special deals and earmarks for the rich and well-connected. He went further by saying, We are at the place where the lobbyists wield the sweet corporate tax deals. He blamed Republicans for this, arguing we were responsible for the existence of these so-called loopholes and earmarks.

Admittedly there are some narrow provisions in the Tax Code--too many, if you ask me. There are supporters of these provisions on both sides of the aisle. Let's be honest. There aren't any real loopholes in the Tax Code, nor are there any earmarks. There are simply tax expenditures. If you look at a list of the largest tax expenditures, you will find a number of deductions and preferences which disproportionately benefit the middle class, middle-income taxpayers. That being the case, if my colleagues want to raise significant amounts of revenue by eliminating tax expenditures, they will have to do so by raising taxes on the middle class.

Look at this chart. If you look at this chart, you will see the revenue targets in the Democratic budget. First up, there is $975 billion right near the reconciliation instructions to the Finance Committee. Below that are additional revenues included in this budget. As I have mentioned, all told, if you include the specified revenue target for reconciliation and potential increases elsewhere, the budget may include more than $1.5 trillion in tax increases. Look at this.

Next we have a list of all the tax increases Senate Democrats have voted for over the last 2 years, including the elimination of tax breaks for oil and gas companies, increased taxes for carried interest and the so-called Buffett rule. All told, these tax hike proposals could raise about $108.3 billion in new revenues. At the bottom we see the difference between that number, the tax increases which Senate Democrats have actually voted for and the potential tax hikes which are included in the budget.

As I said, we can give the Democrats credit for having identified about $108 billion in tax increases they support, but that would mean there is as much as $1.4 trillion in unidentified tax increases in this budget.

How would they reach their target? The budget doesn't spell it out. It leaves more than enough room to speculate. For example, you might simply think they would adopt the idea from President Obama's past budgets to cap itemized deductions for higher income earners at 28 percent.

This seems unlikely for two reasons. First, to date very few Democrats in the Senate have come out in favor of that proposal. Indeed, it would impact things such as charitable contributions and pension deferrals which most have been unwilling to change. Second, and more important, according to the Joint Committee on Taxation, that proposal would generate only about $423 billion in new revenues over 10 years, which would leave my colleagues about $1 trillion short of their revenue goal. Still, I can't help but wonder if the tide has shifted with regard to this proposal.

With the Senate budget staking so much on the elimination of so- called loopholes, it will be interesting to see how many Democrats shift positions and endorse the President's proposal, even though it will not yield nearly enough revenue to reach the targets outlined in this budget.

Staying in the world of capping itemized deductions, there is also the proposal outlined by CBO in 2011 to cap all itemized deductions for all taxpayers at 15 percent. This would effectively raise taxes on every tax filer in every bracket who itemized their deductions. Make no mistake. This would be a tax increase on the middle class, meaning it would violate the promises made by President Obama and other Democrats to protect the middle class from further tax increases.

However, it would also generate enough revenue to be in the neighborhood of what the Democrats have outlined in their budget. All told, this proposal would, according to CBO, raise about $1.2 trillion in revenue over 10 years. Given the outlandish revenue proposal in the budget, this idea, while punitive and damaging to the middle class, can't be ruled out entirely.

I have another chart here which lists the top 10 tax expenditures according to the Joint Committee on Taxation. These 10 items account for 71 percent of what Democrats have called spending in the Tax Code.

What is No. 1 on this list? I will give you a hint. It is not corporate jet depreciation or carried interest. No, it is the tax-free treatment of employer-provided health care. Do you want to do away with that?

What is No. 2 on the list? It is the tax-deferred benefit for retired savings plans.

How about No. 3? It is the measure which provides relief against double taxation on investments. I am referring to the reduced rate on long-term capital gains and dividends. This rate went up recently. It was raised by 59 percent in the fiscal cliff bill. Raising it even more is a sure-fire recipe for job destruction and even slower economic growth.

No. 4 is the deduction for State and local taxes.

No. 5 is the home mortgage interest deduction. Do you want to do away with that?

No. 6 is the tax-free treatment of Medicare benefits.

So far I don't see a lot of expenditures aimed solely at benefiting the wealthy. No, most of these provisions benefit a significant number of middle-income taxpayers or earners.

Three of the four next items on the list are refundable, meaning the person filing the return can receive a check even if they owe no income tax. This is truly where there is spending in the Tax Code. These provisions exclusively benefit lower and middle-income earners. They are not available to those making over $200,000 a year.

The point is not simply there are a lot of popular tax expenditures. I think people know that already. No, my point is, given the difference between the revenue target in the Democrats' budget and the tax increases they supported on the record, there is no telling how they plan to actually raise their revenue. If they are serious about closing so-called loopholes to the tune of over $1 trillion, this list is where the real money is. If we are talking about raising that kind of revenue by eliminating tax expenditures, we are necessarily talking about provisions which benefit the middle class. It can't be raised through eliminating tax breaks for oil companies. It can't be raised by instituting the Buffett rule. It can't be raised even by eliminating all itemized deductions for millionaires.

I am sure my colleagues will disagree with this assessment. However, the burden is on them to show where I am wrong, and they can't.

This is their budget and their revenue target. If they want this budget to be taken seriously, the Democrats should come out and state specifically their plan for raising their $1.5 trillion in additional revenue. You can't simply say: We want the Finance Committee to figure out how to raise taxes by another $1 trillion to finance our spending spree. That is irresponsible and, as I said, it poisons the well for fundamental tax reform. You can't simply say: We want to turn off almost half a trillion dollars of sequestration spending cuts, but we won't say how we will pay for it. This is irresponsible and misleading to the American public.

Finally, I wish to point out the budget would also mark a significant shift in the position held by many Democrats with regard to corporate taxes. The Obama administration has repeatedly expressed support for approaching corporate tax reform in a revenue-neutral manner. Prominent Democrats on the Finance Committee have also publicly expressed support for revenue-neutral corporate tax reform in order to make America more globally competitive.

However, the Democrats' budget states: Eliminating loopholes and cutting unfair spending in the Tax Code for the biggest corporations must be a significant element of a balanced and responsible deficit reduction plan.

You cannot have it both ways. Revenue-neutral corporate tax reform means paring back corporate tax expenditures and lowering the corporate tax rate. Revenue-neutral corporate tax reform does not mean, and cannot mean, eliminating tax expenditures which some Members don't like because it polls well, and then using some or all of the resulting revenue gain to further expand the government. This is not tax reform of any kind, this is a tax hike pure and simple. I would be interested to find out whether the Democrats who have publicly expressed support for revenue-neutral tax reform will support this budget.

More generally, I wish to know where the Democrats stand on corporate taxes. Do they want to raise them, or do they want to make American companies more globally competitive? I hope it is the latter. You cannot do both.

When you look at the tax provisions of the Senate budget, it is clear it is nothing more than a political document.

I suspect my colleagues on the other side of the aisle know they cannot hit their revenue targets without impacting the middle class. I think they also know we can't do revenue-neutral corporate tax reform and at the same time raise more tax revenue from the corporate sector. I think they know that in real-world terms, the tax provisions of this budget are several bridges too far. So in the end, I have to assume there is a political calculation being made.

My colleagues apparently believe it makes good political sense to talk about reducing the deficit on the backs of the wealthy and less popular corporations rather than making difficult choices on spending.

The American people need a real blueprint for our Nation's fiscal future, not more talking points. Once again, I urge my colleagues on both sides of the aisle to reject this budget.

Now I wish to take just a few seconds to talk about one of the budget amendments I expect will be discussed and considered on the floor. I understand it is described as an amendment to ``establish a deficit neutral reserve fund to allow States to collect sales and use taxes already owed under State law.'' This amendment is intended to be a proxy vote for a bill called the Marketplace Fairness Act.

I greatly appreciate the diligent efforts of the supporters of this bill, including Senators Enzi and Alexander.

Clearly, a lot of work has gone into this legislation. However, over the last few months, I have been on the floor several times to talk about the importance of restoring regular order in the Senate. The Marketplace Fairness Act has been referred to the Finance Committee. Both Chairman Baucus and I have the view that legislation is more properly considered within the context of the committee's current bipartisan efforts on tax reform.

However one feels regarding this amendment, it is undeniable that the Marketplace Fairness Act is controversial and that concerns about and suggestions for the legislation have been raised by many stakeholders. I have met with many people on both sides of the Marketplace Fairness Act, including people from Utah, and have heard many concerns. I am not here to take a position on the substance of this legislation, only to note that it deserves to be fully debated in committee and I am concerned this amendment might not allow those debates to occur.

For this reason, I intend to vote no on this amendment at this time.

What I have said is extremely important. It is not partisan. It is pointing out these doggone problems with this bill, and I hope my friends on the other side will start looking at things such as this. Because we can play politics with these things all day long, but that doesn't make it right and it doesn't make it so we can do what my friends on the other side would like to do, which is raise revenue so they can spend more.

It boggles my mind. We have to find some way of living within our means in this country. If we don't, we are creating a new generation of debtors--our children, our grandchildren, and in many cases--in my case--great-grandchildren as well. It is the debtor generation now. Every one of them owes well over $50,000 personally, and that is going to go up exponentially if we don't watch what we are doing.

In fact, even if we do watch what we are doing, it is still going to go up. But we have to do everything in our power to give them a future. The debtor generation is all those who are less than 50 years of age but especially our youth. We simply can't barter away their future because we don't have the guts to stand up and do what is right.

I yield the floor.

Mr. President, I rise to say a few words in support of amendment 156 offered by Senator Grassley and myself.

This amendment would strike the tax reconciliation instructions from the budget and, instead, create a deficit neutral reserve fund for pro- growth, revenue-neutral tax reform.

The American people have had it with our current tax code.

It is too complex.

It is overly burdensome.

And, it is an impediment to economic growth and our global competitiveness.

Members from both parties need to work together to reform our tax code to provide greater fairness and simplicity and to ensure that it encourages growth.

In order to do that, we need to work at finding ways to broaden the tax base in order to lower the marginal tax rates.

That is how we encourage economic growth.

That is how we create jobs.

For the first time in many years, there is bipartisan agreement in both the House and Senate on the need to move forward on tax reform.

Unfortunately, rather than letting those efforts move forward, the budget before us today would hijack those efforts.

Under this budget, the Finance Committee would be instructed to scour the tax code in search of nearly $1 trillion in new revenues in order to pay for new spending.

It is bad enough that this budget would greatly increase our Nation's debt. And, it is bad enough that it doesn't balance at any point.

But, to add massive tax increases on top of that is simply unconscionable.

As I said this afternoon, more than 70 percent of the revenue loss due to tax expenditures comes from the top 10 tax expenditures, most of which predominantly benefit the middle class.

As Senator Grassley stated last night, the top 20 tax expenditures-- which also greatly benefit the middle class--account for 90 percent of the revenue loss.

So, as we can see, we simply cannot generate a significant amount of revenue--certainly not in the magnitude imagined under this budget-- without negatively impacting the middle class.

I hope my colleagues will reject this attempt to once again raise taxes on the American people.

Toward that end, I hope they will support our amendment.

I will recap quickly. The Grassley-Hatch amendment assures tax reform will travel on a bipartisan path. It corrects the partisan process in the budget with an elimination of reconciliation. That is all it does, and we ought to all support it.

Mr. President, what we want to do is repeal the $30 billion costly medical device tax. It is a gross tax on these businesses. We have already lost 5,000 jobs and we will lose 46,000 more.

I hope everybody will vote for this.

Mr. President, I yield back the remainder of my time and ask for the yeas and nays.

Madam President, I rise to set the record straight. Amendment No. 432, which characterizes the House budget plan as a plan to turn Medicare into a voucher program, is patently false. This amendment is not trying to voucherize Medicare. That is not true. I think it is ironic that my colleagues on the other side of the aisle attack the House budget proposal when the Affordable Care Act took $716 billion from the bankrupt Medicare Program to create an unsustainable new entitlement.

In no way can the House budget be considered as turning Medicare into a voucher program, and we reject the characterization of amendment No. 432. The House budget proposal draws from bipartisan proposals put forth by the Breaux-Thomas Medicare Commission, President Bill Clinton, and Domenici-Rivlin.

We are prepared to take the amendment. We will be happy to take it by unanimous consent.

Madam President, our national debt currently stands at nearly $17 trillion. It is difficult to believe it has reached that level. What is more difficult to believe is that there is anyone in this country who can look at that number and not feel a sense of urgency to address our Nation's spending and debt problems. Yet, as we begin to debate the first budget resolution in over 4 years, it seems there are many in this very Chamber who seem to think the size of our debt is no big deal. If you take a good look at the budget we are debating this week, there is really no other conclusion to draw. The raw overall numbers make a pretty convincing case that the authors of this budget see no real need to change course when it comes to our debt.

The budget before us maintains our current unsustainable spending and debt trajectory. It doesn't balance, not at any point. Its goal is to grow government, not jobs and the economy. Under this budget, the national debt would increase by more than $7 trillion over the 10-year window; that is, if we are lucky. In 2023 the debt would be over $24 trillion and rising rapidly. How can anyone bring a budget such as this to the floor--one that massively increases our debt without even a faint attempt to reach balance at any time--and claim to be fiscally responsible?

But that is not all. I haven't even gotten to the worst part yet. True enough, this budget will do some pretty irresponsible things, but the real story is what this budget doesn't do. Everyone knows the main drivers of our national debt are our entitlement programs--Medicare, Medicaid, and Social Security. That fact has been confirmed by the Congressional Budget Office, the programs' boards of trustees, and every serious economist or analyst who has spent longer than 5 minutes looking over our Nation's finances. Over the next 10 years, we will spend $6.8 trillion on Medicare, $4.4 trillion on Medicaid, and $11.2 trillion on Social Security, for a combined total of $22.4 trillion. That is trillion with a ``t.''

Medicare by itself is extremely problematic. While the percentage of workers paying into Medicare has been in decline for over a decade, 10,000 seniors join the program each and every day. According to the budget we are debating this week, Medicare will account for $504 billion this year alone. Now, that comes out to about $1.4 billion a day. Over the next 10 years, Medicare spending will increase by over 70 percent, according to the Medicare Payment Advisory Commission's most recent report. By the end of that time, we will be spending more every year on Medicare than on our entire national defense. Even President Obama, who has generally been reticent to consider real changes to Medicare, has admitted that absent reform, the program will be bankrupt within 10 years.

The story is not any better with Medicaid. In 2013, once again according to the very budget we are debating, Federal spending on Medicaid will account for about $265 billion, and if you include what States are spending on Medicaid, that is $450 billion. That is $1.2 billion a day for just this one program. Over the next 10 years, Federal Medicaid spending as a share of the U.S. economy is set to grow by 37 percent, according to OMB. By 2020, 84 million people--nearly one out of every four Americans--will be dependent on Medicaid.

With Social Security, we have a problem, facing more than $20 trillion in unfunded liabilities over the long term. In the short term, the disability insurance trust fund within Social Security is projected to be exhausted by 2016. That means that in about 3 years, the disability insurance benefits will, by law, have to be cut by 21 percent. All combined Social Security trust funds will be exhausted by 2033, at which time all Social Security benefits will have to be cut by 25 percent.

So it isn't just that we are spending a lot of money on these programs, it is that these programs are structurally unsustainable. That is why the Director of the nonpartisan Congressional Budget Office has referred to our health care entitlements as our ``fundamental fiscal challenge.'' It is why the Social Security Board of Trustees, which includes a number of high-ranking officials in the Obama administration, has said with regard to Social Security that ``legislative action is needed as soon as possible.''

Entitlement reform is not an option, it is a necessity. It is not a matter of politics, it is a matter of math. America's social safety net is coming apart at the seams, and if these programs are going to be there for future generations, they need serious structural reforms. If we do that now, it will be much easier than if we wait too much longer.

This isn't new information. It isn't privileged or classified. Anyone paying attention to our Nation's fiscal situation is aware these challenges exist. So what do the authors of the Senate budget propose that we do about it? The answer, unfortunately, is nothing.

Here is a perfect illustration--the Murray budget entitlement plan. We are going to have $22.4 trillion at the end of 10 years. Well, let me just say for a second that if you look at that chart, you will see, as I have stated, that we are projected to spend a total of $22.4 trillion on Medicare, Medicaid, and Social Security over the next 10 years. That is the red bar on the chart. All total, the Democrats' budget would reduce Medicare spending by $46 billion and spending on Medicaid by $10 billion. It would make no changes whatsoever to Social Security.

Adding those numbers together, the Democrats would reduce entitlement spending by only $56 billion over the next 10 years or by 0.2 percent. That is the yellow bar, if you can see it, right here on the chart. You heard that right, Madam President. The budget resolution before us would reduce entitlement spending by two-tenths of 1 percent over the 10-year budget window.

Here is the Murray entitlement spending versus the baseline. If you look at this next chart, you can see the path in entitlement spending over the next 10 years in blue. It is the upper line here. That is Medicare, Medicaid, and Social Security spending, all combined, with no changes to our budget. The Murray budget spending path for entitlements is in red. It is this little sliver right here. That is the Murray budget. See the difference? The answer, of course, is that you cannot. Put simply, this budget ignores our unsustainable entitlement spending and allows it to continue on a path that will bankrupt these programs.

The Democratic majority has opted to continue to look the other way as our entitlement programs collapse under their own weight. This is simply irresponsible, and it is an insult to middle-class Americans who rely on these programs and want to keep them protected.

In January 2009, President Obama, when speaking on entitlements, said:

. . . what we have done is kick this can down the road.

We're now at the end of the road, and we're not in a position

to kick it even further.

With this budget, the Democrats are refusing to even acknowledge that there is even a can that needs to be kicked. The budget doesn't even pay lipservice to the need for reforms in our entitlement spending. It ignores the problem entirely.

Indeed, if you read the documents accompanying this resolution, you will find nothing even suggesting there are any problems with these programs. Instead, you will find a multitude of statements accusing Republicans of wanting to ``weaken'' Social Security, ``dismantle Medicare,'' or make ``Draconian cuts to Medicaid.''

There is a lot of talk about keeping promises but literally no mention of

how these promises can or will be paid for. And there is no recognition that this budget sets in place benefit cuts of over 20 percent for disabled American workers in a few short years, while watching other threads of the social safety net fray as trust funds become exhausted. Anyone supporting this budget will be sending a clear message to younger generations of Americans, which is that they don't really care whether the safety net will be there for them.

This budget is further evidence of what has become a key difference between Republicans and Democrats. Over the last 2 years, Republicans have united around the principle of entitlement reform. We put forward plans that make tough, and sometimes politically difficult, decisions in order to preserve programs such as Medicare, Medicaid, and Social Security for future generations. Republicans haven't chosen this path out of political convenience, that is for sure. This is simply what the reality of our fiscal situation demands. Rather than acknowledging this same reality, Democrats have opted to attack and vilify any Republican who even suggests that changes to these programs are necessary. They have continued the same talking points of the past, claiming that all of our Nation's fiscal problems can be solved simply by asking the so- called rich to pay a little more in taxes. All the while, according to Democrats, there do not need to be any substantive changes to entitlements. They have pursued this course even as our debts continue to mount along with the evidence that suggests their approach simply is not working.

The budget we are debating this week is proof not only that the Democrats are more interested in politics than solutions but also that their policies simply won't work in the real world. This budget would do all the things Democrats say they want to do to grow the government. It would raise taxes by as much as $1.5 trillion. And, once again, it would leave Medicare, Medicaid, and Social Security just as they are. Yet, in the end, this budget never balances.

Under this budget, our Nation's debt would continue to grow, making it more difficult to respond to real crises or emergencies in the future. In the end, our entitlement programs would continue on their path to bankruptcy, and we would end up with an even bigger government that we cannot pay for.

The Washington Post editorial page, not typically known for being overly critical of the Democrats' policies, assessed this budget, saying:

Partisan in tone, and complacent in substance, [the budget]

scores points against Republicans and reassures the party's

liberal base--but deepens these senators' commitment to an

unsustainable policy agenda.

The editorial concluded by saying that this budget

. . . gives voters no reason to believe that Democrats have

a viable plan for--or even a responsible public assessment

of--the country's long-term fiscal predicament.

I couldn't have said it better myself.

The American people have waited for over 4 years for the Senate Democrats to produce a budget. After all that time, we now finally have on paper their blueprint for America's future. Unfortunately for the American people, the blueprint does not address our Nation's most pressing fiscal challenges. Instead, it would continue an unsustainable status quo in terms of both policy and politics. This budget will not grow the economy and jobs; it will grow the Federal Government. This budget will never attain balance; it just taxes more and spends more. This budget will not reduce our debt; it buries the middle class even further in debt. This budget will not preserve the safety net for future generations; it allows entitlement programs to perish.

That being the case, I urge my colleagues on both sides of the aisle to reject this budget and demand a more responsible plan for our country. We need to do better around here.

Admittedly, we need to have both parties working together. We used to do that. I used to be part of that; I wouldn't mind being part of that again. But we have got to find some way of getting together and getting these fiscal problems under control. We can't continue to grow the Federal Government, and we can't continue to ignore the structural defects of Social Security, Medicaid, and Medicare that are eating us alive and are going to really eat us alive over the next 10 years, and there isn't a thing in this budget that does anything to solve this problem.

Madam President, I suggest the absence of a quorum.

Madam President, next week the Senate will for the first time in over 4 years----

I am sorry, I thought we were in morning business.

Approximately 15 minutes. Is that too long?

I will withdraw.

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

Madam President, next week the Senate will, for the first time in over 4 years, debate a budget resolution on the Senate floor. While I have many qualms as to the substance of the budget we will be debating, I have to say that in terms of the process, this is a welcome development.

The American people have waited too long for the Senate to fulfill its basic legal obligation to produce a budget every year. Yesterday, with the release of the Democrats' budget plan, that delay officially came to an end.

Of course, now that I have had a chance to look over that budget, my praise for it ends there. The budget we will be debating next week is, to put it bluntly, a cynical political document. It is not designed to address our Nation's pressing fiscal challenges but, rather, it is to provide a Democratic base and have a fresh supply of political talking points.

Rather than addressing our government's problems and runaway entitlements, the Democratic budget contains yet more wasteful spending. In order to pay for that spending, the budget contains what could be around $1.5 trillion in tax hikes, much of which will necessarily impact the middle class and small businesses. It would hijack the bipartisan tax reform efforts currently underway in both the House and Senate by instructing the Senate Finance Committee to abandon these efforts in order to scour the Tax Code for additional revenues to the tune of nearly $1 trillion.

In addition to the reconciliation instructions, the budget includes potentially $\1/2\ trillion in additional tax hikes in order to replace the sequester and to offset more stimulus spending.

Even with all of these new revenues in place, the Democratic budget does not balance--not at any point. Under this budget, the government would be still be spending more than it takes in at the end of the 10- year budget window. By the end of it all, our national debt would be over $24 trillion, an increase of more than $7 trillion, with no relief in sight.

Gross debt, relative to the size of our economy, never dips below 94 percent in this budget. As the nonpartisan Congressional Budget Office warns, when the debt is that high, we as a Nation have less flexibility to respond to unexpected challenges. CBO also warns that when the debt is that high, there is increased risk of a fiscal crisis and soaring interest rates. Make no mistake: If interest rates rise even slightly more than assumed in this budget, Federal spending on interest payments would increase substantially, moving us even closer to a fiscal crisis.

One of the most disappointing and disheartening parts of the budget produced by the majority in the Budget Committee is that it makes no attempt whatsoever to address entitlement spending. Instead, it would keep programs such as Medicare, Medicaid, and

Social Security on autopilot, making it far more difficult to preserve them for future generations.

Let's take a look at the numbers, because they are astounding. Over the next 10 years, we will spend $6.8 trillion on Medicare, $5.9 trillion on Medicaid, and $11.2 trillion on Social Security, for a combined total of $24 trillion.

The Democratic budget would reduce that spending by only $56 billion over 10 years, which amounts to a minuscule 0.2 percent reduction--that is right, 0.2 percent. Let's put that number in perspective.

Despite the acknowledgment of the administration, the nonpartisan Congressional Budget Office, and any sane analyst on the Federal budget that entitlement spending is unsustainable, the Democratic budget proposes to do next to nothing about it. Rather, they settle for spending reductions over a 10-year period that amount to about 5 days' worth of Federal spending.

This lack of attention to entitlements sends a clear message to younger generations. That message, unfortunately, is, we don't care that the social safety net will not be there for you. And it won't be for our young people, especially if we keep going this way. Federal entitlement spending is the biggest driver of our debts and deficits, and absent real structural reforms, these programs threaten to swallow up our government and take our economy down with it.

This is not rhetoric or supposition. These are cold, hard facts. Yet, with their budget, the Democrats have apparently opted to ignore reality and let these programs continue on their current unsustainable trajectory. On that trajectory, the safety net frays. On that trajectory, disabled American workers face benefit cuts of over 20 percent in 2016. And on that trajectory, trust funds associated with the safety net become exhausted.

The course charted by this budget is simply irresponsible. No one serious about governing would choose to ignore entitlement spending for another 10 years. Even President Obama--hardly a picture of bravery when it comes to taking on entitlements--has proposed as much as $530 billion in Medicare and Social Security reforms. This budget undercuts the President's proposal by nearly 90 percent.

So once again this budget is not about dealing with reality; it is about politics, pure and simple. Instead of working with Republicans on bipartisan solutions to our Nation's problems, the Democrats have decided to reveal their campaign talking points for next year.

There are some of us here in the Senate who have been looking for opportunities to work with those on the other side to address what are, in the view of many, the defining challenges of our time. For example, on January 1, I came to the floor to propose five bipartisan solutions to reform Medicare and Medicaid and asked my colleagues to work with me on this effort. These proposals are not my ideal solutions to the problems facing these programs. Instead, they are five solid ideas that have all had bipartisan support in the recent past.

For example, I propose raising the Medicare eligibility age-- something President Obama and several other Democrats have at one time or another supported. I also suggest limiting Medigap plans from providing first-dollar coverage in order to prevent overutilization of Medicare benefits. This was supported by the Simpson-Bowles Commission and was also included in the Biden-Cantor fiscal negotiations in 2011.

Another one of my proposals is to streamline cost-sharing for Medicare Part A and Part B. Like the Medigap proposal, this idea was also supported by the Simpson-Bowles Commission.

In addition, I propose introducing competitive bidding into Medicare to allow for greater competition in order to reduce costs and improve quality of care. While some have deemed this idea controversial, President Clinton proposed a similar idea in 1999 as part of a major set of Medicare reforms--President Clinton, no less.

Finally, I propose instituting per capita caps on Federal Medicaid spending. This was another Democratic Party idea. It was first proposed by President Clinton in 1995, and at that time all 46 Democratic Senators signed a letter supporting this very policy.

I came to the floor in January in hopes that I could bring some of my Democratic colleagues on board with these proposals so we could at least start a bipartisan conversation on entitlement reform on the floor. My door and my mind remain open to my colleagues across the aisle on these ideas.

Today, as I look at this proposed budget, it is clear I shouldn't be looking to anyone supporting this budget to work on anything resembling a bipartisan approach. Indeed, if this budget passes as is, without any significant changes, I may have to look outside of the Senate entirely.

That is why earlier today I reached out to President Obama and asked him to seriously consider my five bipartisan entitlement reforms. The President talks a lot about grand bargains and balanced approaches, and he has a very winning personality, as was evidenced as he spoke to us Republican Senators today. The budget unveiled yesterday, however, is a step in the wrong direction. I hope he will demonstrate real leadership and engage in these enormous challenges in a meaningful way.

The budget proposed by the Democrats on the Budget Committee is fiscally irresponsible and will be detrimental to the current and future generations of American workers who depend on the social safety net and who want to see it preserved for the future. This budget grows government, not the private economy. This budget taxes too much and spends too much. This budget doesn't balance today, tomorrow, or ever. This budget keeps us at the edge of a fiscal crisis, with no flexibility to respond to future emergencies. That being the case, this budget should be soundly rejected by anyone who cares about our Nation's future and about prosperity and opportunity for America's middle class.

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

Mr. President, it is no secret that our Tax Code is in dire need of reform. Although there are differences of opinion about how best to fix our Tax Code, I do not think there is anyone in the Chamber who would argue in favor of keeping our current code as it is.

As I have said before, I believe there is, for the first time in many years, real momentum to get something done on tax reform this year. The leaders of the tax-writing committees on both sides of the aisle have expressed a desire to move forward on tax reform, and there is real bipartisan support in both the House and the Senate.

This is going to be difficult, there is no question about it. It is going to be very hard to form and maintain a coalition in favor of a set of reforms that will simplify the current Tax Code and promote economic growth. It is going to take a lot of hard work and it is going to take people from both parties to get it done. But I think we can succeed.

However, last week it was disheartening to hear the chairperson of the Senate Budget Committee talk about the possibility of including instructions for tax reform in a budget reconciliation package. This news was discouraging for a number of reasons. First and foremost, reconciliation, by its very nature, is a partisan process. In the few instances in recent history when reconciliation resulted in legislation, there was bipartisan support at the outset. That simply is not the case with this proposal. If the Budget Committee goes this route, it will needlessly inject partisanship into a process that, if it is going to have any chance of success, must be bipartisan.

There is simply no way to pass a purely partisan tax reform package with the current makeup of Congress. Make no mistake, if the Senate majority pursues this course of action, it will poison the well for tax reform. It will make it all but impossible.

I would urge my colleagues on the Budget Committee to resist this temptation. If they really want to see tax reform succeed, they should let the tax-writing committees in both the House and Senate do their jobs.

Another concern I have is that the statements by the Budget Committee chairwoman make it unclear whether she is arguing in favor of tax reform or simply in favor of raising taxes. My suspicion is she is talking about the latter. It has become more and more common for my friends on the other side of the aisle to argue in favor of simply eliminating so-called tax loopholes in order to raise revenue and then calling the process ``tax reform.''

Indeed, the President used this very same tactic in the State of the Union. He stated his support for ``comprehensive tax reform,'' but he spoke almost exclusively about using the process to raise more revenue. Some of my colleagues have made similar arguments in the Senate.

That is not tax reform at all. Tax reform, as it has been traditionally proposed and understood, is a process of eliminating certain preferences in order to broaden the tax base and lower the rates. This is how you simplify the Tax Code. This is how you make it more efficient and fair. Most importantly, it is how you make the Tax Code more conducive to economic growth.

If you are eliminating select deductions and preferences only to pocket the revenue for future spending, you are not reforming the Tax Code, you are simply raising taxes. If the Budget Committee is about to report a budget which includes restrictions for tax reform, I can't help but assume the process will be more about raising revenues than it will be about actually fixing our broken tax system.

Once again, if this is the case, the Budget Committee would be injecting partisanship into what has up to now been mostly a bipartisan effort. At the same time, they would be perpetuating the myth that our Tax Code is full of so-called loopholes which benefit only the rich. I have spoken about this at length on the Senate floor, but the message bears repeating.

The term we hear most often to describe deductions and preferences in

the Tax Code is ``tax expenditure,'' which implies that by allowing people to keep more of their money, the government is somehow engaging in spending. Indeed, the President has even gone so far as to refer to deductions and preferences, which reduce an individual's or business's tax burden, as ``spending in the tax code.''

As I said before, when many of my Democratic friends talk about tax reform, they are usually talking about eliminating these provisions in order to raise revenue so they can spend it. Far too often they refer to these provisions as loopholes. For example, the Budget Committee chairwoman was quoted last week as saying her committee is looking at closing loopholes as a means of reducing the deficit.

Let me make one thing clear: Describing tax expenditures as loopholes is simply and deliberately inaccurate. A loophole is something Congress did not intend; and, in general, we would eliminate loopholes once we learned they were being improperly exploited.

Tax expenditures, by contrast, are placed by Congress into the Tax Code deliberately. For example, the largest tax expenditure is the exclusion for employer-provided health insurance and benefits. Do we want to do away with that?

Another one of the largest tax expenditures is the home mortgage interest deduction. Some would like to do away with that and millions would not--especially all the home builders around the country. Whether these expenditures benefit someone in the middle class or one of the so-called rich, they are not loopholes. These are not tax schemes some lawyer or accountant concocted to help his clients game that system. These are broad-based tax incentives used by many Americans.

Favorable tax treatment of tuition expenses could be labeled spending through the Tax Code or a ``loophole,'' but you don't hear many people using those terms to explain them. Rather, my friends on the other side of the aisle use the term ``loophole'' to describe things they do not like and ``investment'' to describe things they do like. This is about picking winners and losers and not about tax reform.

Even if you disagree with a particular tax expenditure, it is simply dishonest to refer to it as a loophole. An honest debate requires recognition that all of these tax expenditures were designed by Congress with economic or social goals in mind and are not tax escapes created by accident or sneaky abuses of the Tax Code.

Furthermore, if we are talking about eliminating tax expenditures, we need to be clear about who benefits from them. If you look at the largest list of tax expenditures, you will find the ones most often cited by my colleagues on the other side, such as bonus depreciation on corporate jets or tax breaks for oil companies, are not among them.

What you will find is a list of deductions which disproportionately benefit the middle class. This being the case, if my colleagues are serious about significantly reducing the deficit by eliminating deductions and so-called loopholes, they will necessarily be talking about raising taxes on the middle class. Indeed, if they only focus on those provisions which benefit the so-called rich, they will not be able to raise enough revenue to make a serious dent in the deficit.

For example, let's take a look at the mortgage interest deduction. According to the Joint Committee on Taxation, only 35 percent of the benefit of the mortgage interest deduction goes to taxpayers with incomes over $200,000 per year. The remaining 65 percent goes to taxpayers who make less than $200,000. By a ratio of almost 2 to 1, the mortgage interest deduction benefits the middle class, not the so- called rich.

We may also look at the earned income tax credit, another large tax expenditure. This is another fully refundable tax credit, meaning taxpayers can receive it whether they pay income taxes or not. High- income earners receive no benefits from the earned income tax credit.

The story is the same with the child tax credit, which is limited to lower and middle-income earners. None of it goes to taxpayers with higher incomes. Likewise, all education credits go to taxpayers making less than $200,000 a year.

The list goes on and on. Deductions for real property taxes, medical expenses, childcare, and student loan interest, all of them predominantly, if not exclusively, benefit people making less than $200,000 a year.

Benefits from some other large tax expenditures are distributed almost proportionately between higher and middle-income earners. One such provision is the State and local income and sales tax deduction.

According to the Joint Committee on Taxation data, 55 percent of the benefit of this deduction goes to taxpayers making more than $200,000 a year, and 45 percent of the benefit goes to people making less than $200,000 a year. This expenditure accounts for about one-half of the revenue loss attributable to itemized deductions. Since the benefits are slightly more in favor of those with higher incomes, it would likely be a target for a ``tax reform'' exercise designed to raise revenue. However, much of the burden of limiting or eliminating this deduction would still fall on the middle class.

It is also interesting to note that this past December the New York Times editorial page, which is usually very much in sync with the philosophy of the Democratic Party, recommended caution when considering limits to this particular deduction. Yet it is one of the largest tax expenditures in the country.

I ask unanimous consent to have printed in the Record the New York Times editorial from December 6, 2012, entitled ``Keep the State Tax Deduction.''

[From the New York Times, Dec. 6, 2012]

Keep the State Tax Deduction

As they continue to wrangle over the year-end fiscal

deadline, both Democrats and Republicans are considering caps

on federal income-tax deductions.

That could be very bad news for residents of New York, New

Jersey and other states and cities that rely heavily on their

own income taxes. Such a cap would reduce the value of the

deduction for state and local income taxes, which has been

part of the federal tax code for a century (though the

deduction has been diluted by the alternative minimum tax).

That could substantially reduce middle-class disposable

incomes in high-tax states, which, in turn, would put

pressure on those states to cut taxes and the services they

have long chosen to provide. (A cap would also affect

property and sales taxes, though those are spread around more

evenly among all the states.)

The theory behind the deduction was that the amount paid to

states in taxes is not really part of an individual's

disposable income, because it is obligatory and, therefore,

should not be taxed twice. Over time, the deduction has

become the equivalent of a subsidy from the federal

government to states that believe in a strong and active

government. That may infuriate conservatives in low-tax

states like Texas, who hate subsidizing states with different

views of government's role, but it's actually a good thing

for the country.

The deduction is Washington's way of supporting states that

support their most vulnerable citizens and neediest cities.

The seven states that account for 90 percent of state and

local tax deductions (including sales and property taxes)--

New York, New Jersey, California, Pennsylvania, Maryland,

Illinois and Massachusetts--generally do a better job of

providing for the health and welfare of their citizens, and

are more willing to pay for institutions that are good for

society as a whole.

Rapid-transit systems in states like New York and

Massachusetts, subsidized with tax dollars, save energy and

improve the environment. Few cities can afford to operate

their own universities, but the City University of New York,

also subsidized with tax dollars, is an enormously valuable

institution with national benefits. Public hospital systems

and generous Medicaid programs have improved and extended the

lives of tens of millions of low-income people.

Texas is proud not to have an income tax, but it also has

by far the highest percentage of uninsured people in the

country. It ranks last in prenatal care as well and in

overall federal assessment of health quality.

In their fiscal-cliff offer, Republicans have proposed

raising $800 billion by capping deductions for the wealthy,

though their proposal would inevitably affect the middle

class in expensive states like New York and California.

President Obama would prefer to raise tax rates, but he has

also proposed deduction limits that would affect states that

have chosen to impose higher income taxes. Governors, mayors

and representatives of those states need to make their voices

heard in support of that choice.

Once again, when my friends on the other side of the aisle talk about eliminating so-called loopholes for the sole purpose of raising revenue, they are either talking about raising taxes on the middle class or they are proposing changes which will have no meaningful impact on the deficit at all. If the goal is to construct political talking points and raise relatively significant

amounts of revenue by going after politically convenient targets--jet owners, oil companies, private equity firms, and the like--you may do this by eliminating a handful of so-called loopholes.

This isn't the stated goal of the President, nor is it what my colleagues on the Budget Committee talk about when they say they want to pursue ``tax reform'' through reconciliation. No, instead they talk about reducing deficits, debt, and attaining fiscal sustainability. They cannot do this by focusing efforts on tax provisions which only benefit the wealthy. The money simply isn't there. If we are not going to cut spending, and if our deficit reduction efforts are focused only on eliminating so-called tax loopholes, then the middle class happens to be the target.

We need a different approach. We need tax reform which focuses on eliminating preferences in the Tax Code--not for the purpose of raising taxes but for lowering the rates and encouraging economic growth. Unlike the idea of tax reform advanced by some of my friends on the other side, this will benefit the middle class.

This is what tax reform is all about. Anyone talking about raising taxes or closing loopholes for the sole purpose of generating revenue is not talking about tax reform. For these reasons, I hope the Budget Committee will go a different route. I hope they will let the bipartisan tax reform efforts underway in both the House and Senate run their course.

If they don't, if they hijack the process in order to once again raise taxes on the American people and to vilify Republicans as being the ``party of the rich,'' we will not see tax reform happen this year or, quite likely, any year in the near future.

Our Nation is facing a number of challenges. In addition to mounting debts and deficits, our economic recovery remains on a slow and tenuous path. We need people who are willing to make difficult choices in order to solve these problems. This will mean structural reforms to our entitlement programs, which are the main drivers of our debts. Once again, that will mean real, meaningful changes to our Tax Code, which continues to be an obstacle to sustainable economic growth.

As I stated, I do believe there are people on both sides of the aisle who recognize these needs, particularly when it comes to tax reform. Sadly, there are also those who would rather campaign on these problems, attacking anyone who proposes real solutions while offering only political talking points in return. That is not what the American people deserve.

Mr. President, I suggest the absence of a quorum.

Mr. President, I rise today to congratulate and express my great pride and admiration for the young men of the Lone Peak High School basketball team.

On Saturday, March 2, 2013, Lone Peak won the Utah State High School basketball championship for the fifth time in 7 years. Now that alone is a great accomplishment. However, in addition to winning another State championship, the Lone Peak Knights are ranked as the best high school team in the country by the Web site Max Preps.

This team has flown somewhat under the radar to achieve their top ranking. Indeed, not many people expected a team from Utah to dominate like they have.

But the Knights have not shied away from competition. No, they have traveled around the country for the past couple of years playing some of the best high school basketball teams in the Nation.

For example, this season they traveled to Chicago to play in the Chicago Elite Classic and defeated powerhouse Proviso East by a score of 84 to 46. Proviso East is currently 25 to 3 and undefeated in their Chicago conference.

Lone Peak then played in the City of Palms Tournament in Ft. Meyers, FL, winning their first three games before suffering their only defeat of the season at the hands of Montverde Academy, which is another nationally ranked high school team.

It needs to be said that there is a difference between Lone Peak and teams like Montverde. Lone Peak draws its students and players from within its school boundaries in Highland and Alpine, UT. Montverde is a college prep school that recruits players from all over the country to come and play basketball.

Lone Peak again travelled out of the State of Utah this season and defeated Wesleyan Christian Academy--another private school that recruits basketball players--in the feature game at the Under Armor Brandon Jennings Invitational in Brookfield, MA.

The Knights' final foray outside the State of Utah was in mid-January when they defeated Archbishop Mitty from San Jose, CA, at the Spaulding Hoopball Classic in Springfield, MA. That game was televised by ESPN and Lone Peak won by a decisive score of 81 to 46.

This top-ranked team has been led by the trio of Nick Emery, Eric Mika, and T.J. Haws. But they are more than just three players. They are a full team that has worked together for many years under head coach Quincy Lewis. Now in his 10th year as the head coach at Lone Peak, Coach Lewis has a proven track record of leading his players, not only to victories on the basketball court but also to becoming fine young men in the community.

Last week, before the Knights won the State championship, he was named the Naismith national coach of the year. I want to congratulate him on this honor.

Another thing that is different about this team is that many of these young men will give up 2 years of their lives and serve missions for the Church of Jesus Christ of Latter-Day Saints. Nick Emery has already received his mission call and will leave for Germany shortly after high school graduation. Talon Shumway has been recruited to play college football as a receiver but will serve a mission first.

It takes a lot of faith and dedication to put such a promising career on hold for 2 years. Having served such a mission myself I know that there is no time for basketball or football when you are in the mission field.

The Lone Peak Knights have finished the season as the top high school basketball team in the United States, something that has never been done by a school from the State of Utah. It might not be done again. But I have to say that there are young people all over my home State that have been inspired by this team and will want to follow in their footsteps.

Once again, Mr. President, I want to congratulate the Lone Peak Knights on a wonderful season. It has been quite something to follow this story all season long, and I know that my admiration is shared by many throughout my State and, indeed, throughout the country.

As I mentioned, the three leaders on this team get most of the headlines, but their success has really been a team effort and they all deserve recognition. In addition to Emery, Haws, and Mica, the Lone Peak roster includes the following players: McKay Webster, Connor Toolson, Zach Frampton, Brooks Goeckeritz, Chandler Goeckeritz, Talon Shumway, Braden Miles, Dylan Hedin, Braxton Bruni, Jantzen Allphin, Marcus Acton, and Spencer Curtis.

Mr. President, the New York Times published an article by Dan Frosch last week that highlighted the achievements of these young men. I ask unanimous consent that it be printed in the Record.

I ask that the colloquy between the distinguished Senator from Tennessee and myself be as in morning business.

Madam President, I rise today, along with my colleague from Tennessee, to discuss two pieces of legislation we introduced to restore liberty and to protect jobs. The first bill, S. 40, the American Liberty Restoration Act, would repeal ObamaCare's unconstitutional individual mandate. The second bill, S. 399, the American Job Protection Act, would repeal Obama's job-killing employer mandate. These two provisions were included in the President's health law for the purpose of raising revenues--an attempt to pay for all of the new spending under ObamaCare--and to garner support from the private insurance industry.

I would ask Senator Alexander, has the so-called Affordable Care Act lived up to the promises President Obama made during the health care reform debate to maintain personal freedom, reduce health care costs, and decrease unemployment?

Madam President, I agree with my colleague and thank him for his comments.

I would also argue the individual mandate is unconstitutional. When the law was being debated here in Congress, and later when it was being litigated in the courts, proponents repeatedly argued the individual mandate was constitutional under the commerce clause. Well, that simply isn't the case. While the Supreme Court ultimately upheld the law on other grounds, the majority of Justices agreed the individual mandate was not a proper exercise of Congress's power to regulate interstate commerce.

I have to say I agree with that conclusion. Indeed, I say it is simply common sense the power to regulate interstate commerce does not include the power to compel individuals to engage in commerce, which is precisely what the individual mandate does.

Despite the Court's overall decision, the American people see the individual mandate for what it is--an affront to individual liberty. Indeed, the vast majority of the American people know it violates our constitutional principles and that it cedes too much power to the Federal Government. That is why, in poll after poll, the majority of Americans support repealing the mandate.

I would also ask the distinguished Senator from Tennessee, Mr. Alexander, to share his views about the individual mandate, if he has any additional views.

I would say to the distinguished Senator from Tennessee that is certainly the case. There are various reports and analyses of this that indicate a significant number of employers would rather pay the penalty and not have to deal with the particular requirements the Affordable Care Act seems to require.

On top of the unconstitutional individual mandate, this job-killing employer mandate is a real problem. Under the President's health law, employers with more than 50 full-time employees are required to offer coverage, as the distinguished Senator said, that meets a minimum value or pay a penalty of $2,000 per employee. The distinguished Senator from Tennessee explained this well. If the employer does offer coverage but that coverage does not meet the minimum value, employers must pay $3,000 per employee. I have never heard such a ridiculous approach toward business. Not surprisingly, the penalty under this provision costs less than offering coverage. According to the Kaiser Family Foundation annual survey of employer-sponsored health insurance, average annual premiums are $5,615 for single coverage and $15,745 for family coverage. Once again, the penalty for an employer who doesn't offer health insurance is only $2,000 per employee. That being the case, the law does not incentivize employers to offer the employees health insurance. Instead, it does exactly the opposite. Rather than footing the full cost of providing health coverage, many employers are going to take the less expensive route and simply pay the penalty, as the distinguished Senator from Tennessee has mentioned. Even worse, many employers that currently do offer their employees health benefits under current law will likely drop the benefits and, instead, choose to pay the penalty.

Studies are already showing this is the case, and this will be the case. An employer survey done by McKinsey and Company found that ``30 percent of respondents who said their companies offered employer- sponsored health insurance said they would definitely or probably drop coverage in the years following 2014.''

So despite the President's claim to the contrary, ObamaCare has not preserved the employer-sponsored health insurance market. It dismantles it. As a result, the President's promise that those who like their health insurance would be able to keep it falls by the wayside.

I believe Senator Alexander is also concerned about the fact the President's law defines small employers as those with less than 50 employees. In addition, I thought this law was supposed to create jobs. The President claimed it would. So again, I would turn to my colleague from Tennessee and ask: Does he think that has been the case? Does he think the President has been right about that?

I have heard the same complaints by the restaurant industry, and by a lot of small businesses that are looking to not hire more than 50 people, and also are looking to cut their employees' work hours down to below 30 hours a week in order to avoid these massive costs that would incur to them.

The employer mandate is a drag on our economy, forcing too many of our Nation's job creators to stop hiring and growing their businesses in order to comply with the onerous provision in the President's health law. Instead of letting the Federal Government dictate how employers should allocate resources, we should repeal this job-killing mandate and let businesses freely manage their personnel needs.

I couldn't agree more with the distinguished Senator from Tennessee, and I ask unanimous consent to have printed at this point in the Record an article under Politico's banner, titled: ``Under ACA, Employer Mandate Could Mean Fewer Jobs.''

Again, I thank my colleague from Tennessee for working with me on these two critical issues that impact every American. I will conclude with a quote from a Utah employer. This is a small business owner who is concerned about what the company will do come January 1 if these mandates remain in place. This employer wrote to me saying this about ObamaCare:

We will have to choose who will work 30 or less hours a

week, which in turn is bad for our business because we have

to train more people to do one job. It is bad for our

customers because they will have to interact with different

employees who may not know the customer's needs as well, and

it is most devastating for the employee because the

employee's hours will be cut.

If we want to turn this economy around, government decrees such as the employer mandate must be repealed.

Our job creators cannot grow and innovate with these heavy-handed regulations coming from Washington bureaucrats who have no clue how to run a business.

We must work together on this important issue for the sake of the individuals working three jobs at a time to make ends meet, for employers trying to keep workers on the payroll and contributing to the economy, and for our Nation as a whole to put our economy on the right track and to keep us globally competitive. At least that is my viewpoint, and it is certainly the viewpoint of my small business colleagues there in Utah.

Once again I thank my colleague from Tennessee, and I am hoping that others will hear our call for support and join us in these two crucial efforts to protect individual freedom and to maintain our system of free enterprise which has built this country and made it the best in the world.

So I thank the Senator from Tennessee.

Correcting the Record

Madam President, I ask unanimous consent that we return to the Halligan nomination.

I also ask further unanimous consent that I be permitted to speak following the distinguished Senator from Maryland.

Madam President, we have before us one of the most activist judicial nominees we have seen in years.

Rather than choose a more consensus nominee, President Obama has chosen to again provoke a political confrontation.

This is unnecessary, divisive, and not in the best interests of either the judicial selection process or the judiciary.

The Constitution gives the power to appoint judges to the President, not to the Senate. I believe, therefore, that the Senate owes the President some deference with respect to nominees who are qualified by both legal experience and, more importantly, judicial philosophy.

A nominee whose record shows that she has an activist judicial philosophy is simply not qualified to sit on the Federal bench, and the Senate owes the President no deference under those circumstances.

That is the kind of nominee we have before us today.

Nothing has changed since a cloture motion failed on this nominee in December 2011.

Well, that might not be quite true.

One thing that has changed is that the need to fill another vacancy on the

D.C. Circuit is even less today than it was then.

Year after year, case filings decrease for the D.C. Circuit while they increase for the rest of the judiciary.

Year after year, the D.C. Circuit ranks last among the 12 geographical circuits in the number of appeals filed per three-judge panel.

The court has even cancelled argument days because of an insufficient docket.

And I would remind my friends on the other side of the aisle that the D.C. Circuit's caseload today is lower than when they used this argument to block President Bush's nominees to this court--which they did.

Looking at the nominee herself, Caitlin Halligan was a member of the New York City Bar's Committee on Federal Courts and signed its March 2004 report titled ``The Indefinite Detention of `Enemy Combatants': Balancing Due Process and National Security in the Context of the War on Terror.''

Based on policy rather than legal grounds, it makes left-wing arguments that courts and even the Obama administration itself have repudiated.

Although she tried to distance herself from the report's left-wing positions at her confirmation hearing, Halligan signed rather than abstained from the report, as four other committee members had done, and never repudiated it before her hearing.

If she were a Republican nominee, my friends on the Democratic side would call this a confirmation conversion.

Her report argued that the Authorization for the Use of Military Force, or AUMF, does not authorize indefinite detention of enemy combatants.

The Supreme Court rejected this in Hamdi v. Rumsfeld. The Obama administration has sought, and the D.C. Circuit has adopted, a broad construction of the AUMF.

Halligan's report argued that alien terrorists should be tried in Article III courts, with full constitutional protections, rather than in military commissions.

On March 7, 2011, President Obama signed an executive order re- establishing military commissions for enemy combatants held at Guantanamo Bay.

But Halligan's extreme record on these important issues goes beyond that report.

She also authored a legal brief in 2009 arguing that the AUMF does not authorize the seizure and long-term military detention of lawful permanent resident aliens.

This position again disregarded the Supreme Court's holding in Hamdi v. Rumsfeld and appears even to conflict with the Obama administration's justification of assassinating American citizen Anwar al-Awlaki.

She just won't take no for an answer when pushing such extreme views, not even from the D.C. Circuit or the Supreme Court itself.

That is the classic definition of judicial activism, trying to use the courts to advance a political agenda no matter what the law is.

As Solicitor General of New York, Halligan aggressively sought to hold gun manufacturers liable for criminal acts committed with handguns.

In one speech, she said that the Federal Protection of Lawful Commerce in Arms Act ``would nullify lawsuits. . . including one brought by my office. . . that might reduce gun crime or promote greater responsibility among gun dealers.''

The Senate voted overwhelmingly for this legislation in July 2005.

Once again, Halligan turned to the courts to push her personal political views, filing a legal brief challenging the law's constitutionality.

In New York v. Sturm & Ruger, she argued that gun manufacturers maintain a ``public nuisance'' of illegally possessed handguns.

The New York Court of Appeals rejected Halligan's activist approach, concluding that ``the Legislative and Executive branches are better suited to address the societal problems concerning the already heavily regulated commercial activity at issue.''

Attempting to address social problems in the judicial rather than the legislative branch is a hallmark of judicial activism.

Finally, other legal briefs she has filed similarly demonstrate extreme views that the Supreme Court has rejected.

In Scheidler v. NOW, Halligan argued that pro-life protesters should be prosecuted under the Federal racketeering statute because they somehow engage in extortion.

The Supreme Court voted 8-1 to reject that position.

And in Hoffman Plastics Compounds, Inc. v. NLRB, the Supreme Court rejected Halligan's position that the NLRB can grant backpay to illegal aliens.

As I said, the Senate owes the President some deference with regard to his nominees who are qualified by their legal experience and, more importantly, their judicial philosophy.

Republicans have consistently cooperated with the President and will continue to do so. But when a nominee's record clearly shows that she has a politicized view of the courts, I for one have to say no.

The political ends do not justify the judicial means.

I urge my colleagues to oppose this nominee.

I yield the floor.

Mr. President, today, as we debate proposals for avoiding the so-called sequester, we find ourselves in a uniquely awkward position. Not only is there general disagreement about what brought us here, who is responsible, who is to blame, et cetera, but we also disagree about where ``here'' is to begin with.

President Obama has been touring the country giving speeches describing just how bad the sequester will be and why Republicans are to blame for it. This is, of course, par for the course for this President, whose motto seems to be: Why solve a problem when you can campaign on it? You would think, after having won the election, the President would be the first to acknowledge the election is over. But nearly 4 months after election day, the President's campaign road show continues.

The problem with the President's sequestration campaign is that, once again, his claims are at odds with the facts. Everyone in Washington knows that, despite the President's efforts to put the blame on Republicans, the sequester was his idea to begin with. The record is clear and it is not in dispute. The idea for the sequester was pitched by the President's then-OMB Director Jack Lew as a negotiating tactic to get Republicans to vote in favor of raising the debt ceiling. Not only did the idea originate in the White House, the President threatened to veto House-passed legislation designed to replace the sequester.

Moreover, in these final weeks leading up to the March 1 deadline, the President spent more time on his national sequestration campaign than he has in sitting down with Republicans to reach an agreement on a replacement package. So if the sequester goes into effect--and at this point it appears it will--the American people should not blame Republicans in Congress, who have been working in earnest to replace it. No, the blame should fall squarely on President Obama, who proposed the idea in the first place and has refused to work on a passable solution.

So that is how we got here. The bigger, more complicated problem is determining where ``here'' actually is. The President and his allies have spent a lot of time misleading the American people on that as well.

If you describe the sequester using the worst possible numbers, it is an $85 billion reduction from $3.5 trillion of yearly Federal outlays-- yes, that is $85 billion out of $3.500 trillion. When all is said and done, it is a reduction of less than 2.5 percent from overall Federal spending. And, as the Congressional Budget Office has made clear, not all of the $85 billion in reduction will even take the form of reduced spending this year. Even if it did, keep in mind that $85 billion would represent less than 9 days of Federal spending, based on the rate of spending last year. Once again, that is if you describe it in the worst possible terms.

For a moment, let's go with those numbers.

The President would have the American people believe that a 2.4- percent reduction in Federal spending out of $3.6 trillion will cripple our government and irreparably damage our economy, even an economy that the President must have felt was strong enough to absorb a $600 billion tax hike back on New Year's Day. The ramifications of the 2.4-percent spending reduction are so great, according to the President and his allies here in Congress, that the only alternative is to raise taxes yet again.

I will be the first to admit there are better, more responsible ways to reduce the deficit than the President's indiscriminate sequester. But these scare tactics don't even pass the laugh test. Does the President really expect the American people to believe our government is so fragile it cannot absorb a 2.4-percent spending cut--less than 9 days' worth of Federal spending--without inflicting massive damage on the American people and our economy? Apparently so.

Once again, I am describing the sequester in the worst possible terms just to demonstrate the outlandish nature of the President's arguments. However, when you look at whether the sequester even represents a reduction in spending, you find the claims are even more absurd. In fact, when you look at whether we are cutting spending at all relative to past periods, you can easily see we are not, even with the sequester.

The so-called spending cuts in the sequester are measured against 2010 spending levels. We should all remember that in fiscal year 2010, spending levels were highly elevated as a result of the President's stimulus and other ``temporary'' spending measures passed in response to the financial crisis and recession. So, in other words, the sequester reduces spending only if you are measuring against an extremely high baseline that was, at that time, supposed to be temporary.

Whether something is an increase or decrease depends on what you are measuring against. If you measure relative to a big number--such as the Democrat-fueled spending of 2010--then proposed spending looks like a cut. But if you look at spending levels relative to more reasonable spending baselines, you will find that future spending will actually be up even with the sequester in place. For example, you will see what post-sequestration spending looks like relative to a more reasonable baseline.

According to the Congressional Budget Office, baseline estimates for post-sequester discretionary budget authority total $978 billion for fiscal year 2013. The average during the Bush years, in inflation- adjusted fiscal year 2013 dollars, was $957 billion. Neither of these figures includes spending on wars or emergencies, so this is an apples- to-apples comparison.

In adjusted current dollar terms, post-sequester spending this year will be more than $20 billion higher than the average during the Bush years. Someone may have to refresh my memory, but I don't believe the government ceased to function during the Bush years. I certainly don't remember hearing anyone express concern about the elimination of basic governmental services. In fact, I don't think anyone remembers the Bush years as being a time of spending restraint here in Washington. Indeed, we have all heard President Obama claim it was the extravagant spending of the Bush administration that, in part, caused our current budget woes. Yet now the President is telling the American people that a return to those spending levels will devastate our country, leaving children hungry and our border unprotected.

Not surprisingly, the President and the Democratic leadership's solution to this problem is more tax hikes, which makes these claims about the impact of sequestration all the more transparent. Indeed, it appears that the President's current campaign on the sequester is less about reaching an agreement to replace the sequester than it is about satisfying his drive to once again raise Americans' taxes while also serving his desire to vilify Republicans, no matter what the costs to the American people.

I don't want to minimize the negative impact the sequester may have in some areas. I think there are very few of us who would not like to see the President's indiscriminate sequester replaced with more responsible spending reduction alternatives. There are alternatives to the approach we are debating today. But whatever we do, we should do it through regular order.

Today we are yet again debating a bill that has bypassed the relevant committees of jurisdiction. Regular order has become the exception rather than the rule around here, which is extremely frustrating I think to both sides. There are consequences to skipping the established committee process. If legislation does not go through the relevant committee, it is not studied and vetted. It simply shows up out of the majority leader's office before anyone has a chance to even look it over. Bypassing regular order is simply shortsighted. Yes, short- circuiting the committee process prevents Members from having to take tough votes in committee. But taking tough votes to enact legislation is part of being in the Senate--or at least it used to be. These days, no one in the majority has to take a difficult vote. The majority leader has made sure of that.

I have a chart that has the title ``Honest Leadership and Open Government.'' You can see the large letters at the top and the small letters right against the podium Senator Reid is at. My friends on the other side of the aisle won the Senate majority in the 2006 elections by campaigning on this theme. Unfortunately, in the 6 years since they have been running things here in the Senate, things have gone exactly the other way. Backroom deals are the rule, regular order is the exception, open government is the casualty, and committees are ignored with aplomb.

I have and will continue to urge my colleagues to support the restoration of regular order here in the Senate because, in the end, it yields better legislative results, and it is a much more fair way to legislate and involves everybody, not just a few people in one office.

Despite the fact that the President and congressional Democrats just got over $600 billion in tax increases out of the fiscal cliff deal, the Democratic leadership's bill that we are debating today contains even more tax increases.

The Congressional Budget Office wrote earlier this month that over the next 10 years, revenues as a percent of GDP will average 18.9 percent. Over the last 40 years, according to CBO, revenues have averaged 17.9 percent of GDP. So over the next 10 years, Federal revenues are set to exceed the historical average.

At the same time, government spending, which is projected by CBO to reach about 23 percent of GDP in 2023--an historical average--will be on an upward trajectory and will remain far in excess of the 40-year average of 21 percent. So the problem is not that the American people are undertaxed, it is that Washington is overspending.

Given this basic point, I have filed a motion to commit the Democratic leadership's bill to the Finance Committee to strike all the revenue increases and replace them with spending cuts. And to help further the process, I have prepared a menu of spending cut options to select from. These proposals come from Dr. Tom Coburn's book, ``Back in Black: A Deficit Reduction Plan.''

During the 2008 campaign, the President promised to find spending cuts by going through the budget, line by line. Dr. Coburn has done what the President promised but failed to do. Today, I am drawing from a small body of Dr. Coburn's hard work.

For instance, instead of the latest incarnation of the Buffett tax, we could, according to ``Back in Black,'' save $71 billion over 10 years by instituting a 5-year freeze on locality pay adjustments for Federal workers or we could reduce travel budgets of Federal agencies. That would save just over $43 billion over 10 years.

Another revenue increase in the majority leader's bill that could be replaced with a spending cut is the elimination of what some Democrats have described as a tax break for shipping jobs overseas. Indeed, we have seen this proposal pop up several times over the last few years.

However, as some may recall, the Chief of Staff of the Joint Committee on Taxation wrote a letter to Senator Stabenow and Representative Pascrell, the authors of a bill to close this so-called loophole, that stated,

Under present law, there are no specific tax credits or

disallowances of deductions solely for locating jobs in the

United States or overseas.

I previously challenged my colleagues to come and point out to me if they thought that was incorrect. To date, no one has tried to meet that challenge. Yet efforts continue to raise a tax under the guise of closing a loophole where no loophole exists.

One spending cut from Dr. Coburn's book that could be used as a substitute for closing the Democrats' phantom loophole is to reduce the Federal limousine fleet back to the level it was in 2008. According to Dr. Coburn's book, the government owned 238 limousines in 2008. By 2010, that number had grown to 412. What changed in government between 2008 and 2010 that required an increase of over 73 percent in the number of limousines needed to shuttle bureaucrats? If anyone knows, please let the American people know. Going back to the 2008 level of Federal limousines

would save the government $115.5 million over 10 years.

There are numerous other places where we can cut spending immediately. Instead of pursuing the Democrats' tax hike strategy or the President's indiscriminate sequester, we should instead sensibly restrain spending through proposals such as these.

I anticipate that some of my friends on the other side will argue we should pursue these spending cuts in addition to passing more tax hikes. My response is that we should be saving all of these revenue raisers for future tax reform efforts.

There is a growing bipartisan consensus here in Congress in favor of comprehensive tax reform. The leaders in both the tax-writing committees are committed to this effort, and I believe we have a real opportunity to accomplish something on tax reform this year. However, if we start closing loopholes and eliminating preferences now in order to raise revenue to avoid the sequester, they won't be there to help us lower marginal tax rates later on when we are working on tax reform, which will make an already difficult process that much harder.

Ultimately, if we follow the path my Democratic colleagues want us to take, we will be raising taxes on the American people while at the same time hampering future tax reform efforts. This is simply not the way to go, particularly when there are perfectly reasonable spending cuts available to replace the President's sequester.

As I said, whatever we do, we ought to do it through regular order. That is why I have filed this motion to commit and why I hope my colleagues will support it.

While I am waiting for someone to represent the majority, because I am going to have a unanimous consent request that I understand will be objected to and I want to protect the majority's right to do that, as much as I don't agree with it. I know there is an agreement in place for consideration of the sequestration bill and I don't want to stand in the way. But at some point we need to have a real bipartisan conversation about a return to regular order. For too long we have been avoiding the committee process here in the Senate and I think the results speak for themselves.

I want to work with my colleagues on both sides of the aisle to find a way to restore the deliberative traditions of the Senate by allowing the committees to do its work. If we can return to regular order, the words ``honest leadership and open government'' will be more than a campaign slogan. The American people should expect nothing else.

I understand my unanimous consent will be objected to, and so I ask unanimous consent that I be immediately recognized to make this unanimous consent as soon as the distinguished chairman of the Finance Committee arrives.

Madam President, I suggest the absence of a quorum.

I thank my colleague for his courtesy. I appreciate it.

Madam President, I ask unanimous consent that following the two cloture votes today, it be in order for me to make a motion to commit S. 388 to the Finance Committee, the text of which is at the desk, and the Senate proceed immediately to vote on the motion without intervening action or debate.

It is the motion to recommit.

Look, this place is not being run on regular order. The committees are being ignored. The committees are established to be able to intentionally look at these matters

and hear both sides and hear the top experts in the country. I feel very badly that this simple motion has to be objected to. I feel badly because I know neither of the amendments that will be filed, that will be heard or voted on, are going to pass. One reason they will not is because we have not followed the regular order.

I am happy to yield.