Floor Statements

Mr. President, I wish to echo the comments of the distinguished Senator from Texas. I have served with Jon Kyl for his whole time in the U.S. Senate, and he is a lawyer's lawyer. I do not say that lightly. I do not consider many lawyers a lawyer's lawyer. Jon is an excellent lawyer, one of the best I have met and certainly one of the best ever to sit in Congress.

He also does not go off the deep end. When he speaks, anybody with brains should listen. Plus, he is a tremendous example not just to some of us older guys around here but especially to the new Senators and others who have come into this body. He has been a pivotal member of the Judiciary Committee, including when I chaired it and when we did so many interesting

things. He was a pivotal member on leading to a balanced budget in the middle of the 1990s. Jon has argued for that, has argued for these types of fiscal restraints and responsibilities like no one I know.

Jon is one of the most honest and decent and credible people I have known in the whole time I have been in the U.S. Senate. He has been an excellent leader for our party. As assistant minority leader and assistant majority leader, he has been a great, great leader in our party. We have all trusted him because he is a person who is trustworthy. We have all listened to him because he is a person worth listening to. We have all shared the pains of this place with him as friends and brothers working together, we hope in the best interests of our country. And there is no question in anybody's mind on either side of this floor, when it comes to Jon Kyl, they know he is a true American patriot who has done everything he could while he has been here to keep this country strong.

I have to say I have always been impressed with Jon Kyl. I have watched him close up for all these years, but I do not know that I have ever been more impressed than when he led the fight with regard to nuclear weapons and with regard to START. He not only was well informed, he was the best informed, and this body should have listened to everything he said. I am sure most people did.

I do not think any of us would fail to try to serve this country to the best of our ability. All I can say, in closing, is that Jon has served this country to the best of his ability, and his abilities are extraordinary.

I personally count him as a friend. When I had this very interesting reelection this last time, with what seemed like the whole world coming down on me for some reason, one of the first people to offer help was Jon Kyl. He came to Utah, and it meant so much to me.

All I can say is, wherever Jon goes after this is over, they are going to be lucky people to have him around. And I wish him all the success in the world. He deserves it. I hope he and his wife and family--whom I like very much--will have a wonderful, glorious existence from this day onward.

We are going to miss you, Jon. We are going to miss your intellectual capacity. I am personally going to miss your legal capacity. And all of these other accolades that have been given your way, I will miss all of those too. But you have a friend here, and this friendship, in my opinion, is an eternal one, and anything I can ever do for you, I will certainly try because I know you would never ask for anything that was not accurate or right. So I wish you Godspeed, and know there are a lot of us who really, really hate to see you go.

I yield the floor.

Mr. President, to begin, I want to take a few minutes to express my deepest sorrow for the events of last Friday. As a parent, grandparent, and great-grandparent, I was horrified to hear the news of the tragedy in Newtown, CT. My sadness remains for those who have lost their children and loved ones and for the quiet community that saw its sense of peace and well-being shattered through such a terrible act of violence.

I, like almost everyone I know, am at a loss when it comes to making sense of such a horrible tragedy, and I won't try to do so today. All I can do is offer my prayers and sympathies for those who lost their children, friends, and family members, and to the people of Newtown.

In my faith, we believe families are eternal; that those who have lost loved ones will one day be reunited with them. That belief has helped me to cope with losses I have experienced over the years. And while I know nothing can relieve the pain of losing a child, I hope this notion will bring the parents of those sweet innocent children some measure of comfort.

Once again, I offer my heartfelt prayers and deepest sympathy to those in Newtown and throughout the country who have cause to mourn this day.

Mr. President, I want to take a moment to pay tribute to a person I loved, appreciated, and worked with for all these years--all of my 36 years in the Senate--and to bid a fond farewell to our dearly departed friend, the senior Senator from Hawaii, Dan Inouye.

In addition to being a distinguished United States Senator, Senator Inouye was many things: a Pearl Harbor survivor, a Medal of Honor recipient, a father, a grandfather, and a loving husband to his wife Irene.

As a volunteer with the Red Cross, young Daniel Inouye tended to the wounded in the aftermath of the attack on Pearl Harbor.

During World War II, when the Federal Government was placing thousands of his fellow Japanese Americans in internment camps, Senator Inouye was one of many Asian Americans who petitioned the government for the right to serve their country in the military. His petition was successful, and he served heroically. In fact, the story of Senator Inouye's military service has become the stuff of legend here in the Senate and throughout the country.

In 2000, Senator Inouye, along with 21 of his fellow Japanese- American World War II veterans, was awarded the Medal of Honor, our Nation's highest honor for valor.

In 1959, when Hawaii achieved statehood, he was elected the State's first full member of the House of Representatives. Three years later, in 1962, he was elected to the U.S. Senate, where he would serve for five decades, the second longest tenure in this Chamber's history. I am honored to have served with Senator Inouye throughout my entire Senate service.

While he and I often found ourselves on different sides when it came to

issues, I always knew him to be a man of principle and decency, and I never doubted his commitment to the people of his State and to doing what he believed was right.

One of the few times we found ourselves on the same side came when our mutual friend, the late Senator Ted Stevens, asked us both for help when his character was called into question. Politically speaking, participating in Senator Stevens' trial held no benefit for Senator Inouye. It would have been easy for Senator Inouye to deny his friend's request, and few would have blamed him for it. But that wasn't how Senator Inouye operated. Rather than letting a friend fend for himself, Senator Inouye showed great loyalty and characteristic integrity in his willingness to testify to his friend's good character, and put his own reputation on the line in service of a friend. And I had a similar privilege.

Both Senator Inouye and I were mystified by what happened in that trial, and we were justified in our mystification when, finally, they had to admit it was a trial that should never have been brought. All I can say is I remember him testifying and I testified after he did, and I would mention that Colin Powell also testified as to Ted Stevens' character. All three of us felt this was a besmirchment of a truly honorable and decent man.

Once again, I am proud to have been Senator Inouye's colleague, but I am more proud and more pleased to have been his friend over all these years. He actually showed me a great deal of concern, showed me a great deal of friendship, and spent time with me when I needed particular help, and was there in many ways for not just me but for others as well, one of the kindest, most decent, and honorable people I have ever met. I express my deepest sympathies to his wife and family and their many, many friends.

Daniel Inouye left an indelible mark on the Nation he loved so much and he will surely be missed. Aloha, my friend.

Mr. President, I wanted to compliment Senator Leahy, who now is the President pro tempore of the Senate.

I have served with Pat Leahy all my 35 years. He is a strong, intelligent, hard-working Senator, and I am sure he will fill this position in every way it can possibly be filled.

I know he, like I, is sad that we lost Senator Inouye, but Senator Leahy will be a worthy successor and he will have my support. I hope everything goes well for him in this transition and in this new opportunity he has.

Mr. President, I yield the floor.

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

Madam President, in less than 1 month, American taxpayers face the greatest tax increase in our Nation's history. It did not have to come to this.

The President claimed he wanted a balanced approach to deficit reduction. He told the American people throughout his campaign we needed to balance tax increases with spending cuts in order to tame our deficits, stop taking on water and, of course, reduce our debt.

Many Republicans objected to this approach on empirical grounds. There is no denying the principal source of our debt crisis is on the spending side. But elections have consequences and many Republicans have now stated a willingness to meet the President halfway. They are willing to concede some revenue increases in exchange for entitlement reforms--revenue increases, not rate increases.

But the President now says never mind all those campaign promises about a balanced approach. He has taken nearly all meaningful entitlement reforms, including many he previously endorsed, off the table. He has abandoned revenue increases and spending cuts for deficit reduction and replaced that balanced approach with a plan to raise taxes and increase spending.

This is not what he told the American people he stood for, but I would go so far as to say that if he did campaign on this, he would now be looking for new employment. This bait and switch is beyond cynical, particularly when he knows the Republicans have a strong and empirically grounded opposition to revenue increases.

So far, we have focused primarily on the economic impact of the increased marginal tax rates the President is demanding. But it would be wrong to discount the coming tax increase on individual capital gains, should we go over the cliff or if the President gets his way. The evidence seems clear. Any capital gains tax increase is counterproductive to real economic growth and job creation. Allowing these rates to go up puts ideology, partisanship, and class warfare ahead of sound economic and tax policy. For almost the entire history of our income tax system, we have had preferential tax treatment for capital gains.

From 1921 through 1987--and then again after 1990--long-term capital gains have been taxed at a lower rate than ordinary income. The short time, approximately 3 years, the preferential treatment for capital tax gains was not in effect was due to the Tax Reform Act of 1986. The 1986 act is considered by many to be the gold standard for tax reform, and elimination of the preferential tax treatment for capital gains is considered by many to be one of the major accomplishments of the 1986 act.

It is important to recall, however, that elimination of preferential tax treatment for capital gains in 1986 was coupled with a significant reduction in tax rates for individuals, and the lack of preferential treatment did not last long. Today, the top tax rate on capital gains is 15 percent. If Congress fails to act and we go over the fiscal cliff, the tax rate on capital gains will increase to 20 percent on January 1, 2013. In today's fragile economy, with unemployment still hovering around 8 percent, we should not be raising taxes on capital gains.

Two years ago, a study by the American Council for Capital Formation showed that increasing the capital gains tax would cause measurable damage to the economy. The study estimated that if the capital gains tax was increased to 20 percent from 15 percent, real economic growth would fall by 0.05 percentage points per year and jobs would decline by about 231,000 per year. If the rate is increased to 28 percent, real economic growth declines by 0.1 percentage points per year and 602,000 fewer jobs are created each year.

The fiscal cliff is only part of the story. In less than 1 month, a new 3.8-percent tax on net investment income of single taxpayers earning more than $200,000 and married couples earning more than $250,000 will go into effect as part of the so-called Affordable Care Act. As a result, the capital gains for upper income taxpayers is already scheduled to increase by almost 4 percent. We should not add another 5-percentage-point tax increase on top of that.

Upper income taxpayers will face a 23.8-percent tax on capital gains in 2013 if Congress fails to act to prevent a rise in the capital gains tax. Sometimes the magnitude of these numbers is lost on folks. They might think that is only a jump from 15 percent to about 24 percent, not that big a deal.

I would like to state just a few points. That represents a 59-percent increase from current law. During the fiscal cliff negotiations, some have posited that all that is at stake is a return to the tax rates of the Clinton era. That is not what is happening with the tax rate on capital gains. During the latter part of the Clinton era, a Republican majority in Congress was able to get an agreement on cutting the top rate on capital gains to 20 percent at that time. If the tax rate on capital gains remains at the 2012 rate of 15 percent--coupled with the new 3.8-percent tax on net investment income--capital gains will be taxed at 18.8 percent, very close to the Clinton-era rate.

A 5-percent increase in the tax on capital gains to 20 percent, coupled with the increases imposed by ObamaCare, will result in a rate of 23.8 percent, well above the tax rate on capital gains at the end of the 1990s. We should not go down this road. This is said specifically by the Senator who, along with Senator Lieberman, pushed very hard for these lower capital gains rates. There was a Hatch-Lieberman bill that was instrumental in bringing rates down to the current level.

There are a number of arguments on behalf of preferential tax treatment for capital gains. For example, there is the lock-in effect. Since capital gains are only taken into account when realized by a sale or exchange, investors can avoid paying the capital gains tax by simply holding on to their capital assets. As a result, the capital gains tax has a lock-in effect, which reduces the liquidity of assets and discourages taxpayers from switching from one investment to another. This impedes capital flows to the most highly valued uses and is, therefore, a source of economic inefficiency. The higher the rate, the greater the disincentive to make new investments.

The preferential tax treatment for capital gains also counters the two levels of taxation of corporate income. A large amount of capital gains arises from the sale of corporate stock. When a corporation earns income, it pays taxes on that income. When a shareholder sells stock, part of the gain on the stock might be due to the earnings of the corporation, resulting in a double tax of corporate earnings. A low capital gains tax leads to increases in savings and investment, corrects the income tax law's bias against savings, corrects the lack of indexing capital gains for inflation, and increases the incentives for risk-taking.

The tax rate on capital gains can also be viewed as a compromise between an income tax system and a consumption tax system. In a pure income tax system, capital gains would be taxed the same as any other type of income. In a consumption tax system, capital gains would not be taxed at all. Taxing capital gains at 15 percent can be seen as a reasonable compromise of income tax and consumption tax principles.

An increase in the capital gains tax rate will increase the difference between what an investment yields and what an individual investor actually receives. This is known as the tax wedge. The higher the tax wedge, the fewer the number of investments that will meet the minimum rate of return required by an investor, known as the hurdle rate. In short, higher rates equal fewer investments.

So far I have only spoken about the coming increases in capital gains taxes. I know people who are hurriedly selling their stock portfolios now to pay the lesser capital gains rate and after the 1st of the year will buy back the same stock, though it will have a higher basis at that point.

The impact of the fiscal cliff on the taxation of dividends is even more severe. Unless Congress acts, dividends will be taxed at a rate as high as 43.4 percent come January 1. This is because, starting in 2013, dividends will be taxed at 39.6 percent under current law, and then the ObamaCare surcharge of 3.8 percent will be tacked onto that.

Many seniors depend on dividend income. To increase their dividend income taxes to around 40 percent, especially at a time when any bonds they hold essentially yield nothing, hollows out the nest eggs of retirees. Unless we address the fiscal cliff, the taxation of dividends will go from 15 percent to 43.4 percent literally overnight. This is a tax increase of 189 percent--excuse me--yes, it is 189 percent. I thought for a minute it was 18.9 but, no, it is 189 percent.

It is hard to believe but nevertheless true that many Democrats, including the President's Treasury Secretary, have expressed a willingness to go over the fiscal cliff, when Americans are facing tax increases of this magnitude.

We are in the midst of a sluggish economic recovery. The President and his allies in Congress seem bent on raising taxes, regardless of the impact tax hikes will have on future economic growth or income security of seniors and pension holders. They would have us believe there is no relationship between tax rates and economic growth. If that were true, we wouldn't be seeing major companies scurrying to grant big dividends now, before the year ends and taxes potentially skyrocket-- among which is the Washington Post. I read the other day they are going to do their dividends now before the end of the year, before all this taxation occurs after the end of the year.

The coming capital gains tax hike is just one of many tax hikes facing the American people if Congress refuses to act before the end of the year. I think the numbers make a pretty compelling case that raising the capital gains tax rate, particularly when ObamaCare will already raise that rate by nearly 4 percent, will do serious damage to our economy.

I might add, I don't blame anybody for paying their dividends this year--in advance of next year. I don't blame them at all. I certainly don't blame the Washington Post for doing it. But if you think tax policy doesn't affect how things are done in this country, then you don't know what from what.

Let's just say I urge my colleagues to join me in supporting an extension of the current capital gains and dividends tax rate.

The other day I talked about the estate taxes, or what we call death taxes, and how stupid it is to do what the Democrats want to do with regard to death taxes--make them so high so there is a double taxation on families, and especially ranchers, which will go up 24 times the number of last year's ranches and farms that will be hammered by these higher death taxes.

There is a reason it is good to keep tax rates lower, and I hope none of my colleagues on either side, really, but certainly on the Republican side, will agree to raising tax rates because we know once they are raised, our friends on the other side are just going to spend that money. They will not use it to pay down this $16.4 trillion national debt we have. We are a few bucks short of $400 billion in that figure, but we are getting there. It will be $17 trillion before the end of this year, and then it will go up even faster after that with what the President plans to do to this country.

We have to wake up. We have to quit listening to the political talk, and we have to start looking at the economics. We have to start looking at what works in taxation and what doesn't. Frankly, we have a long history of what works, and we also have a long history of what doesn't. We are about to embark on all kinds of programs that don't. I don't want to see that happen. I hope we will fight against these things. I hope those who really do represent the people will start representing them instead of just asking for more and more money so they can spend more and more and get this country even more and more in debt.

Madam President, I suggest the absence of a quorum.

I thank my good colleague, and I enjoyed listening to his comments.

Mr. President, one thing people admire about firefighters is that when others are running away from a burning building, they run toward it. Conversely, while most people prudently avoid cliffs, President Obama and the congressional Democratic leadership are racing to go over the fiscal cliff ``Thelma and Louise'' style.

Absent action by Congress and leadership by the President, at the end of the year almost every Federal income tax payer in America will see an increase in their rates. Some will see a rate increase of 9 percent, while others will see a rate increase of 87 percent.

Although not often discussed--and although the President likes to avoid discussing it--the impact of these rate hikes will have a uniquely damaging impact on small businesses and the jobs they provide. Small businesses are the engine of job creation in our economy, and the rate hikes the President insists on will hit them hard, undermining economic growth and hampering innovation and job creation. Whether we go over the fiscal cliff or whether the President gets his way on raising rates, taxes will go up significantly on small businesses.

The President would like us to think that raising these taxes is no big deal; it will just hit people who already have a lot of money and who can ``afford to give a little more.'' As President Obama put it in using his own finances as an example, absent tax increases, ``I'm able to keep hundreds of thousands of dollars in additional income that I don't need . . . ''

With due respect, this is an amazingly naive understanding of tax rates and their impact on economic growth. It assumes that all the people hit by these higher tax rates are wealthy wage earners, CEOs, and financiers. It completely negates the impact on small business income that will be subject to these individual rate hikes.

Here we are at Christmastime and the Democrats want Santa to put coal in the socks of all the small businesspeople. Even President Obama acknowledges that two-thirds of the new jobs in our economy are created by small businesses. The vast majority of small businesses are organized as what we call flowthrough business entities, such as partnerships, S corporations, limited liability companies, and sole proprietorships. In other words, these small businesses pay the individual income tax rates.

Because the vast majority of small businesses are flowthrough business entities, the income from these businesses flows through the business directly onto the small business owners' individual tax returns. Therefore, any increase in individuals' tax rates means those small businesses get hit with a tax increase. This tax increase lands on those small business owners even if they do not take one penny out of their business's profits and they put it all back in to be able to hire more people or to get more inventory or whatever that helps their business along. Even if a small business reinvests all its income to hire more workers, pay the workers they already have, or purchase equipment, they will still get hit with this looming tax hike.

The President and those in his party who support these rate hikes owe it to the American people to explain why their proposal will not adversely impact small businesses and those who depend on them for their livelihoods because the data suggests the impact will be severe. There is no question about that. Why can't we get the real facts here?

First, according to the Congressional Budget Office, 80 percent of the revenue loss from extending the 2001 and 2003 tax relief provisions is found among those making less than $200,000 per year if single and $250,000 if married--the President's threshold.

Second, the nonpartisan official scorekeeper for Congress on tax issues, the Joint Committee on Taxation, tells us that 53 percent of all flowthrough business income would be subject to the President's proposed tax hikes. This is our Joint Committee on Taxation, which is a nonpartisan committee: 53 percent of all flowthrough business income is subject to tax hikes on the top two rates.

Given the agreed-upon importance of small businesses to our economic recovery, it is a mystery to me why the President and his Democratic allies would pursue tax increases on these job creators. We simply cannot afford to raise taxes on over half of all this small business income.

President Obama and congressional Democrats defend their plan by claiming that only 3 percent of small businesses would get hit with this tax increase, so we should not fear raising taxes on them. However, they are misreading the Joint Committee on Taxation's letter on this issue. That letter only talks about the percentage of taxpayers affected, not the percentage of businesses affected.

For instance, if 10 people own one business, President Obama and congressional Democrats count that one business as 10 businesses when they make their statement about a small percentage of businesses affected. Obviously, that is not the right way to look at this. The truth is, they don't know what percentage of businesses they are proposing to raise taxes on and, what is worse, they don't seem to care.

The IRS publishes its Statistics of Income Data on its Web site providing the most recent available tax data, which is currently tax year 2010. According to that official IRS data, when looking at the entire United States, 21 percent of owners of S corporations and partnerships, including limited liability companies, make $200,000 or more.

Since President Obama's proposed rate hikes occur on singles making $200,000 or more and married couples making $250,000 or more, the vast majority of this 21 percent would get hit with a tax increase. The only portion of this 21 percent of S corporation and partnership owners who would not be hit with a tax hike are those who are married and make between $200,000 and $250,000.

According to a 2011 Ernst & Young study entitled ``The Flow-Through Business Sector and Tax Reform,'' citing 2007 data from the U.S. Census Bureau, over 44 million workers employed by S corporations and partnerships, including limited liability companies--over 60 percent of the 69 million employees who work for flowthrough businesses--are going to get hurt. So almost 21 percent of S corporations and partnership owners will be subject to the tax hikes on the top two rates, and over 64 percent of the workers in flowthrough businesses are found in these types of businesses. This is before we even consider the impact on owners of sole proprietorships, which employ the remaining 36 percent of employees in the flowthrough sector.

When the Federal Government takes an additional 5 percent of the money that these small businesses earn, the effects are clear. Far from this being--as the President suggests--money business owners don't need, it will, in fact, lead to lost jobs, stagnant or reduced wages, and a decrease in investment.

The President campaigned on raising the top rates, and he seems bent on doing so. But he owes it to the American families to come clean about the impact these hikes will have on the economy and on jobs. He should come clean and admit his desire for redistribution trumps all other considerations.

The debate over the fiscal cliff has been quite discouraging for me. The President knows why it is that Republicans support full extension of current tax policy, and it is not because we are trying to defend the so-called rich. It is because we have a genuine and empirically grounded concern about the impact of marginal rate hikes on small businesses, the jobs they create, and the men, women, and families who depend on them. I couldn't care less about the truly rich.

Instead of acknowledging that marginal rate hikes would have an outsized impact on small businesses, the President has decided instead to demagog this issue, paint Republicans as out of touch, and put political points ahead of

jobs. It is well past time for a grownup conversation about tax policy. Our door remains open, and we look forward to having the President walk through it.

Mr. President, I would like to take a few minutes to discuss a matter of great importance in the trade arena.

Last week, the Senate approved legislation granting permanent normal trade relations to Russia and Moldova by a vote of 92 to 4. Such a strong vote would not have been possible without bipartisan cooperation from my Senate colleagues. I would once again like to express my appreciation to all the Republican members of the Finance Committee who worked with me and my staff in good faith to develop a strong enforcement package which addresses many of the concerns we all have with our bilateral trade relations with Russia.

I also want to again express my appreciation for the hard work and cooperation of Senator Baucus, the chairman of the Finance Committee. The process we undertook in the Finance Committee is emblematic of how the Finance Committee should work. It is my sincere hope this will be a model for future legislation.

Unfortunately, things don't always work so smoothly. In fact, I was quite disturbed to receive a letter earlier this week from Ambassador Kirk, our trade ambassador, informing me that the Obama administration intends to support approval of the proposed terms for Tajikistan's accession and the invitation for Tajikistan to become a member of the WTO at the upcoming WTO General Council meeting.

Let me be clear. I support efforts to help advance the rule of law by bringing countries such as Tajikistan into the World Trade Organization. What disturbs me is that the administration had been negotiating the WTO accession package for over 1 year and failed to even mention it to anyone on the Senate Finance Committee.

Even more troubling is the fact that the final WTO working party meeting took place on October 26, 2012, at which Tajikistan's proposed protocol of accession was completed. Yet no one in the Senate received any information about the accession until last week. Why the Obama administration waited 5 additional weeks after completing Tajikistan's WTO accession negotiations before notifying the committee is a mystery for me.

For an administration that touts its commitment to transparency and unprecedented consultations with Congress, their failure to consult with the Finance Committee and the Senate on the terms of Tajikistan's proposed accession protocol reveals that the administration's bold pronouncements about their excellent consultations are nothing more than empty rhetoric.

Moreover, section 122 of the Uruguay Round Agreements Act requires the administration to consult with the Senate Committee on Finance before any vote is taken by the WTO relating to the accession of a new member. While sending a letter to the committee 1 mere week before a vote is taken in the WTO and after the terms of the accession are already completed might technically comply with the letter of the law, it in no way complies with the spirit of the law.

Had Congress been notified of Tajikistan's pending invitation to join the WTO earlier, it might have been possible to include provisions granting Tajikistan permanent normal trade relations along with the Russia and Moldova bills. But that was not possible. Instead, the Obama administration's lack of transparency and failure to meaningfully consult with Congress rendered that impossible.

As we continue to try to work with the Obama administration to develop policies and advance legislation which create economic growth and open new markets for U.S. workers and job creators, the administration must engage in meaningful consultations. Accordingly, I would expect the way the Tajikistan accession has been handled by the Obama administration will be an exception and not the norm regarding future consultations.

To help ensure that is the case, I will soon be sending a letter to the Office of the U.S. Trade Representative with some detailed questions regarding their consultations with Congress and the private sector trade advisory committees. It is vitally important that we bring more transparency to this process, so I sincerely hope we receive a detailed and substantive response soon.

I also hope we can soon begin to have a meaningful discussion with the administration about their plans for renewing trade promotion authority.

As most of my colleagues know, trade promotion authority is an important tool which helps us pry open foreign markets to U.S. exports. Every President since FDR has sought trade promotion authority from Congress. Despite its critical importance, the administration keeps putting off any meaningful discussion of renewal. In fact, when Ambassador Kirk testified before the Finance Committee last March, I offered to sit down with him that day to start talking about TPA renewal. He declined my offer. Instead, he simply said he would be happy to sit down and talk with me and members of the Finance Committee about TPA renewal ``at the appropriate time.''

Since that time, there has been no administration dialog with me or with the Finance Committee about TPA, even though the Obama administration intends to conclude the trans-Pacific partnership negotiations by October of next year and is considering launching negotiations for a free-trade agreement with the European Union as early as next month.

Frankly, both of these initiatives are going to require TPA in order to be successful. While TPA should have been renewed long ago, we currently cannot wait any longer. If these trade initiatives are going to succeed we cannot continue to keep putting them off.

The time for the administration to start meaningful consultation with Congress on TPA renewal is now and I would like to see more cooperation. In this Congress we have seen the Korean Free Trade Agreement, we have seen the Colombian Free Trade Agreement, and we have seen the Panamanian Free Trade Agreement. We have seen the PNTR with Russia. Those would not have happened if we had not been pushing on the Finance Committee to get them done.

In my opinion, the administration has been slow-walking all of those. Those mean balance of trade positives for our companies here in America and I hate to see us playing around in deleterious ways with these types of agreements. I have suggested some other agreements here that need to be entered into. We need to get real on international trade. We need to be able to compete with anybody in this world, and we are able to if we are given the chance.

I yield the floor.

Mr. President, some things never change in the Senate. For more than 200 years, our practice of extended debate has been the single most defining characteristic of the Senate. For more than 200 years, extended debate has annoyed the majority and empowered the minority.

What has changed, however, is that the majority today threatens not only to change Senate rules and practice in order to cripple this tradition and consolidate power but to use unprecedented tactics to do it. I urge my colleagues on both sides of the aisle to come together and preserve the fundamental integrity of this body, even if we may disagree about some of the political issues.

I wish to explain to my colleagues why neither the ends nor the means that the majority has been discussing are legitimate. First, there is no debate crisis on the Senate floor, none whatsoever.

In fact, it is easier to end debate today than during most of American history. For more than a century since we had no cloture rule at all, ending debate required unanimous consent. A single Senator could filibuster merely by objecting. From 1917 to 1975, ending debate required a supermajority of two-thirds, higher than the three-fifths required today. As I said a minute ago, extended debate has always annoyed the majority.

Today is no different. Yet we hear the majority claiming there have been hundreds of filibusters, that the rules are being abused, that obstruction is at

an alltime high. The American people likely do not know the particulars of our debate rules and practices but Senators making such claims certainly should.

The majority pumps up the filibuster numbers by claiming that every cloture motion is evidence of a filibuster. They know that is not true. As the Congressional Research Service says:

The Senate leadership has increasingly utilized cloture as

a routine tool to manage the flow of business, even in the

absence of any apparent filibuster. . . . In many instances,

cloture motions may be filed not to overcome filibusters in

progress, but to preempt ones that are only anticipated.

That is what is going on today. The majority leader often files a cloture motion as soon as a motion or a bill becomes pending. He does that to prevent debate from starting, not to end debate that is underway. In the last three Congresses under this majority, a much higher percentage of cloture motions got withdrawn without any cloture vote at all than under the last three Congresses under a Republican majority.

The majority leader appears to think that debate itself is simply dilatory. While extended debate has long been annoying to the majority, this majority leader apparently believes any debate is annoying.

Neither filing a cloture motion nor taking a cloture vote is evidence of a filibuster. A filibuster occurs when an attempt to end debate, such as a cloture vote, fails. That is why some on the other side of the aisle want to address what they claim is a filibuster problem by changing the cloture rule.

Let's use some common sense and stop misleading our fellow citizens about how this body operates. A filibuster is a debate that cannot be stopped. During this 112th Congress a much smaller percentage of cloture votes have failed than in the past. That is right. Cloture votes today are more successful in preventing filibusters than in the past.

The same is true about motions to proceed, which is the particular focus of those who are now threatening to weaken debate by forcing a rules change. In the 112th Congress, 32 percent of cloture votes on motions to proceed have failed, compared to an average of 54 percent during the previous dozen congresses. Put simply, the current Senate majority has used cloture to prevent filibusters on motions to proceed more effectively than in the past.

By the way, during the last several Congresses when the Democrats were in the minority, the current majority leader and majority whip voted to filibuster motions to proceed dozens of times. As I said, extended debate has always annoyed the majority and empowered the minority.

Once again, it is easier to end debate today than during most of American history. The majority has done so more effectively in the current Congress than in the past, both in general and on motions to proceed. There simply is no crisis, no unprecedented abuse that requires some sort of fundamental change in the rules and traditions of this body.

Rather than blowing up the Senate, I suggest that the majority actually try working with the minority. That is something we have not seen under the current majority leader's tenure. Since the Democrats took control of the Senate in 2007, the majority leader has not only routinely filed cloture motions to prevent debate, but he has severely limited the minority's ability to offer amendments. Since the majority leader is at the front of the line in this body, he uses that preference to offer amendments so the minority cannot. He did that here just a few minutes ago.

The current majority leader has used this tactic more than 60 times, more than any previous majority leader of either party. In fact, he has done so more than all previous majority leaders combined. It is one thing to require a majority to pass an amendment, but the effect or, rather, the intent of this tactic is to require Senators in the minority to obtain the majority leader's permission to even offer amendments in the first place.

Isn't that ironic? The majority leader uses the rules to his legislative advantage but wants to strip from the minority the ability to do the same. The Senate is not supposed to work that way and did not when Democrats were in the minority. Back in April 2005, when he was the minority whip, our distinguished current majority leader defended the minority's ability to offer even nongermane amendments because doing so prompted Senate consideration of subjects that the majority may have ignored.

That was then; this is now. Today it does not require three-fifths to block an amendment. The majority leader can and has done the same thing all by himself. This kind of silencing of minority views does not even happen in the House of Representatives, which operates by majority rule across the board. In the House, the majority party, either Republican or Democratic, often limits amendments, sometimes barring them entirely.

But at times the minority is entitled, before final passage, to a motion to recommit, which means a chance to propose a different version of the bill. This motion is not merely symbolic. Not infrequently that motion carries. In contrast, when the Senate majority leader fills the amendment tree, as he just did, he precludes anything such as the House's motion to recommit.

When the minority's rights are trampled like this, what is it to do? Acquiesce or respond in self-defense? Frankly, it should be no surprise that a minority blocked from influencing legislation through amendments would demand extended debate by opposing cloture. But look what happens. The majority obstructs the minority's right to participate in the development of legislation and then attacks the minority for opposing the passage of that same legislation.

Again, that is not the way the Senate is supposed to operate. It is not just the minority who suffers from this strategy. More to the point, the American people suffer. They sent us to be real Senators, individuals who represent them and their concerns. They expect us actually to legislate, which means to amend as well as debate legislation, not simply to vote on whatever the majority puts in front of us.

Our constituents want us to force attention to public issues, even when the majority would prefer to avoid them. This is the caliber of representation our constituents both demand and deserve. The rules and practices of the Senate have been designed to facilitate just this kind of representation. It is these same rules that the majority now seeks to change because they find them inconvenient.

There is a conceit expressed in Washington that what happens in Congress is beyond the comprehension of interest of most Americans. But that is not so. When our voice is stifled, full representation for our constituents is denied. When we are gagged, the people are gagged. Nothing can be easier to grasp or to provoke greater public indignation.

So my first point is that debate is not the problem. If there is a crisis, it is the majority's gambit of preventing amendments and then filing hundreds of cloture motions to prevent debate. My second point is that the unprecedented tactic threatened by the majority to limit debate even more will only further undermine the integrity of this body.

Some of those pushing in that direction have never served in the minority. But all Senators should be alarmed by this prospect. The majority has talked about changing Senate rules to eliminate the opportunity to filibuster motions to proceed. This opportunity has been available to Senators since at least 1949, and as I have mentioned, the majority leader himself repeatedly seized that opportunity when he was in the minority.

I do not believe the cloture rules need to be changed. I do believe, however, that if the Senate is to consider a change, it should follow the process laid out in our rules.

That process exists for a reason. It is the process we have used to change rules in the past, and there is no reason other than a raw power grab to do it any other way.

Senate rules specify that ending debate on a rules change needs approval by two-thirds of Senators present and voting, and there is a very good reason this is so. This cloture hurdle on rules changes exists to ensure that such amendments are not made without bipartisan cooperation. If anything should require broad consensus, it should be the rules by which this institution itself operates.

That is how, for example, we changed the rules in 2007 concerning the content of conference reports and the use of earmarks or how we established a way to provide for public disclosure of holds. All of these changes, some of which require amending the rules, occurred during the tenure of the present majority leader. None was muscled through by majority fiat or forced on an unwilling minority. Bipartisanship was possible because these changes were good for the Senate.

But now we have learned that the majority may begin the next Congress by disregarding our rules and attempting to change those they find inconvenient by a simple partisan majority. They threaten, as they did before the start of the current Congress, to use the so-called nuclear option to force new rules by single-party will. The substantive changes they have proposed would be degrading enough to the Senate. The method they propose to impose them would be catastrophic.

I urge my colleagues, from freshmen to the most senior Members, to take some guidance from our predecessors, such as Senator Mike Mansfield, who served in the minority and later became majority leader. In 1975, when Senators similarly proposed using this same nuclear option similarly to change the cloture rule by simple majority, he said this tactic would ``destroy the very uniqueness of this body . . . and . . . diminish the Senate as an institution of this government.'' He said it would ``alter the concept of the Senate so drastically that I cannot under any circumstances find any justification for it.''

Senator Reid expressed a similar view in 2003 when he was the minority whip, arguing that rules changes should be considered through regular order, through the process our rules provide. Senator Reid reaffirmed that view in 2005 when he was minority leader, saying that the so-called nuclear option would amount to breaking the rules to change the rules.

Senator Reid further observed:

One of the good things about this institution we have found

. . . is that the filibuster, which has been in existence

since the beginning, from the days of George Washington--we

have changed the rules as it relates to it a little bit but

never by breaking the rules.

In other words, if the majority wants to grab even more power, if blocking amendments is not enough for them, if debate is too annoying for them, if they want to rig the rules to further sideline the minority, then they should use the process we have here in place in the Senate. They should make their case and present their arguments, and if they are compelling enough to attract a wide consensus, then the rules of this body can be changed. That is the way we have changed rules in the past. Senator Reid expressed this view when he was in the minority.

Former Senator Chris Dodd, a good friend to many of us still in this Chamber and someone who, I would surmise, would be sympathetic to the current majority's views on policy, did so while in the majority. He stated in his farewell address his opposition to changing the Senate rules in the way the majority leader presently proposes.

My friend Senator Dodd had this to say:

I have heard some people suggest that the Senate, as we

know it, simply can't function on such a highly charged

political environment, that we should change the Senate rules

to make it more efficient, more responsive to the public

mood, more like the House of Representatives . . . I

appreciate the frustration many have with the slow pace of

the legislative process . . . Thus, I can understand the

temptation to change the rules that make the Senate so

unique--and simultaneously, so frustrating.''

Senator Dodd continued:

But whether such a temptation is motivated by a noble

desire to speed up the legislative process, or by pure

political expedience, I believe such changes would be unwise.

In conclusion, Senator Dodd said:

We 100 Senators are but temporary stewards of a unique

American institution, founded upon universal principles. The

Senate was designed to be different, not simply for the sake

of variety, but because the framers believed that the Senate

could and should be the venue in which statesmen would lift

America up to meet its unique challenges.

Those who know both Senator Dodd and me know that we didn't agree on much during our years together in the Senate. However, on this point, I have to say that Senator Dodd couldn't have been more right. We did agree on a number of things, but it took bipartisan agreement to be able to accomplish that.

Rules changes such as the ones proposed by the majority would alter the very nature of the Senate and undermine its unique purpose. For more than two centuries, the procedural rights of individual Senators, both in the majority and in the minority, have been a hallmark of this body. Those rights and the rules and practices developed to protect them have earned us the reputation as the world's greatest deliberative body. Among those rights are the minority's right to offer amendments and debate. The majority has already put the former under attack, and now the majority leader threatens to undermine the latter. Quite simply, the majority would weaken this institution in a partisan quest for power. Do these steps serve the Constitution? Do they maintain checks and balances? Do they foster bipartisanship? Do they benefit the American people? The answer to all of these questions is resoundingly negative.

I urge my good friend the majority leader and my friends and colleagues on the other side to exercise serious self-restraint over whether and how Senate rules changes proceed. Those who are unhappy with the rules are free to propose amendments. As we have done in the past, those proposals should be referred to the Rules Committee and considered in the regular course of business. If the proposals have merit, support for them will cross party lines.

Bipartisan solutions are urgently needed to resolve the Nation's problems. I speak as a Senator with a long record of working with Democrats to achieve bipartisan consensus and answers. But invoking the nuclear option will unnecessarily start a new Congress on a divisive and discordant tone. It will generate a poisonous climate guaranteed to impair our capacity to cooperate. No majority can expect the minority to stand on the side lines while its rights are destroyed and its place in this body is diminished. Any minority of either party would defend its place and defend the integrity of this body. We will do so now if the majority pursues this reckless and entirely unnecessary course.

I urge the majority to respect the traditions of the Senate and to follow our rules. I urge the majority to avoid rather than generate those crises.

I have to say that we do not want to be like the House. This is a place where legislation has to be cooled, according to Washington. This is a place where we have to do more reflection. This is a place where there are rights in the minority that are time-honored rights, for good reasons. Yes, we don't always get our will or our way here. That is tough for some of us sometimes. But, on the other hand, rather than throw these rules out or to modify them in ways that really diminish them and to use a nuclear option, it is less than honorable, in my opinion.

But the fact is that I have been through a lot of this, and I have to say there is a reason these rules are in existence, and you don't just throw them out the door for political advantage. The fact is that this body was never intended to be one where you could just sluice things through any way you want to and where the majority could get its will no matter what happens. This is a body where literally we have to deliberate. This is a body where we need to bring about a bipartisan consensus. Now, that is hard sometimes, it is painful sometimes, it is irritating as can be sometimes, but it is the right thing to do.

I really don't believe the majority leader is going to push this. I think he is a better man than that. And I don't believe most Senators in the majority would put up with that because they are better men and women than that.

I have to say, on our side, we would like to see full debate. We get a little tired of the majority leader calling up the bill, filing cloture immediately, and then filling the amendment tree so no amendments can be brought up unless he approves them. That is not the Senate's way. I am not saying you can never fill the amendment tree, but that should only be used at the end of the debate when it has gone on too long and it has to be brought to a close. It should not be used at the beginning of

the debate. This is a body where we allow nongermane amendments. It is a body where we have rights. It is what makes it the greatest deliberative body in the world. It is a body where rules make a difference.

Even though they are to our disadvantage now, I will argue exactly the same if anybody on our side, when we get in the majority, decides to change these rules this way. So I hope we all think it through because there will be all-out war from this day on, from the day on that we use the nuclear option to change perhaps the most important rule in the Senate.

The filibuster rule is a time-honored right by the minority. It is one of the only protections the minority has--or should I say one of the few protections the minority has--and it should not be thrown away frivolously.

I say to my colleagues on the other side, you may not believe it, but someday you are going to be in the minority, and you don't want to see these rules thrown out any more than we do. If we ignore this, ``Katy, bar the door.'' We will have obstructed and hurt the greatest deliberative body in the world and the system that has allowed us to be the greatest deliberative body in the world.

I yield the floor.

Would the Senator yield for a colloquy?

There was no intention in my mind to disparage the majority leader. I disparage what the majority leader is doing.

Well, I want to clear it up because he is a friend.

But these rules are friends, too, and I feel really deeply about this. I hope the Senator and other Democrats feel deeply about it too, because you might wind up in the minority someday when some people on our side might want to do what is being done here today. There is a reason for these rules.

I appreciate that.

Mr. President. I appreciate this opportunity to pay tribute today to a wonderful staff member who is a true example of a dedicated public servant. Pat recently retired after 27 years of wonderful service to my office and the people of Utah.

Pat was the public face and voice of my office. She managed the front office and phones with kindness as she greeted literally thousands of people each year. No matter the issue or the anger, Pat would answer each constituent with grace and compassion.

She loved people, and it showed in her every day interactions. She always made the time to listen to visitors to our office, and she truly cared about the problems they were facing. She became the first-line advocate for many, many Utahns who were having problems with the Federal Government, and she would make sure that their calls were returned and their issues addressed.

At times the front desk phones would get extremely busy and many of the calls were from angry constituents. Yet you could always find Pat with a smile on her face and a calm demeanor. She was a strong advocate for the policies and issues I was fighting for on behalf of Utah in our Nation's Capital and always conveyed this in a down-to earth manner. No matter the disagreement, most callers left a conversation with Pat feeling better about why they called.

Pat made friends with everyone and was well known throughout the Federal Building. Many employees from various agencies would look out for Pat and always inquired about her well-being. She had the building management staff and security guards on speed dial and was always able to get the needs of the office addressed in a timely, efficient manner.

Pat's talents were in evident display at the office, but perhaps her great achievements came as a loving mother and grandmother. She dearly loves her family and expresses it often. Her pride and care for her children and grandchildren is evident and central to her

life. I want to commend her children, and most especially Deanna, who are lovingly caring for their mother now in her time of need.

Pat has a strong belief in our Heavenly Father and his son our Savior Jesus Christ. She has made her testimony in the Church of Jesus Christ of Latter-day Saints an important component of her life and has spent countless hours serving others in various capacities.

Mr. President. I am truly grateful for the tremendous service Pat Godfrey rendered to me, to our community, and to the thousands of constituents whose lives she touched with her kindness and compassion. I want to wish Pat the very best in retirement and know that she will make many more wonderful memories in the loving strength of her family. May our Heavenly Father bless Pat for the person she is and the service she has rendered to so many.

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

Mr. President, we are in the midst of an intense debate about how to deal with the expiration of bipartisan tax relief at the end of this year.

The President and the Democratic Party campaigned primarily on raising the top marginal rates. Yet income tax rates are not the only tax policy set to expire at the end of this month. If Congress does not act, the currently low death tax rates which have previously been supported on a bipartisan basis will skyrocket. They will go from an exemption amount of $5 million and a tax rate of 35 percent to an astonishingly low exemption amount of $1 million and a 55-percent tax rate.

The question is clear: Where are the Senate Democrats on this issue? Again, a low death tax has previously been a rare point of bipartisan agreement. Yet this past July, my friends on the other side of the aisle proposed and passed a bill that included a tax cut extension for individuals making under $200,000 or families making under $250,000.

Conversely, the bill would have designated the millions of families in New York, New Jersey, Florida, Virginia, and elsewhere who make in excess of $250,000 as rich and subject to higher taxes. Still, when it came to the death tax, this bill, which was supported by all but one Democrat in this Chamber, was silent.

In other words, that bill assumed that current death tax rates would expire--a crushing blow to America's families and businesses and farms. This bill, which, once again, was supported by nearly every Senate Democrat, would allow the death tax to skyrocket and the exemption to be reduced to the lowest amount in over a decade, creating an administrative and compliance burden for nearly 1 million estates.

Allowing death tax policy to expire is another example of the President putting ideology and sentiment ahead of economic reality. While the death tax targets the transfer of wealth from one individual to an infinite amount of other individuals, the repercussions are felt throughout all income levels.

From a person working in the cornfields, to a cashier at a mom-and- pop store, to a gas station attendant, the long arm of the death tax affects more than the so-called wealthy. It is called the death tax not only because it is a tax imposed at a time when family members are grieving over the loss of a loved one but also because it can be a death sentence for the family businesses and farms that American workers depend on for their livelihoods.

I know a lot of my friends on the other side of the aisle understand this. Some have spoken on the floor of the Senate in favor of extending the death tax rate. Some have introduced legislation to do so.

My friend, the chairman of the Finance Committee, where I serve as the ranking member, has indicated he would like to see the current death tax regime extended. So what is the problem? Unfortunately, bare- knuckle politics is getting in the way of good policy. And the President's insistence on a $2 trillion tax increase is undermining progress on resolving the death tax.

I have been a longtime proponent of repealing the whole death tax. Not only is it double taxation and a deterrent to savings, but it also sucks up capital in the marketplace. The death tax adds inefficiency to our economy. It is what economists refer to as deadweight loss. In other words, it creates another burden on our free market system that prevents the full potential of economic growth.

For instance, many family farms have to purchase insurance in order to prepare for paying the death tax so they do not end up having to literally sell the farm just to pay the death tax. This added cost is embedded into the cost of goods when sold. In other words, American consumers, American workers, or Americans looking for work are those who will ultimately pay the death tax.

This past July, the Joint Economic Committee analyzed the costs and consequences of the death tax. In a report the committee found that, as of 2008, the death tax has cumulatively reduced the amount of capital stock in the U.S. economy by roughly $1.1 trillion since its introduction as a permanent tax in 1916, equivalent to 3.2 percent of the total capital stock.

Coincidentally, since its inception nearly 100 years ago, the death tax has

raised just under $1.3 trillion in total revenue. By comparison, that is equivalent to the U.S. Federal deficit for fiscal year 2011 alone. But that was over all those years--100 years. And keep in mind, the loss is $1.1 trillion, and yet all it has raised is $1.3 trillion. So think it through.

I have some news for those seeking to engage in class warfare. The death tax does not reduce income and wealth inequality. Perversely, the estate tax creates a barrier to income and wealth mobility.

In an interview this past year with the Associated Press, Deputy Secretary of Agriculture Kathleen Merrigan described an epidemic of sorts that is hitting our farmlands across the United States. She did not talk about rising fuel prices or droughts. Instead, Secretary Merrigan discussed how our country's farmers and ranchers are getting older and fewer young people are taking their place. I have heard time and time again that the death tax is the No. 1 reason family farms and businesses fail to pass down to the next generation.

Consider also that heirs are often forced to sell an asset of the farm in order to meet this arbitrary tax. These assets are likely generating revenue and could be a vital part of the family farm. But because of the death tax, family farms and ranches are instead forced to sell these assets or sell the farm to pay the death tax.

This chart shows just in a few States the drought-stricken farmers who are at risk for the death tax in 2013. I have chosen to show South Dakota, Nebraska, Iowa, California, Wyoming, and Montana. You can see the percentages.

As you can see from the chart, in South Dakota, farms over $5 million, 15 percent, farms over $1 million, 49 percent; in Nebraska, farms over $5 million, 16 percent, farms over $1 million, 49 percent; Iowa, farms over $5 million, 15 percent, farms over $1 million, 47 percent; California, farms over $5 million, 11 percent, farms over $1 million, 42 percent; Wyoming--just so I do not leave out the Intermountain West--farms over $5 million are 8 percent of the farms, farms over $1 million are 33 percent. Or take Montana: Farms over $5 million are 7 percent of the farms, and farms over $1 million, 30 percent.

We ought to repeal the death tax. I do not want these farmers to have to sell the farm to pay the death tax. It might make sense in a college social justice seminar, but it has no place in serious discussions about fiscal policy; that is, the death tax.

Recently, the Joint Committee on Taxation released an estimate on how many more taxable estates, farming taxable estates, and small business taxable estates would be affected by the increase in the death tax over the next 10 years. This chart I have in the Chamber shows that.

The numbers are astonishing. If Congress does not act, we will see more than 15 times the number of taxable estates, more than 13 times the number of small business taxable estates, and a whopping 24 times the number of farming taxable estates. And to add fuel to the fire, farmers already have to recoup the economic losses incurred from the recession.

This is kicking farmers and ranchers while they are down. The recent droughts--and that is what this other chart shows--have caused an unprecedented economic hardship. If we decrease the exemption amount for the death tax from $5 million to $1 million, just look at how many more farms will possibly be exposed to the death tax in certain drought-stricken areas.

As you can see on the chart, that central part, shown in the real dark purple or black--whatever that is--that is the big drought area. The States shown in red are not as bad, but they still have very severe drought. The States shown in the darkened area basically are in extreme drought. They have been going through that.

According to the information compiled from the U.S. Department of Agriculture, as you can see on that chart, 15 percent of the farms in South Dakota are valued over $5 million. But look at the number of farms valued over $1 million--an astonishing 49 percent.

Look at California: 11 percent of the farms are valued at over $5 million, but 42 percent of the farms are valued at over $1 million. Then there is Montana where 7 percent of the farms are valued over $5 million but 30 percent are valued over $1 million. Not all of these farms will necessarily be impacted by the death tax next year, but I can guarantee you that most of them will down the road.

The fiscal cliff presents us with a pivotal moment. How we tax our citizens is ultimately a question of what we stand for. With respect to the death tax, the question is whether we stand for families and jobs or whether we stand for redistribution regardless of the consequences.

We need to resolve death tax policy. We can no longer afford to put small businesses, family farms, and individuals in a position where each year uncertainty about the death tax rate and exemption amount causes them to divert income away from creating jobs and toward unnecessary death tax planning. This is important stuff, and it is not something we can just blindly or blithely wipe out.

It is time for the President to lead on this issue. The President, tellingly, said when he was running for President in 2008 that his experience running for President was one of the critical bullets on his resume qualifying him for the job. Other than writing and part-time teaching, President Obama has made a career running for office. Well, he will never run for office again, as far as he is concerned. It is time to put aside the campaign and take up the mantle of leadership. It is time to make the tough decisions necessary to get our economy moving again.

Resolving the death tax is a good place to start, and should he decide to lead, he will find partners on both sides of the aisle to join him.

As you can see from those charts, these are serious matters. To have to sell the family farm in order to pay the death tax is not a good thing or to have to borrow to keep it alive is not a good thing. To have to pay heavy insurance rates through the years to be able to pay at least something of the death tax--it may be a better way of trying to help, but it puts these farmers and their families in a real bind.

We should get rid of the whole death tax, but I do not believe our friends on the other side are willing to do that. So then the least we should do is keep the tax rate at 35 percent, with an exemption of $5 million, doubled to $10 million for the family. That would help a lot of these farmers keep their farms, it would help our country to still be an agriculture-related country, and it would stop voracious people from hovering over those farms, swooping them up at low rates.

I suggest the absence of a quorum.

Madam President, I want to praise the distinguished chairman of the committee. He has done a wonderful job, and, of course, he has been a pleasure to work with.

This bill marks an important step forward in our relations with Russia and Moldova. Once this bill is signed into law, our workers, job creators, and farmers will be able to take full advantage of Russia and Moldova's accession to the WTO.

The bill includes strong enforcement provisions to ensure that Russia lives up to its international trade obligations. Finally, this bill will help advance human rights and the rule of law in Russia.

Today's vote would not be possible without the combined efforts of many dedicated public servants. First, I would like to thank the staff at the Office of the U.S. Trade Representative. Many of them toiled for years to bring Russia and Moldova into the WTO, often at great personal sacrifice.

I also would like to take a moment to thank my colleagues for all of their hard work in helping to craft this bill. An open and transparent dialogue was critical to our success. And I would particularly like to again express my appreciation to all the Republican members of the Finance Committee who worked with me and my staff in good faith to develop a strong enforcement package which will address many of the concerns we all have regarding our bilateral trade relations with Russia.

Finally, I would like to thank my friend and colleague, Senator Baucus, and his wonderful staff because he and his staff have had a great willingness to work with us to make sure our concerns were addressed in the bill. At the conclusion of my remarks I will provide for the Record a list of names of staff members from both our offices.

The process we undertook in the Finance Committee is emblematic of how the Finance Committee should work. It is my sincere hope this will be a model for future legislation. Working together, I am confident we can continue to develop policies to grow our economy through international trade and, hopefully, help advance the rule of law around the world. This is a good package that deserves our strong support. I urge all of my colleagues to join me in supporting this bill.

I believe we have to do more in the international trade world. Earlier, due to the efforts of the distinguished chairman, Senator Baucus, and his staff and my staff, we were able to get the Korean, Colombian, and Panamanian treaties through. These were steps in the right direction for all of these years, and to have this happen is going to be a wonderful thing, I think, for our country and for Russia itself, and it certainly is going to help us go down the line in doing what is best for our own trade.

One of the other special things that is in this is it is going to cause Russia to have to live up to some international trade and international intellectual property laws. We in this country believe in obeying those laws, and I have to say Russia, India, and China have invaded intellectual property in areas they shouldn't have. Hopefully, this type of agreement, PNTR, will help alleviate that problem.

So I urge my colleagues to join Senator Baucus and I in voting for this very important bill. Again, I thank staff on both sides for the wonderful work they have done and the Trade Representative in his office, as well, for the wonderful work they have done.

I reserve the remainder of my time.

Human Rights Abusers

Madam President, today I wish to thank my colleagues for their support of legislation granting permanent normal trade relations to Russia and Moldova. This legislation allows U.S. businesses to take full advantage of trade opportunities in Russia and Moldova following their accession to the World Trade Organization. Legislation normalizing our trade relations with both these countries has taken years to complete. It is important to note that, while the WTO accession process opened the door for U.S. businesses to take greater advantage of trade with Russia, we have created a number of new enforcement mechanisms which, in this, will, I very much hope, hold Russia accountable for meeting their international obligations.

This process and its success would not have been possible without the leadership our chairman, Senator Baucus. I deeply appreciate his willingness to work with me to address the many concerns I and our colleagues on the Finance Committee had with Russia's accession package. It is truly a pleasure to be working with someone so fully committed to opening markets and securing new opportunities for U.S. workers and job creators in the international marketplace. I hope our work together on this bill will be just the beginning of a long and fruitful partnership.

I would like to acknowledge a few of the many people who helped make this a successful process. First, I would like to recognize the efforts of the U.S. Trade Representative's Office who assisted in the very long process of assembling the Russia WTO accession. Special recognition must go to Elizabeth Hafner, Director for Russia and Eurasia; Catherine Field, Deputy General Counsel for Negotiations, Legislation and Administrative Law; Cecilia Klein, Senior Director for WTO Accessions; Stephanie Murphy, Director for Agricultural Affairs; Scott Pietan, Director for Industry Trade Policy; and Thomas Fine, Director for Services Trade Negotiations. I would also like to recognize former members of the USTR Office who dedicated many years to this process, including Dorothy Dwoskin, Matt Rohde, and Chris Wilson, who all served as former Assistant United States Trade Representative for the World Trade Organization and Multilateral Affairs, as well as the current AUSTR, Mark Linscott.

Senator Baucus staff was instrumental in helping us advance this process and craft today's bill. I would like to thank them for all of their efforts. In particular, I would like to acknowledge Russ Sullivan, the majority staff director of the Finance Committee; chief international trade counsel Amber Cottle; international trade counsels Bruce Hirsh and Lisa Pearlman; trade advisors, Chelsea Thomas and Hun Quach; international trade analyst, Rory Murphy; and their detailee from Customs and Border Protection, Heather Sykes.

Finally, I would like to recognize my dedicated and hardworking staff. In particular, I would like to thank the staff director of my Finance Committee staff, Chris Campbell; my chief international trade counsel, Everett Eissenstat; international trade counsels Paul DeLaney and Greg Kalbaugh; our detaliee from Customs and Border protection, Richard Chovanec; our detailee from the Department of Commerce, Steven Garrett; and our international trade staff sssistant, Rebecca Nasca. They worked tirelessly to help prepare this bill for our consideration, and I am grateful for their hard work and dedication.

We can all be proud of this bill. It provides significant new tools to battle corruption within Russia while at the same time enabling U.S. workers and job creators to take full advantage of Russia's membership in the World Trade Organization. I look forward to President Obama signing it into law as soon as possible.

I yield back the remainder of our time.

I ask for the yeas and nays.

Madam President, in less than 1 month American taxpayers face the greatest tax increase in our Nation's history.

Two years ago the President and the Senate Democrats opted to postpone these tax increases for 2 years. They did so knowing that raising taxes in a weak economy is an unnecessary and counterproductive jolt to the system. Forty Democrats supported doing that.

Since then, however, the President has been single-minded in arguing for tax increases on certain wealthy taxpayers. He and his Democratic friends promoted these tax hikes in the name of a so-called balanced approach to deficit reduction. Now, with the country fast approaching the fiscal cliff, it is time to pay the piper. But as the President issues ultimatums about what kind of tax increases are necessary to avert the fiscal cliff, it is worth noting that he has abandoned any pretense of seeking a balanced approach to deficit reduction.

Last week's proposal from the White House amounts to little more than a massive set of tax increases--by the way, far in excess of the tax hikes he ran on or anything that Senate Democrats would support, coupled with new spending. Even Democrats don't support what he called for. And his response to Speaker Boehner's balanced plan is raise taxes today, and next year we will come back and discuss raising taxes again.

The President's commitment to a balanced approach to new tax revenue and spending reforms has morphed postelection into new tax revenue and increased spending. To cap it off, they have thrown in a fresh demand that would eliminate any limit on the Federal debt.

The proposal outlined by Treasury Secretary Geithner last week shows that, if given a chance, Democrats will never use new taxes to reduce the deficit. They will instead use it to pay for larger government, more public workers, and more government waste.

We need to have a serious conversation about our Federal debt, which is now over $16.3 trillion and going up every day. How do we get that number under control? The President and his Democratic friends have suggested for years that they can do it on the revenue side specifically by taxing the wealthy. Yet the new taxes on the rich promised by the President during the campaign would reduce the next 10 years' of deficits by only 8 percent, assuming they didn't do any more spending.

So where is the rest of the money going to come from? We need to have a serious conversation about spending, but so far the President, congressional Democrats, and the liberal interest groups who support them have refused to engage.

All I can say is that Republicans are here, and we are ready to talk. We are ready to reach a balanced resolution that would spare the American people from the consequences of going over the fiscal cliff.

I have only been here 36 years, but I have seen every President willing to meet on a regular basis at budget crunch time with people on both sides of the table over and over and over until they gradually whittle it down to where they can agree. I haven't seen that with President Obama. I have even heard Democrats complain that he never talks to them.

We cannot do this kind of work without very strong Presidential effort. That is what Presidents are for. And it can't just be laying down a gauntlet or saying: You can't cross over that, drawing a line in the sand. You have two programs now, and those two sides need to get together. That includes the President and whatever Democrats he cares to put in the equation, and also Speaker Boehner, Leader McConnell, and others.

As we attempt to reach a meaningful resolution of this debate in the coming weeks, there are three guideposts that I will keep in sight.

First is the cliff itself. Going over it would be the height of irresponsibility. According to the Congressional Budget Office, going over the cliff will reduce GDP to a negative one-half of 1 percent next year, throwing us back into a recession and causing unemployment to surge to 9.1 percent or more. But it seems increasingly clear that the President and Democrats in Congress are content to go over the cliff regardless of the outcome. I can't believe that is so, but I have heard them say it. They think they will have an advantage if we go over the cliff.

Well, I hate to tell you, there will be no advantage to that. Leading Democrats have expressed on several occasions their openness toward going over the cliff. The question is, Why? Why would the President do this? Why would Democrats jeopardize the livelihoods of hundreds of thousands of American workers and the economic security of their families? Why are they putting raising tax rates on a few ahead of the well-being of all?

Republicans are working to avoid this outcome. We want to avoid raising tax rates because we know once they are raised they will stay there or there will be another demand next year to raise them higher. We have a good argument for that. We believe it hurts the economy by harming incentives to work, save, and invest.

Republicans have expressed some willingness to work with the President to raise revenue without raising tax rates, but the President refuses to budge. After all, he argued during his reelection that the deficit reduction math does not work otherwise.

This leads me to my second guidepost in this debate. It is the President's math that does not work, and his math is off in a multiplicity of ways. Let's start at the beginning. Last year's deficit was $1.3 trillion. Next year's deficit is likely to exceed $1 trillion for a fifth year in a row.

So what would the President's tax hikes proposal raise in terms of revenue? What would it have done to last year's $1.3 trillion deficit, and what would it do to reduce our debt over the long term? If all of the 2001 and 2003 tax relief were to expire, it would reduce the deficit by $426 billion over 1 year.

To put it another way, the full extension of the current bipartisan tax relief would cost $426 billion over 1 year.

Now, that is a lot of revenue. But the President and congressional Democrats--or at least most of them--have no desire to see all of this tax relief expire. In fact, their plan, should we go over the cliff, is to reinstate almost all of it. They say they only want to raise taxes on the rich.

So how much would it cost if we extended current tax relief for everyone but those making over $250,000, which some have said is the line for being rich? Assuming the estate tax stays where it is--a fair assumption, given the level of support for that policy even among Senate Democrats--the cost of extending all of the tax relief except for those individuals would be $358 billion. And given that certain Senators from high-income blue States are uncomfortable designating families making $250,000 a year as rich, it has been suggested that the current tax relief might be extended for everyone but so-called millionaires. Warren Buffett has said those earning $500,000 a year or more, but others have said millionaires. And how much would that cost? The 1-year cost of that tax relief would be $383 billion.

There are a few different ways we can look at these numbers. One way is to

compare the cost of the Democrats' tax plan with that of the Republicans'. The 1-year difference between the Republican proposal of extending all tax relief and the Democrats' proposal to raise taxes on the rich is, at most, $68 billion and perhaps as low as $23 billion. With the deficit over $1 trillion, is the President willing to send us over the cliff for as little as $23 billion in additional revenue? I cannot believe he is, but he is.

Another way to look at the numbers is to compare the cost of the Democrats' actual plan with the President's stated desire to raise revenue by $1.6 trillion. He cannot get that from just the rich. Even if he took every dollar every millionaire earns this next year, he probably would have a little less than $900 billion. That may be high.

I look forward to some enterprising reporter getting to the bottom of this one. The President says he wants to raise taxes by $1.6 trillion and his Treasury Secretary suggests Democrats are on board with this strategy. I do not believe that for 1 minute. I don't believe his program would pass the Senate, and I don't think many Democrats would vote for it. I know at least 20 who will not. Yet the revenue generated by the proposal supported by real live Democrats seems to raise only between $353 billion and $383 billion.

Here is the question: Where is the President going to come up with another $1.2 trillion or so in tax increases that his fellow Democrats will support? We have seen three budgets the President has sent up, and they have not received one vote from either Republicans or Democrats-- not one. Where is the President going to come up with another $1.2 trillion or so in tax increases and be able to get Democrats to support him? I do not mean supported by Democratic pundits; I mean supported by the 20 Democratic Senators who will be facing their constituents in 2014. The $1.6 trillion tax increase is lifted from the President's own budget that has been rejected on a bipartisan vote--100 percent in both the House and the Senate--and that budget received no votes at all, Democrat or Republican, in either the House or the Senate. As I said, it is the President's numbers, the numbers Secretary Geithner sent here last week to promote that do not add up.

The President's insistence on a $1.6 trillion tax hike that is neither supported by the American people nor even elected Democrats is not about deficit reduction. The President and congressional Democrats think they can bludgeon Republicans as an out-of-touch party of the rich because we support tax relief for everybody.

Let me say a few words in our defense. First off, and I want to say this loudly and clearly: I could not care less about the financial well-being of the Nation's rich. Whether Warren Buffett is able to maintain his corporate jet is no concern of mine, although he is a friend. The continued ability of actors and entertainment industry executives to summer at Lake Como and winter at Saint Kitts is not on my list of priorities. In fact, I believe when we do finally engage in fundamental tax reform it is worth our while to look at how these superrich are sheltering their wealth from the full burden of income taxation while the middle class continues to suffer on both the income tax and increasingly the alternative minimum tax, which is going to hit about 28 million regular people who are not millionaires on January 1, if we go over the cliff.

Still, I, along with most of my Republican colleagues, continue to promote the seamless extension of current tax policy. That is because of the impact of increasing marginal rates on small business owners and the consequent impact on job creation and economic growth. We know it is going to hit approximately 1 million small business owners very hard; most of whom put their money back into the business so they can grow it and hire more people.

Republicans support low marginal rates because we know that by raising rates we hamper the efforts of investors, small business owners and, most importantly, the American workers they employ. Republicans are averse to rate hikes that would have a detrimental impact on people's livelihoods. We are averse to rate hikes that would undermine the prospects of fundamental tax reform that promotes fairness and economic growth, and we are certainly averse to a discussion about increased revenue in the absence of serious talk about spending reform--something that is not, except in minuscule ways, in the President's suggestions.

We keep hearing Republicans are dug in on the issue of taxes and that their resistance to increased revenues has been holding back the big balance deal set by the President. This has to be one of the most misreported stories in my memory. Many Republicans have stated openness to increased revenues. There is a difference between revenues and tax rate increases that we Republicans continue to point out. But we are only willing to be open to increased revenues as part of a balanced deal and only if revenue increases are coupled with entitlement spending reform.

This brings me to my third guidepost for this debate. The President has shown a real stubbornness toward any reform of the spending programs that are the main drivers of our deficit and debt. We hear constantly about the intransigence of Republicans with their antitax rate increase views. Yet we do not see the same front page stories documenting the over-my-dead-body resistance of Richard Trumka, the head of the AFL/CIO, and the head of the AARP toward entitlement spending reform which everybody knows we have to do if we are going to keep Medicare going. I don't think there is anyone in this body who doesn't know that within 10 years it will be broke, unless we make the appropriate structural reforms now.

The President continues to call for a balanced approach to deficit reduction, but in practice he is offering all tax increases and no spending discipline. He has offered nothing meaningful on entitlement reform. The proposal put forward last week by Secretary Geithner was embarrassing.

I happen to like Secretary Geithner. I stood up for him under some trying circumstances on the Finance Committee before he was approved by the Senate. I did it because I believe he is a hard worker. I believe he is an intelligent man, and I personally like him. But, my gosh, if I were the Treasury Secretary and the President gave me that plan to go and show it to the leader of the House, the Speaker of the House, I would have said: No, Mr. President, you can't do this. This is an insult. If the President said you have to do this for me, I would say I think it is better for me to resign at this point.

It is embarrassing. I think Secretary Geithner knows it. If he does not, then he is not the man whom I have always thought he was. That proposal did nothing to address spending, aside from wanting to increase it. But that is where the Democrats are.

I understand the Democrats' predicament. Right after the election it appeared the door was open. The President seemed willing to address tax revenue in a responsible manner, a manner respectful of the legitimate concerns of the House majority and the 62.6 million individuals who did not vote for him. But within 1 week he was read the riot act by the unions and the AARP, who will resist any meaningful changes to the retirement spending programs that are now bankrupting our country.

Later this week I will outline a series of entitlement changes that could and should be supported on a bipartisan basis. The President told the American people he wants a balanced approach. My hope is the President comes forward on his own with his own details on how he would fix the entitlement spending programs; I mean real details on real proposals with real teeth, not the window dressing in the President's budget that even the Democrats reject and have rejected in the past.

The President has demanded a balanced approach. It is what he promised the American people and it is what we Republicans are prepared to give him. If the President wants to avoid going over the fiscal cliff, he can steer us away from it. The special interests and his liberal base will no doubt cry foul, but they will follow him if he will lead, and I don't see the leadership, between you and me.

Not to put too fine a point on it, but if we go over the cliff, it will be because the President wanted it to happen and he thinks he will get political points for doing it. With the Main

Street media, it is likely they will ignore the actual facts. Even though the President will never again run for any public office, he will have put cheap political points ahead of a reasonable deal he claims to support.

This is deeply cynical, and the President should understand that when the history of this episode is written, he will be portrayed not as a strong leader but one who wilted in the face of our generation's greatest challenge, caving in to the special interests over the well- being of the country. When he faced the choice of tough statesmanship or easy accolades from his house cable news network and a dead-ender base, he chose the latter.

I think it is time for the President to start leading and to put away his campaign talking points and talk to us rather than talking from a toy factory and trying to make his points. He needs to put away his campaign talking points, and he needs to engage in finding a balanced solution to our debt crisis. He needs to lead the country, and he needs to protect American small business, their workers, and their children from an increasingly dim fiscal future.

I am concerned about it. As I study it, the difference between the President's plan and what Senator McConnell and I have suggested, putting it over for 1 year and giving us 1 year to dedicate that to tax reform, the difference is about $23 billion. At the most, it is $68 billion. We are going to go to the cliff, $23 billion? We would have to be nuts, even if our illustrious media will cover it up.

I yield the floor.