Floor Statements

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I rise to speak on a matter of great importance to the economic health of State and local governments. I am talking about dangerously underfunded employee pensions.

We hear about this problem every day in States such as Illinois, California, New Jersey, and many others. It is a multitrillion-dollar problem. Let me repeat that. The underfunding of these pensions runs into the trillions of dollars. Not billions, trillions.

How did this happen? There are two primary causes. First, governments have promised too much money in lifetime pensions; and, second, governments have not set aside enough money to pay for those pensions. The shortfall between the money that has been promised and the money set aside is called underfunding, but that is just a sterile accounting term that means we don't have enough money to pay the bills. Where I come from, that is called being broke. It is bad enough when you go broke because you have been irresponsible with your own money. Yet it is a tragedy when governments go broke being irresponsible with taxpayer money.

That is what I fear we are watching as this public pension crisis unfolds. There have been many studies in recent years of our public pension crisis. There is no question about whether this crisis exists. The only question is the magnitude of the crisis.

One prominent study by scholars at the Kellogg School of Business at Northwestern University estimates that public pension plans are underfunded by over $3 trillion. That is a lot of money. An analyst at the Brookings Institute says public pensions are $2.5 trillion in the red. A study published last month found that all by itself, California has a $240 billion pension shortfall. You heard that right. California alone has a pension debt of $\1/4\ trillion. Some have estimated that Illinois is in even worse financial shape.

If the States and localities do not act aggressively to address these shortfalls, then the question will not be whether the States will become insolvent but when? Regardless of whose numbers and which study gets the closest to the mark, there is no denying that public employee pensions face a multitrillion-dollar shortfall in the aggregate.

Though none will deny this shortfall. Some will seek to shift the blame and shirk responsibility for this crisis. I want to nip in the bud one of the arguments of those interests who would prefer to ignore this crisis. They will argue this is not a problem of too many pension promises and the underfunding of those promises. They will try to divert attention from the fact that public employee pensions have too often not been funded on a sound basis. Instead, they will say the pension funding problem is owing to the 2008 economic crisis and the big businesses that, they say, caused it. This is way off the mark. But don't trust me, trust the numbers. This pension shortfall existed before the recession, and an attempt to lay blame at the feet of Wall Street or big business or some other group is just plain blame shifting.

One aspect of the problem is that governments have been slow--and public employees have been resistant--to transitioning to the types of retirement plans that private sector workers have been living with for years. The rest of the world has moved toward 401(k)-style plans, called defined contribution plans. In these plans, costs are lower and more predictable. They fit well with an increasingly mobile and dynamic workforce. Yet governments have remained wedded to expensive, traditional pension plans for far too long.

These old-style traditional pension plans--defined benefit plans--owe a monthly payment for life to each employee regardless of how much money the government has set aside, regardless of how well the pension assets have been invested, and regardless of whether the ratio of active workers to retirees has remained stable. For most private companies these plans proved simply unsustainable, and over time they moved toward more flexible retirement plans for employees. Yet as usual, government is slow. It is slow to innovate and slow to adapt.

So even though these defined benefit plans had the potential to cause enormous financial problems for governments, governments stuck with them. Private companies learned long ago that traditional pension plans are too expensive for most businesses.

In 1985, 80 percent of medium and large private companies had a traditional pension plan. Today, just 30 percent have a traditional plan. By contrast, 84 percent of State and local government workers are covered by high-cost traditional pension plans. And government is not just any employer. Governments only exist because of taxpayers.

Ultimately, taxpayers are the employers of government employees. Yet these governments are living in the past, playing irresponsibly with taxpayer money, and leaving taxpayers to foot the bill for too many lifetime pension promises.

So why do these lifetime pension guarantees continue? There are many reasons, but at the top of the list is the unique character of government as an employer. Private employers moved away from traditional pensions to more affordable 401(k)-style plans because they can't stay in business if they ignore economic reality. Yet governments have kept their unaffordable traditional plans, often because public employee unions use taxpayer-funded union dues to elect State and local politicians and then ask the same politicians they just elected for costly pension deals at taxpayer expense.

When a union bargains with a private employer, employer and employee have an interest in the business continuing as a viable enterprise. If the benefits are costly and uncontrollable, the business goes under and everyone is out of a job.

But where are the interests in a negotiation between a public employee union and the person they just helped to elect to office? Where are those interests? Union bosses are sitting across the table from the Governor of the

State--the Governor they just helped to elect with millions in campaign contributions--and they ask him for a costly, guaranteed lifetime retirement package, often with little or no cost-sharing by the public employee. What is a politician going to say? Sorry, but I can't help you? I doubt it.

I want to read something from the Wall Street Journal. On October 22, 2010, just prior to the last election, the Journal carried a story about the role the American Federation of State, County and Municipal Employees, or AFSCME, was playing in that election. According to the journal:

The American Federation of State, County and Municipal

Employees is now the biggest outside spender of the 2010

elections. The 1.6 million-member AFSCME is spending a total

of $87.5 million on the elections after tapping into a $16

million emergency account to help fortify the Democrats' hold

on Congress. Last week, AFSCME dug deeper, taking out a $2

million loan to fund its push. The group is spending money on

television advertisements, phone calls, campaign mailings and

other political efforts. ``We're the big dog,'' said Larry

Scanlon, the head of AFSCME's political operations. ``But we

don't like to brag.''

``We are the big dog.'' That about sums it up. And when the big dog barks, it expects the people it helped elect to jump. Why do you think they are spending all this money? Because public employee unions care about global warming?

Richard Trumka, the head of the AFL-CIO, a man I respect, has said he talks with the White House every day and visits a couple times a week. Why do people think he is doing that? Playing pick-up basketball with the President? He is talking about how to benefit his unions, and lately that means public employee unions.

There were some recent reports suggesting that Organizing for America--a Democratic National Committee project designed to reelect President Obama--was helping to foment the protests in Wisconsin. These unions are spending big-time money to elect politicians because they know the politicians will deliver big-time benefits. But the chickens are coming home to roost. As we are seeing in State after State, the markets have something to say about these collusive relationships and the benefits they secure. The credit-rating agencies have announced they will begin factoring unfunded pension obligations into the calculations they use to rate the creditworthiness of States. This is significant because the total value of State bond debt is estimated to be around $1 billion, while pension debt is at least two or three times that amount.

State credit ratings reveal another aspect of the State budget crisis. The five States that prohibit collective bargaining of retirement benefits have Moody's highest credit rating. California and Illinois, which allow collective bargaining of retirement benefits for public employees, have the lowest credit rating among the 50 States. The next four lowest States also allow collective bargaining.

Illinois is in the worst shape of all, with less than 40 percent of the funds needed to pay its public employee pensions. The Illinois situation is so dire that for the last 2 years the State has had to borrow money just to make its pension contribution. This year Illinois had to pay a 2-percent higher interest rate just to borrow money to contribute to its pension program. Now, this is madness, and it cannot go on forever.

Thirty years ago the Federal Government moved away from an expensive traditional pension plan and set up a basic pension plan in combination with a 401(k)-style defined contribution plan. The system has worked well so far, although at some point we might need to reform Federal pensions too. Some forward-looking States have begun moving to 401(k)- style plans.

In my own home State of Utah the traditional pension plan is being replaced. New employees are being given a choice between a 401(k)-style plan and a hybrid plan with a combination of traditional and 401(k)- style features.

Last year Governor Chris Christie in New Jersey added a 401(k) plan for a portion of the New Jersey workforce. In Kansas, Governor Sam Brownback and the Kansas Legislature are studying the possibility of converting their pension system into a 401(k)-style plan. In Wisconsin, Governor Scott Walker has asked that the State study the feasibility of establishing a 401(k)-style plan.

There are many potential solutions to the public pension crisis, and all of them should receive consideration. We should be encouraging these courageous Governors on rather than demonizing them and demagoguing this issue. I, for one, would like to congratulate the Governor of Wisconsin for his bold stand on the issue of public employee benefits. The victory he secured last week is significant. He stood responsibly for the long-term interests of his State rather than doing the easy thing and caving under the pressure of union-organized protests and the childish and disrespectful resistance of Democratic lawmakers who chose to flee the States rather than engage in this debate.

Governor Walker understands our greatest enemy is delay. The director of the Pew Center on the States has said that while these problems are significant, they can be solved if we act now. If we wait, the crisis will become unmanageable.

Mr. President, it is my intention as ranking member of the Finance Committee to find a way to address the public pension crises if State and local governments don't step up to the plate. I am under no illusions this will be an easy task. The problem is both large and complex. There are many potential solutions that must be studied, and some will not be pleasant.

Some of my colleagues in the Senate have a proposal to address the problem, and I will be working with them as well. I do not have all of the answers yet, and I have not settled on what I believe are the best solutions. But we are working hard and talking to the experts about the best way to proceed.

I am sure of one thing, however, and I want to be 100 percent clear about this. There will be no Federal bailout of any State or local government. Let me just repeat that. No Federal bailout.

Just last month, after Illinois sold its high-interest bonds, the Governor indicated that he plans to ask for a Federal guarantee. Well, Governor, you can save your breath. The answer is, no.

We cannot ask taxpayers and the rest of the country to pay for underfunded pensions in Illinois, California, or any other State that made promises it clearly cannot keep. To do so would be more than unfair; it would be immoral. A Federal bailout cannot happen, and it will not happen.

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

Mr. President in a few hours, this body will vote.

This is a solemn responsibility, one not to be taken lightly.

At Gettysburg, Abraham Lincoln reminded Americans that those who died on that battlefield fought for government of the people, by the people, and for the people.

We are only here because the people, our constituents, sent us here. And every time we vote, we represent them. We represent their aspirations. We represent the dreams of growing families and entrepreneurs. We represent the interests of taxpayers.

Of course, not all votes are created equal. Some are more important than others. And in my view, the votes that we are taking today are transcendent. They are quite literally about the future of this country.

Are we going to be a country with a constitutionally limited government; are we going to be a country that limits the burden of taxation on individuals and families and businesses; or are we going to become Europe?

Are we going to move toward a full-blown cradle-to-grave nanny government with the majority of Americans on the public dole and a small group of individuals bankrolling an ever expanding leviathan state?

In short, are we going to remain America--a beacon of freedom to the world or do we aspire to become a second European Union with high taxes, high spending, and measly economic growth?

Again, I remind you that we represent the aspirations of our constituents.

I represent the people of Utah. And I can tell you that they do not wake up in the morning and say--You know what--America would be much better if we were more like France.

This is no exaggeration.

Right now government spending is at 25 percent of gross domestic product. And if we do nothing, that number is just going to grow, pushing past 25 and cruising toward 28 percent of GDP. The last time we did that was during World War II.

Republicans and Democrats have very different ideas about how to address this spike in spending.

Either we can step off the pedal, hit the brakes, and bring spending back in line with historical levels--levels that respect our Constitution of limited government and respect taxpaying citizens or we can keep the car on cruise control and drive the car off the cliff.

Republicans want to hit the brakes.

Democrats want to pull a Thelma and Louise with our economy.

I, for one, am not going to sit back and let them do this. Let's be clear about what the Democrats and Republicans are proposing.

H.R. 1, the bill that passed the House, appropriates $1.026 trillion in nonemergency discretionary spending.

The alternative offered up by my Democratic colleagues would appropriate, $1.079 trillion in total nonemergency discretionary spending.

H.R. 1, the bill passed by the new Republican majority in the House-- a majority that most closely represents the views of millions of Americans who are genuinely scared about our Nation's fiscal trajectory--would reduce spending by $57 billion over the current continuing resolution.

The Democratic alternative would reduce spending by just $4.7 billion.

You will hear Democrats complain about the draconian cuts in the House-passed H.R. 1.

This is nonsense.

The fact is, when you look at Federal nonemergency discretionary spending as a whole--which has exploded under Democrats' control of Congress and with President Obama's acquiescence in their big spending ways--H.R. 1 provides modest cuts.

The people of Utah, and the people of this country, understand this.

So now that Republicans are winning the game on spending cuts, Democrats are seeking to move the goal posts.

It is now being suggested that we can bridge the gap between these two bills by going after entitlements and tax expenditures.

Don't get me wrong, we need to address both. But I can tell the Members on the other side now that we are not going to let you shift the debate.

This is a debate about discretionary spending. This is a debate about low-hanging fruit.

Last week, the Government Accountability Office issued a report detailing possibly hundreds of billions of dollars in government waste and bloat.

There is plenty of fat to be cut in the discretionary budget, and doing so would give our constituents and Members of Congress the courage to go after bigger fish.

Yet, Democrats can't find it in themselves to cut an additional $50 billion when nonemergency discretionary spending is well over $1 trillion.

Some are now proposing that we get into tax expenditures. Tax expenditures are a debate for another time.

Nondefense discretionary spending has grown by 24 percent over the last couple of years. We can cut that back significantly. We need to do so, and Americans understand that going back to 2008 spending levels is not the end of the world.

I also want to correct the record with respect to H.R. 1 and Medicare Advantage.

Yesterday, Secretary Sebelius sent a letter to my colleague, the chairman of the Finance Committee, Senator Baucus, suggesting that H.R. 1 would have a detrimental impact on Medicare Advantage.

This assertion is Orwellian. The Secretary knows full well that ObamaCare cuts more than $200 billion from an MA program that currently serves nearly 12 million seniors. According to the administration's own Chief Actuary, these devastating cuts will reduce enrollment in this popular program by 50 percent. Furthermore, the CBO has also found that these cuts would reduce important benefits by 50 percent for seniors enrolled in the program.

H.R. 1 is intended to halt the harmful cuts to seniors in the MA program.

Suggesting otherwise, as the Secretary did, is both inaccurate and risks confusing millions of seniors.

H.R. 1 is a good bill. It is solid and responsible. And I will be supporting it. But it is only a starting point.

The fact is, we are going to need many more cuts in discretionary spending.

The American people--the people who sent us here--have not signed on to the Democrats' project of Europeanizing the United States economy.

Citizens in every State want to roll back spending, reduce the tax burden on families and businesses, and--restore America's promise of opportunity and economic growth.

My colleagues on the other side of the aisle need to get with the program. We will be cutting spending. And we need to cut a lot of it. It may not all happen in the next 2 years.

The American people might need to speak again and send people to Washington in 2012 who will accurately represent their interests.

This is a big vote today. And when we look back, I think Americans will say: It was just a beginning.

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

I thank the Senator. I agree with the chairman that it is important that we set down a definitive legislative history of those subsections, which will be important for each and every patent application.

The Senator from Vermont is correct. For the purposes of grace-period protection, the legislation intends parallelism between the treatment of an inventor's actions under subsection 102(a) that might create prior art and the treatment of those actions that negate any prior-art effect under subsection 102(b). Accordingly, small inventors and others will not accidentally create a patent-defeating bar by their prefiling actions that would otherwise be prior art under subsection 102(a) as long as they file their patent applications within the grace period provided by subsection 102(b). But, the important point is that if an inventor's disclosure triggers the 102(a) bar with respect to an invention, which can only be done by a disclosure that is both made available to the public and enabled, then he or she has thereby also triggered the grace period under 102(b). If a disclosure resulting from the inventor's actions is not one that is enabled, or is not made available to the public, then such a disclosure would not constitute patent-defeating prior art under 102(a) in the first place.

But even if the disclosure was enabled and available to the public so that it did qualify as prior art under subsection 102(a), subsection 102(b) would require that the disclosure be disregarded if it occurred during the 1-year grace period before the patent was sought. Indeed, a disclosure that does not satisfy the requirements to be prior art under subsection 102(a), nonetheless constitutes a disclosure that is fully protected under the more inclusive language of subsection 102(b). This relationship between these subsections will fully protect the inventor and, together with the provisions of subsection 101 limiting patenting to inventors, prevent others from obtaining a patent on the inventor's creation.

An additional clarification we have been asked about deals

with subparagraph 102(b)(1)(B). There has been some confusion over how this provision will work. It is my understanding that this provision ensures that an inventor who has made a public disclosure--that is, a disclosure made available to the public by any means--is fully protected during the grace period. The inventor is protected not only from the inventor's own disclosure being prior art against the inventor's claimed invention, but also against the disclosures of any of the same subject matter in disclosures made by others being prior art against the inventor's claimed invention under section 102(a) or section 103--so long as the prior art disclosures from others came after the public disclosure by the inventor. Is that the Senators' understanding of this provision?

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

Madam President, before the Senate moves to final passage of the America Invents Act of 2011, I wish to express my unequivocal support for this bill. This is not a perfect bill, but the fact is it is going to be a very important occasion to pass this because we haven't passed a major piece of patent legislation for over 60 years or around that length of time. It has been a long time in the making, but it is well worth the effort to modernize our patent system. Despite modifications along the way, the bill retains its strength and ability to bring about true reform.

In considering our country's economic condition, the bill's passage could not come at a more opportune time. The America Invents Act is integral to creating jobs and spurring growth across all sectors of our country. After all, jobs and economic growth are crucial to maintaining our Nation's dominance in innovation and entrepreneurship.

I would like to briefly mention a few key provisions of the act that improve our outdated patent system. These include transitioning to a first-inventor-to-file system, which all the rest of the world has; allowing third parties to submit relevant prior art during patent prosecution; creating a patent quality-enhancing supplemental examination process; and instituting a post-grant review and an inter partes reexamination expansion. All of that is extremely important.

The bill provides fee-setting authority and addresses a long-felt need by the patent community and now by the majority of this body to end the practice--the obnoxious practice--of diverting fees from the U.S. Patent and Trademark Office. No wonder we have such a rough time getting things to work.

Finally, the legislation makes important clarifications to tax strategy patents and creates a pilot program to review already-issued business method patents.

This enumeration underscores a holistic approach that strikes the right balance. I hope everyone in this Chamber recognizes what we are accomplishing. We have come together in a bipartisan fashion to invigorate some of our country's greatest strengths--our ideas and our inventive spirit.

Let me conclude my remarks by commending Senate Judiciary Committee chairman Pat Leahy for his leadership and tenacity in moving this bill through the Senate. He deserves a lot of credit. His vision and tireless efforts have made today's vote a reality. Together, we have worked on patent reform legislation since 2006--and in reality, even earlier than that--passing the torch of leadership along the way. One time, I was chairman; he has been chairman. It is satisfying to see the time has finally come to pass this bill.

I would also like to acknowledge the hard work of our distinguished ranking member, Chuck Grassley. His unwavering support and commonsense approach have been invaluable in this process.

I wish to acknowledge the various staff members of Senator Leahy, my staff, and Senator Grassley's staff for the work they have done on this bill--very important. Likewise, contributions of the members of the Senate Judiciary Committee and other Members of this body have enriched our debate.

Finally, as I have said, I wish to thank our bill managers' staff for their sustained efforts throughout the process. Aaron Cooper, Bruce Cohen, Rita Lari Jochum, and Kolan Davis have been instrumental in getting us to this point. I also thank my own counsel, Matt Sandgren, who has done a terrific job on this bill for all these years we have been working on it, and Remy Yucel, my USPTO detailee, for her and Matt's commitment and perseverance over these many years. They have been a formidable team.

I also acknowledge the important work of Joe Matal, Sarah Beth Groshart, Tim Molino, and Curtis LeGeyt.

Madam President, passing the America Invents Act is the right thing to do, and I urge my colleagues to join in this monumental undertaking. It is the right thing to do, it will help our country, it is going to reestablish our patent laws in ways they should be, and it will stop the fee diversion that has been going on, assuming we can get help from the House as well, and I believe we will. It will be a bill that I think we will have to go to conference on and hopefully be able to perfect it even more. I am grateful for all who have been involved, and I hope and pray we can get this through both Houses of Congress and establish this monumental bill at a monumental time. It is very important in all our lives.

Madam President, I suggest the absence of a quorum.

Mr. President, our Nation's fiscal situation has reached a tipping point. The debt held by the public now exceeds $9 trillion. We are now in our third year of trillion dollar deficits. According to the Congressional Budget Office, by the end of 2011, our debt will be $10.4 trillion. This represents 69 percent of GDP, the highest level since 1950.

The picture only gets uglier if you take into account other factors. Our total public debt outstanding is over $14 trillion. Moreover, if you assume that certain things that always happen will continue to happen things like the AMT patch, tax relief for families and businesses, and a ``doc-fix'' our debt will soon be nearly 100 percent of GDP.

This is, quite simply, unsustainable. If we do not act now to get a handle on this spending, the nation that gave boundless opportunity to generations of Americans will not be there for our children and grandchildren. With interest payments on all this debt set to grow from $225 billion in 2011 to $792 billion in 2021, we are approaching a fiscal death spiral.

Congress could go a long way simply by reducing wasteful and redundant government spending. Last week, in response to a request from my colleague from Oklahoma, Dr. Coburn, the Government Accountability Office released a report identifying between $100 and $200 billion in wasteful spending on redundant government programs alone.

Dr. Coburn has been doing yeoman's work burrowing into the federal budget to find the sources of wasteful spending, but getting this report from GAO

is, in my view, his greatest achievement to date. He has given Congress a roadmap for cuts that really should be no-brainers.

But Congress' record on securing cuts is less than stellar. Ronald Reagan once said that nothing comes closer to eternal life than a government program. Congress' committee structure is set up to authorize and reauthorize new programs. It is set up to appropriate money for those programs.

But there are few institutionalized forums in Congress for spending restraint.

That is why I am introducing today, with my colleague from Colorado, Senator Mark Udall, a Senate Resolution that will create a Committee to Reduce Government Waste. After last week's GAO report, there is no longer any doubt that the Federal Government is deluged with wasteful, non-performing, and underperforming programs.

This committee would be required, every year, to identify wasteful government programs and recommend legislation to either cut them or reduce them in scope.

Most importantly, the consideration of this legislation would be expedited, subject to Section 310 of the Congressional Budget Act.

There is a precedent for a committee such as this one. In response to the rising costs of World War II, Senator Harry F. Byrd of Virginia proposed the establishment of a committee to cut wasteful programs instead of raising taxes. In just three years, the committee cut wasteful programs, resulting in more than $38 billion in today's dollars. Given the growth of government in the intervening 6 decades, I expect that our anti-appropriations committee will have an even easier time identifying wasteful spending and programs today.

This would be a truly bipartisan committee, with 4 members, 2 Republicans and 2 Democrats, from each of the Senate Finance, Budget, and Appropriations Committees.

Ultimately, getting our budget deficits and structural debt under control is going to take meaningful action from both sides of the aisle. This needs to be a bipartisan process, and I could not be more pleased that I am being joined in this effort by my Democratic colleague from Colorado, Senator Udall.

The American people have spoken loud and clear. Every day families make tough choices to balance their books, and they expect Congress to do the same. Dozens of groups, representing millions of American taxpayers, have come together to ask Congress to support a committee devoted to eliminating government waste.

I look forward to working with my colleagues on enacting this resolution. Senators hear every day from interest groups seeking more money from the Federal Government. They are well organized, well financed, and well versed in the ways of the Senate. The committee we are proposing will make sure that the citizens who have to foot the bill for all of this government spending will have a venue where their concerns take precedence.

Mr. President, I ask unanimous consent that the Senator from California be permitted to speak, and then I ask that the remaining time be granted to me.

Mr. President, I have been following the debate on the patent bill closely. I wish to again voice my strong support for passage of this very important legislation.

We have been working on this bill for a number of years and it is satisfying to finally see the full Senate consider it now. As I have said before, the patent reform bill is about moving our Nation toward the future. It will equip America's inventors with an improved patent system that will enable them to better compete in today's global economy. Toward that end, I would like to discuss some of the key provisions of this bill and what they will do to improve and modernize our patent system.

There are some misconceptions about the proposed first-inventor-to- file provision. Some have questioned why we cannot maintain the current first-to-invent system, in which priority is established by determining which applicant actually invented the claimed invention first. Under this system, if there is a dispute, it costs applicants an average of $500,000 in legal fees to prove they were the first-to-invent. This amount does not include extra expenses that can follow if the decision is appealed. Unfortunately, many small businesses and independent inventors do not have the resources to engage in the process we have now.

Conversely, moving to a first-inventor-to-file system would provide inventors a cost-effective and certain path to protect one's invention through the filing of a provisional application, at a much more reasonable cost of about $100.

The purpose of the proposed transition is certainly not to hurt small businesses or independent inventors. Quite the contrary. These innovators are too important to our Nation's economic health. But let's consider some facts: in the past 7 years, more than 3,000,000 applications have been filed, and only 25 patents were granted to small entities that were the second inventor to file, but later proved that they were first to invent. Of those 25, only one patent was granted to an individual inventor who was the second to file. Thus, in the last 7 years, only one inventor in over 3,000,000 patent filings would have gotten a different outcome if we, like the rest of world, used a first- inventor-to-file patent system. I assure you that I do not want to minimize the reluctance that some have with changing to this new system; however, the facts speak for themselves. Simply put, moving to a first-inventor-to-file system does not appear to have the level of risk some have feared.

Additionally, the American Bar Association's Section of Intellectual Property Law recently confirmed the importance of the proposed transition by stating:

For inventions made after 1996, the U.S. patent system has

been open to proofs of inventions made outside the United

States--creating for many U.S.-based inventors a new and

potentially even more expensive obstacle to obtaining a

patent under the current first-to-invent rule. Finally, U.S.

inventors more and more are facing the need to file patent

applications both at home and abroad to remain competitive in

our global economy. Requiring compliance with two

fundamentally different systems places undue additional

burdens on U.S. inventors and puts them at a competitive

disadvantage in this global economy.

Indeed, the transition to the first-inventor-to-file system is long overdue and will help our U.S. companies and inventors out-compete their global challengers.

The proposed legislation would also give the USPTO rulemaking authority to set or adjust its own fees, without requiring a statutory change every time an adjustment is needed. Providing the USPTO the ability to adjust its own fees will give the agency greater flexibility and control, which, in the long run, will benefit inventors and businesses.

Speaking of greater fiscal flexibility for the USPTO, let me take a moment to discuss the importance of ensuring full access to the fees the agency collects.

American inventors, who create jobs and keep our economic engine running, should not have to wait for years after they have paid their fees to have their patent applications processed. This is tantamount to a tax on innovation and it creates disincentives for inventors and entrepreneurs.

A fully funded USPTO, with fiscal flexibility, would--at the very least--mean more and better trained patent examiners, greater deployment of modern information technologies to address the agency's growing needs, and better access to complete libraries of prior art.

Over the years, fee diversion has forced a vicious cycle of abrupt starts and stops in the hiring, training, and retention of qualified office personnel. To make matters worse, under current conditions, outdated computer systems are not keeping pace with the volume of work before the agency. It is clear to most that the USPTO has yet to recover from the negative impact of diverting close to a billion dollars from its coffers, for its own use. That has not only been wrong, it is obscene.

I agree with what has been said that there cannot be true patent reform without full access to collected fees from the USPTO. We owe it to our inventor community to do this. We all have a vested interest in ensuring that our country's unique spirit of ingenuity and innovation continues to thrive and flourish. Last night, an overwhelming majority of the Senate voted to finally put an end to fee diversion from the USPTO. It was a historic moment, and I hope our House colleagues will maintain this momentum. I understand some people on the Appropriations Committee do not like it. They do not like it because they like to be able to play with that money. But it is disastrous to not have that money stay with the USPTO so we can move forward faster, better and get a lot more done and still be the leading innovative nation in the world.

The legislation also enables patentholders to request a supplemental examination of a patent if new information arises after the initial examination. By establishing this new process, the USPTO would be asked to consider, reconsider or correct information believed to be relevant to the patent. The request must be made before litigation commences. Therefore, supplemental examination cannot be used to remedy flaws first brought to light in the course of litigation, nor does it interfere with the court's ability to address inequitable conduct. That is an important point. Further, this provision does not limit the USPTO's authority to investigate misconduct or to sanction bad actors.

In a nutshell, the supplemental examination provision satisfies a long-felt need in the patent community to be able to identify whether a patent would be deemed flawed if it ever went to litigation and enables patentees to take corrective action. This process enhances the quality of patents, thereby promoting greater certainty for patentees and the public.

The America Invents Act also creates a mechanism for third parties to submit relevant information during the patent examination process. This provision would provide the USPTO with better information about the technology and claimed invention by leveraging the knowledge of the public. This will also help the agency increase the efficiency of examination and the quality of patents.

The pending legislation also provides a new postgrant review opposition proceeding to enable early challenges to the validity of patents. This new but time-limited postgrant review procedure will help to enhance patent quality and restore confidence in the presumption of validity that comes with issued patents.

Finally, this bipartisan patent bill provides many improvements to our patent system which include, among other provisions, just some of the following:

Changes to the best mode disclosure requirement, increased incentives for government laboratories to commercialize inventions, restrictions on false

marking claims, removal of restrictions on the residency of Federal circuit judges, clarification of tax strategy patents, providing assistance to small businesses through a patent ombudsman program, establishing additional USPTO satellite offices, and creation of a transitional postgrant proceeding specific to business method patents.

As we can see, this bipartisan bill represents significant changes to our patent laws. They will enable our great country to more effectively compete in the 21st century global economy. I encourage my colleagues to take action and vote in favor of this bill. We cannot afford to allow this opportunity to pass us by.

I yield the floor.

Mr. President, I have to object on behalf of the manager of the bill who is not here right now. If the Senator can at least wait until Senator Grassley returns to make his request.

I object right now, but as soon as Senator Grassley gets back----

No.

Mr. President, I thank the distinguished chairman of the Judiciary Committee. He has been one of the leaders the whole time I have been on that committee with regard to intellectual property issues. It has always been a pleasure to work with him and his staff. They are good people.

This is a particularly important bill. It is only the first step, once we bring it up and hopefully pass it, and then the House will bring up their bill. There are likely to be differences between the two, and we will have to get together in conference to resolve those differences. So those who might have some angst about this particular bill, give it time. We will be working diligently--the distinguished Senator from Vermont, myself, and others, including, of course, our ranking member, Senator Grassley--we will be working diligently to try and resolve these

problems and hopefully we will end up with a bill that everybody in this country should recognize as what needs to be done to keep us at the forefront of all technological innovation in this world.

I rise today to express my support for the pending patent reform legislation before us. As many know, several of my colleagues and I have been working together on this bill for several Congresses. I especially wish to recognize the ongoing efforts of our Judiciary Committee chairman, Pat Leahy. Over the years he and I have worked tirelessly to bring about long overdue reform to our Nation's patent system. I also wish to recognize the efforts of the Judiciary Committee ranking member, Chuck Grassley, as well as many of my Senate colleagues who have been instrumental in forging the compromise before us today which, in my opinion, is the first step in trying to arrive at a final consensus bill.

Similarly, no enumeration would be complete without recognizing the considerable work that has been done by our colleagues over in the House of Representatives. House Judiciary Committee chairman Lamar Smith has been a leader on patent reform legislation for many years. His vision, his expertise, and his leadership are highly respected and appreciated by me, by my colleagues as well, and by many throughout the patent community.

I also wish to specifically acknowledge the invaluable contributions of Representatives John Conyers, Howard Berman, Bob Goodlatte, Howard Coble, Darrell Issa, and Zoe Lofgren. They have all been very effective people with regard to these very important issues. They have been stalwarts in underscoring the vital need to reform our patent system. I look forward to seeing the results of their process and working with them to complete this important task.

Most of us are very familiar with the history of patent legislation, but it bears repeating that we have not had meaningful reform to our patent system in well over a half century--not any meaningful reform whatsoever, even though many things have changed during these intervening years--courts have instituted welcome changes to our patent system, a lot of technology has changed, and a lot of innovation has occurred.

I am not going to spend my time today on a history lesson. Instead, I urge everyone to consider not the past, but to look forward to the future, and that future begins with examining our present. The Nation's current economic situation requires that we take advantage of our ingenuity that has made America the economic envy of the world.

If enacted, the American Invents Act would move the United States to a first-inventor-to-file system, which will create a system that is more transparent, objective, and predictable for the patentee. In addition, transitioning to a first-to-inventor-to-file system will facilitate harmonization with other patent offices across the world and contribute to ongoing work-sharing processes.

The bill will also establish another means to administratively challenge the validity of a patent at the U.S. Patent and Trademark Office, USPTO--creating a cost-effective alternative to formal litigation, which will further enhance our patent system.

Patent owners will be able to improve the quality of their patents through a new supplemental examination process. The bill further prevents patents from being issued on claims for tax strategies and provides fee-setting authority for the USPTO Director to ensure the Office is properly funded.

This bipartisan bill also contains provisions on venue to curb forum shopping; changes to the best mode disclosure requirement; increased incentives for government laboratories to commercialize inventions; restrictions on false marking claims, and removes restrictions on the residency of Federal Circuit judges.

For me, it is pretty simple. Patent reform is more than words on paper. It is about jobs and the positive impact they have on our economy. Chairman Leahy understands this connection and has wisely named the bill the America Invents Act of 2011.

While we debate this important legislation, it is crucial that we keep the creation of jobs and economic prosperity at the forefront of our thoughts. After all, patents encourage technological advancement by providing incentives to invent, to invest in, and to disclose new technology. Now more than ever we must ensure efficiency and increased quality in the issuance of patents. This, in turn, will create an environment that fosters entrepreneurship and the creation of new jobs, thereby contributing to growth within all sectors of our economy.

If we think about it, one single deployed patent has a ripple effect that works like this: A properly examined patent, promptly issued by the USPTO, creates jobs--jobs that are dedicated to developing and producing new products and services. Unfortunately, the current USPTO backlog now exceeds 700,000 applicants. The sheer volume of the patent applications not only reflects the vibrant, innovative spirit that has made America a worldwide innovative leader in science, education, and technology, but the patent backlog also represents dynamic economic growth waiting to be unleashed. We cannot afford to go down this path any longer. We need to take advantage of this opportunity to expand our economy.

During consideration of the America Invents Act, I encourage my colleagues to be mindful that legislation is rarely without its imperfections, and we have a tremendous chance to take much needed action. To those who believe otherwise, rest assured my intent is to do no harm. But I want the legislative process to move forward. It is long overdue.

I urge my colleagues to participate in the debate and vote on the amendments they think will strengthen the bill. There are some proposals that I believe merit serious consideration by all of us. At the end of the day, the passage of this bill will update our patent system, help strengthen our economy, and provide a springboard for further improvements to our intellectual property laws.

I have every confidence that we can come together and act in a bipartisan manner. The stakes are simply too high for us not to seize this moment.

Mr. President, I yield the floor.

Mr. President, I ask unanimous consent that Remy Yucel, a detailee in my office from the U.S. Patent and Trademark Office; Ron Rowe, a detailee in my office from the U.S. Secret Service; Ryika Hooshangi, a foreign affairs detailee in my office from the Department of State; LTC Jason Bartolomei, a military fellow in my office from the U.S. Air Force; Paul Williams, a detailee in my office from the Food and Drug Administration; Maureen McLaughlin, a detailee to the Senate Finance Committee from the Federal Communications Commission; and Jesse Baker, a detailee to the Senate Finance Committee from the U.S. Secret Service all be granted the privilege of the floor for the remainder of the first session of the 112th Congress.

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

Mr. President, this week the Senate began a debate about nothing less than the future of this country. Next year we face a $1.65 trillion deficit, the third year in a row where the United States will run a deficit of over a trillion dollars. Even more daunting, we are over $14 trillion in total debt.

According to the non-partisan Congressional Budget Office, or CBO, the debt held by the public is projected to reach $18.3 trillion--or 77 percent of GDP--by the end of 2021. This is a problem that truly threatens the well-being of this Nation.

CBO projects that the cost of simply paying the interest on all of this debt will rise to $792 billion--or 3.3 percent of GDP--in 2021. When you are pushing $1 trillion a year in interest payments alone, you are reaching a day when the national government will not have the resources to accomplish even the limited mission delegated to it by the Constitution This is what ADM Mike Mullen, the Chairman of the Joint Chiefs of Staff, meant when he testified today that ``our debt is the greatest threat to national security.''

The President could have led on this issue, when he released his budget earlier this week. But he took a pass instead. Apparently he and his Democratic congressional allies have done some polling that tells them two things.

First, the American people are demanding that Washington tackle our annual deficits and skyrocketing debt.

And second, Democrats can benefit politically by standing aside, letting Republicans propose solutions to this problem, and then demagoguing the daylights out of any effort to restrain spending.

The coming debate is going to be a bruising one. But as we go forward, it is critical that we keep one thing in mind. We cannot get out of this hole by taking more of taxpayers' hard-earned money. Our debt and deficit problems exist because Washington spends too much, not because taxes are too low. It is a terrible idea to propose raising taxes by over $1.6 trillion on net over the next 10 years alone. Yet, that is exactly what the Obama administration's budget, released earlier this week, proposes.

I said it earlier this week, and I will say it again. This budget proves once and for all that our deficits and debt are not caused by our taxes being too low.

The President has proposed a net tax increase of over $1.6 trillion. Yet for next year--and every year--of his 10-year budget, he runs a deficit. At their best, the annual deficits dip to roughly $600 billion. Even after these astronomical tax increases, the President is still unable to balance the budget. And there are not many more easy targets for Democrats to tax.

In 2012, in a foolish attempt at class warfare, Democrats are prepared to let the tax rates expire with far reaching consequences for the small business owners who account for half of all small business flow-through income. Those small business owners would see their marginal rates hiked by 17 percent to 24 percent under this budget. In Obamacare they taxed medical devices, insurance plans, prescription drugs, small businesses, and individual Americans. The result--a surprise only to the most hardened ideologues--is the loss of 800,000 jobs according to the Congressional Budget Office. And yet they still can't balance the budget. So who else do they propose to tax?

The bottom line is that there isn't anyone left to tax, unless the President and his Democratic allies are willing to crush the middle class with additional tax burdens. There is only one way out. We need to restrain spending. As the chairman of the House Budget Committee, Congressman Paul Ryan, explained, we need to get spending in line with revenue, not the other way around. The analyses of the Congressional Budget Office, or CBO, confirm this.

The CBO is the nonpartisan official scorekeeper for Congress. According to its January 2011 Budget and Economic Outlook, from 1971 to 2010, taxes have averaged 18 percent of gross domestic product, or GDP. So in recent history, we have had an average level of taxation of 18 percent of GDP.

Take a look at this chart that was made using CBO's January 2011 document. CBO explains that if no changes in law are made, taxes will go up to 20.8 percent of GDP by 2021, and will average 19.9 percent from 2012 to 2021. Taxes at 20.8 percent of GDP would represent a tax increase of 16 percent from their recent historical average.

CBO also states that if most of the provisions from the December 2010 tax act were made permanent, then ``annual revenues would average about 18 percent of GDP through 2021--which is equal to their 40-year average.'' So, according to CBO, even if all the Bush-era tax rates were permanently extended, taxes would still be high enough when measured against the level of taxation in recent history.

So, if taxes are high enough already, should we raise them anyway? I will go ahead and answer my own rhetorical question. Of course we shouldn't raise taxes any higher.

On August 14, 2008, Jason Furman and Austan Goolsbee wrote a Wall Street Journal editorial. In that editorial, Furman and Goolsbee stated that Candidate Obama's tax plan would reduce ``revenues to less than 18.2% of GDP--the level of taxes that prevailed under President Reagan.'' Today, Austan Goolsbee is the Chairman of the Obama administration's Council of Economic Advisers and Jason Furman is the Deputy Director of the Obama administration's National Economic Council. The President must have missed their editorial, because his recently released budget ignores the campaign promises of these top officials, and raises taxes well above their historical levels. As one writer has put it, all of the President's campaign promises seem to come with an expiration date.

As this debate over the debt and deficits rages on, pay close attention to the words that Republicans and Democrats use. You will hear Republicans say that we need spending restraint. By contrast, you will hear Democrats say that we need to deal with the deficit.

Let's be clear. Dealing with the deficit is code for raising taxes. Liberal pundit after liberal pundit will pronounce confidently that you can't deal with the deficit solely with spending restraint. Yet they won't say why, and they won't explain how you can deal with the deficit and debt through tax increases. That is because they can't. If they came clean with the American people, they would have to admit that their intention is to raise taxes on everyone and everything.

As I have already shown, taxes are high enough already, and we should not be raising them even higher.

Yet the bottom line is that rather than dealing seriously with out- of-control spending, tax-and-spend Democrats want to raise taxes to pay for more out-of-control spending. And guess what: If we raised taxes to eliminate the deficit, the current levels of spending would just cause a new deficit to arise.

I have a chart here that demonstrates just how futile it is to raise the top tax rate if the goal is to raise more money. When the top tax rate has been raised over the years, taxes as a percentage of GDP still hovered around their historical average of 18 percent. This held true even when the top tax rate was raised to a confiscatory level of over 90 percent.

The conventional wisdom on the other side of the aisle is that we can simply raise more tax revenue by increasing tax rates. However, the history is pretty clear. This strategy simply does not work. Just take another look at this chart if you don't believe me. Instead of raising tax rates, what we need to do is implement a pro-growth tax policy. That starts with not raising taxes.

For 2 years, we were able to fight off tax increases on small businesses proposed by President Obama and congressional Democratic leadership. However, I have another chart here that shows the relationship between the annual growth of Federal revenues and GDP. As you can see from this chart, when GDP increases, Federal revenues increase. Similarly, when GDP decreases, Federal revenues decrease. This should not be a shocking revelation.

When the economy is growing, the government collects more money in tax revenues because there is more taxable income being earned. The key is to have commonsense, pro-growth tax and regulatory policies. And as I mentioned before, a pro-growth agenda starts with refusing to raise taxes. Part of the difference between Republicans and Democrats on whether to increase taxes comes from different ways of looking at the world. Conservative Republicans look at the money earned by the American people and understand that it belongs to the people. As free men and women, America's citizens have a right to the fruit of their own labors. Americans work too hard--they sacrifice too much--for Washington to blithely raise their taxes to pay for an ever expanding Federal Government.

Yet liberal Democrats have a different view. Listening to President Obama and many congressional Democrats, it is clear that they view the money earned by the American people as the Federal Government's money first. It is only by the grace of the Federal bureaucracy that citizens are given an allowance to live on. This is a huge difference. You hear it when liberals talk about the cost of tax cuts. The cost of tax cuts? Cost to whom? When Democrats talk like this, they are effectively saying that anything you earn is the government's to spend. And it is a cost to the government when they decide to let you keep your money. For most Americans, this is an odd way of looking at the world.

Government costs money when it spends trillions of dollars on who- knows-what. The taxpayer does not cost the government money when he keeps what he earns. Yet this liberal worldview was on clear display in the recent debate about whether to extend the 2001 and 2003 tax bills.

President Obama and many congressional Democrats said that we shouldn't be giving tax breaks to certain taxpayers. Since when did keeping your own hard-earned money constitute the government giving you anything? That is not how the American people view it. And it is not how I view it.

President Obama and many congressional Democrats viewed a failure to increase taxes as a giveaway to taxpayers that increased the deficit. Republicans view the job-killing tax increase with nearly 10 percent unemployment as a terrible idea. The way to deal with the deficit is not to raise taxes. The way to deal with the deficit is to live within our means, as families and individuals do across America. The Federal Government should only spend what it takes in.

The President and his allies like to say they inherited these deficits. That is only a half truth. They inherited some debt and deficits. But they have helped create much more. For example, nearly $1 trillion was added to our debt by President Obama's partisan stimulus bill. That bill was loaded with pent-up Democratic agenda items and was sold with the promise that it would keep unemployment below 8 percent. We all know that by the President's own standard the stimulus bill has failed miserably. Unemployment has been at or above 9 percent for the last 21 months. That stimulus debt was not inherited by President Obama, it was created by President Obama, and he is bequeathing it to all of our children and grandchildren.

The numbers do not lie. When Democrats took over Washington, it was like setting Homer Simpson loose at an all-you-can-eat buffet. For too long, the desire of unions and government workers and special interest groups to create new programs and grow the size of government had gone unfulfilled, and when they finally seized the reins of power in 2008, liberal Democrats went hog wild. Our Nation's deficit has gone from $161 billion in 2007, when Democrats took over control of Congress-- remember, they had 2 years before President Obama even got elected. The Democrats were in control of Congress. It went from $161 billion in 2007 to $1.65 trillion in 2011.

With respect to the debt, when congressional Democrats took over control of Congress in 2007, the debt was $8.68 trillion. It is now over $14 trillion. So when Democrats are talking about what a bad situation they inherited, let's remember that these folks have been in charge of Congress for the last 4 years. They acted as though the bills on their spending would never come due. And like a college student who maxed out his parent's credit card, Democrats are now looking for someone to bail them out.

Unfortunately, they are looking to the American taxpayers to foot the bill. This cannot happen. The American taxpayer is already overburdened. Citizens are not going to stand for tax hikes when spending restraint is called for. The bottom line is simple. We cannot tax our way out of this problem. I personally will resist any effort to do so.

That is one of the reasons why I am for a balanced budget constitutional amendment. I have found Congress is incapable, fiscally incapable, of getting this mess under control. It is hard to believe we are that incapable, but we are. So we need to put some restraints on Congress, and the best way to do that, in my opinion, is a balanced budget amendment. I think that would be the best way.

There are some who are looking at putting caps on spending, and that sounds good, except for one thing. If you break the caps, you have got to increase taxes. I think we would find ourselves increasing taxes all the time around here, and that is a big mistake as far as I am concerned. So I am very strongly for the balanced budget constitutional amendment. I believe with the mess we are in, good people on both sides of the aisle ought to be interested as well.

The last time I brought up the balanced budget amendment, we had 66 votes for it in the Senate. It passed the House overwhelmingly. If we had had one more vote back in 1997 we would have had a different situation today, because the balanced budget constitutional amendment would have passed, and I believe 38 States would have ratified it in a very quick fashion, certainly within a year or so.

Had that happened, we would not be in the mess we are in today. We are in a terrible mess. One of the reasons is Congress cannot get its fiscal house in order, and the reason it cannot is because of what I have been talking about. I think it is going to take restraints that the balanced budget amendment would bring to force Congress to have to live within its means or at least vote to break the budget.

Most people who spend do not want that provision, because they know when they vote to break the budget, their constituents are going to see that and they may not be here the next election. So as much as I would prefer to not have any artificial approach, I have come to the conclusion that Congress plain cannot handle its own problems. It does not have the fiscal restraint to do it.

A balanced budget amendment would be a constitutional amendment, locked into our beloved Constitution. It would, like all of the States in this country, except Vermont, require us to balance the budget or at least show a reason why not and to vote so that we have to vote on why not.

Germany has a balanced budget amendment. They meet those restraints. Switzerland has a balanced budget amendment. They meet those restraints. If they can do it, why can't we? I think we have got to get real around here and start doing some things that will help save the country, rather than push it right into bankruptcy.

We spend too much. Congress and the President pushed Build America Bonds. Why do you think they did that? The government is going to pay-- it has been paying 35 percent on those bonds. Guess who pays that 35 percent. All of the States that have lived with fiscal restraint will be paying for the profligacy of States that do not live with fiscal restraint. That is not the way to go. It is not fair to the States that are careful with their money. We know which States they are. In almost every case, they are States that are dominated by my friends on the other side. The fact is, I am totally opposed to this proposal.

In this budget, the President wants to make these bonds permanent, while bringing down the 35 percent government match to 28 percent. But think about that. That is still 28 percent from American taxpayers, most of whom have lived with fiscal restraint in their respective States, to help States that have not and that probably will not behave responsibly. As long as they can get free money from the government, why not, in their eyes?

Some of these states are in such dire straits that even some of these Governors who have been big raging liberals in the past are starting to say, we have got to do something about it. I want to pay particular praise to them. I hope they will get spending under control, because their lack of fiscal restraint and our lack of fiscal restraint here is hurting our country.

I suggest the absence of a quorum.

The PRESIDING OFFICER (Mrs. McCaskill.) The clerk will call the roll.

The assistant bill clerk proceeded to call the roll.

Mr. President, religious freedom is the first subject addressed in the First Amendment to the United States Constitution. In a pair of clauses that too often are divorced from each other, the Constitution prohibits Congress from making laws respecting an establishment of religion or prohibiting the free exercise of religion. Religious freedom has been a passion of mine throughout my service in the Senate and I intend to address this critical subject in a variety of ways during the 112th Congress. Today, I want to offer for my colleagues' consideration an important speech on religious freedom delivered two weeks ago at the Chapman University School of Law by Elder Dallin Oaks.

Elder Oaks serves in the Quorum of the Twelve Apostles of the Church of Jesus Christ of Latter-Day Saints. He received his law degree from the University of Chicago, where he was Editor-in-Chief of the Chicago Law Review and where he would later teach after clerking for Supreme Court Chief Justice Earl Warren. He also served as President of Brigham Young University, Chairman of the Public Broadcasting Service, and as a Justice on the

Utah Supreme Court. Elder Oaks is one of the pre-eminent legal scholars of our time, and a man deeply schooled in the Constitution who dearly loves our country.

As Elder Oaks makes clear at the outset, this speech is not about particular religious doctrine but about religious freedom. In fact, he says that his intent is ``to contend for religious freedom.'' Contending for something is much more than simply talking about it, explaining it, or even advocating it. To contend for religious freedom is to strive earnestly for it, to struggle for it, even in the face of opposition. Religious freedom is that important.

So I ask unanimous consent to have this speech printed in the Record and ask my colleagues to read and consider it. The full printed version of this speech contains extensive footnotes which have been deleted here for ease of publication in the Record. But I note for my colleagues that the full text and notes may be found at the following Internet address: http://newsroom.lds.org/article/apostle-emphasizes- the-importance-of-religious-freedom-to-society.

Mr. President, on February 11, 2011, the people of Utah received of some very bad news. On that day, Jerry Sloan announced that he was resigning his position as head coach of the Utah Jazz. Jerry is one of the most respected figures in all of sports, a Hall of Famer, and, for the people of Utah, an irreplaceable icon. He will most certainly be missed.

Coach Sloan was born and raised in rural Illinois. He played college ball at the University of Evansville. And, although he began his career in the NBA with the Baltimore Bullets, he will always be remembered for his years with the Chicago Bulls. Few probably remember that Jerry was, in fact, the first member of the Bulls' team, having been selected in the expansion draft prior to the team's first season in the NBA. Throughout his playing career, he was known as ``The Original Bull.''

As a player, Sloan was known for his tenacity on defense, his unmatched toughness, and his no-nonsense nature. Over the course of his career with the Bulls, he played in two All-Star Games, was named to the NBA All-Defensive First Team four times and the All-Defensive Second Team twice. After his retirement, the Bulls retired Sloan's jersey, the first jersey retirement in the history of the franchise.

After his playing days were over, Jerry joined the Bull's coaching staff, starting out as a scout, eventually working his way up to head coach, a position he held for three seasons. He joined the Jazz coaching staff a few years later as an assistant coach. In 1988, Jerry was named head coach of the Jazz, and he stayed in that position up until last week.

Jerry Sloan was the coach of the Jazz for 23 years. That is simply remarkable, not only in the modern NBA era but in the history of professional basketball. The NBA has seen a number of great coaches in its history, but none have coached the same team as long as Jerry Sloan coached the Jazz.

Coach Sloan's success is even more remarkable than his longevity. In the 23 seasons Jerry coached, the Jazz finished with a losing record only one time. The team was in the playoffs in all but three of those seasons, and they reached the NBA Finals twice, in 1997 and 1998. Jerry finished his career third on alltime wins list. He holds the record for most wins with a single team. No other NBA coach in history has even approached 1,000 wins with one team. Jerry won 1,127 as coach of the Jazz.

However, while Jerry has amassed an impressive pile of statistics, that is not what he will be remembered for. For fans of the Jazz and, indeed, for basketball fans everywhere, Jerry Sloan was the personification of old-fashioned values. As a longtime fan of the Jazz, I have always reveled in the fact that my favorite team has continuously been praised for its efficiency, discipline, and fundamentals. These have been the hallmarks of Utah Jazz basketball, and that is a direct reflection of Jerry Sloan. In an industry filled with agents, bright lights, and endless promotion, Jerry Sloan's Jazz were living proof that hard work and professionalism could trump market size and national popularity. In many ways, I think Utahns see the Jazz as a reflection of their own values and aspirations, and that is due, in large part, to the character of Coach Sloan.

Jerry was never one to seek after accolades or personal attention during his career. For him, basketball was a job, and he was a consummate professional. He was brutally honest when

necessary and took responsibility when things didn't go the team's way. No one ever heard an excuse from Jerry Sloan.

Mr. President, I have known Jerry Sloan for a number of years. Quite simply, he is a class act. I think you have to spend some time in Utah to know just what Jerry Sloan has meant to our community. I want thank Jerry for all he has done for the State of Utah, and I wish him and his family the best of luck in all their future endeavors.

Mr. President, today, the President released his budget for fiscal year 2012. If this is his idea of a Valentine's gift to America and to the American people, he has an odd way of showing his affection. It is the equivalent of taking your fiancee to dinner, asking her to marry you, and then leaving her to take care of the check, your maxed out credit cards, your underwater mortgage, and the bill for the ring.

This budget is, quite simply, an abdication of adult responsibility, and it is a particular abdication of the responsibility of the President of the United States, who takes an oath to protect and defend our Constitution. Our economy is dealing with the hangover from the 2008 economic collapse, the greatest fiscal crisis I have seen and that we have seen in several generations. Our recovery has been sluggish, and it is not being helped by this administration's regulatory overload and ObamaCare, which is set to kill 800,000 jobs.

We can already see a still larger crisis approaching. This is nothing short of an existential challenge. Continued deficits and accumulated debt are a genuine threat to individual liberty, continued prosperity, and national security. Absent immediate action--and let me stress this needs to be immediate action--we face a future where our union is not more perfect and where government will stand in the way of enterprising businesses and citizens whose only wish is the opportunity to thrive. Yet the President's response to this impending disaster is to vote present. His response is to pass the buck.

With due respect, the budget released today is a sorry joke. I would hate to be the White House staffers forced to spin this budget as a step in the right direction. The United States is demanding a ``Churchill'' on the issue of deficits and debt, but the administration has delivered us a ``Chamberlain.''

Let me break this down. The administration is going to reduce the deficit by $1.1 trillion over 10 years. That sounds like a mighty big number, and I am sure the White House has some consultants who have told them the American people can be duped into thinking this represents meaningful deficit reduction or change. Let me be clear. This is not meaningful deficit reduction. The administration wants to reduce the deficit by $1.1 trillion over 10 years. What does the administration project the deficit to be for this fiscal year--$1.65 trillion. At 10.9 percent of the gross domestic product, this is the largest deficit as a share of the economy since World War II. Unbelievable.

But it is consistent with the way Democrats have behaved since taking over Washington. In 2010, the deficit was $1.3 trillion and in 2009 $1.4 trillion. So let us put this in perspective. The administration is out there touting today its fiscal responsibility. Yet its 10-year total deficit reduction is smaller than this year's deficit.

The President's much touted 5-year freeze on discretionary spending, which will save $400 billion, is smaller than the Congressional Budget Office's recent upward revision of the 2011 deficit. Spinning this budget as the fiscally responsible thing to do betrays a profound lack of respect for the intelligence of the American citizens.

This budget contains $53 billion for construction of high-speed rail in Florida, California, and several other States. If there is a bigger government boondoggle out there, I am not aware of it. But the Vice President, in promoting this spending spree, tells Americans they need to get a grip. With due respect, the American people's grip on the situation is fine. They understand something that apparently has eluded the best and brightest over on Pennsylvania Avenue--we are out of money.

The well that has been financing the New Deal, and the New Frontier, and the Great Society, and the stimulus, and ObamaCare has finally run dry. It is past time that we stop playing politics with the deficit and debt and make the tough choices necessary to put America's finances back on solid ground. Yet there is no effort in this budget to take care of our long-term fiscal problems--none at all.

Not even the Washington Post is able to spin this one. This is a $3.7 trillion budget. What is the future of our deficit and debt? This is what the Post had to say. After next year, the deficit will begin to fall, ``settling around $600 billion a year through 2018, when it would once again begin to climb as a growing number of retirees tapped into Social Security and Medicare.''

The new normal under this budget is one of permanent budget deficits, long after President Obama has returned to private life. He will be out working on his Presidential library while Americans are left holding the bag for his big spending policies. He may not want to admit it, but the most fitting volume for his Presidential library might be ``The Road to Serfdom.''

How exactly does the administration propose to pay for Social Security and Medicare and national defense under this budget? The bottom line: It doesn't. This budget amounts to gross negligence. Even the progressive blogger, Ezra Klein, concludes that when reading this budget, it is almost like the fiscal commission never happened.

Remember that? The President's fiscal commission? It issued a report recommending over $4 trillion in cuts, including adjustments to entitlements. It offered controversial but appropriately bold proposals to get our Nation back on track. The President and his team looked at those proposals and bravely decided to leave this problem to the next administration and future generations.

Clearly, I am not a fan. But there is one useful item to consider in this budget. It is what progressives might call a teachable moment.

To achieve these paltry deficit reduction numbers, the administration had to resort to massive tax increases.

As the Post concludes, the tax hikes in this bill will be around $1.6 trillion over 10 years.

Here is the point that people need to be reminded of.

Even with possibly more than $1.6 trillion in job killing tax increases in this budget, it still comes nowhere close to reining in our deficits and debt.

For years we have heard Democrats say that if the rich people and businesses paid their fair share in taxes, we could balance the budget and reduce the debt.

Well, they sure tested it out in this budget.

They soak the so-called rich and American business with a fire hose, and yet we are still facing trillions in debt and hundreds of billions in deficits.

After the much maligned Bush tax cuts expire and undermine small business job creation, according to the President's own numbers we will still have to borrow an additional $7.2 trillion through 2021 to pay the bills that are coming due from the Obama administration's spending policies.

This budget should be a turning point in our debate about deficit and debt reduction.

Tax increases simply cannot get us there.

Unfortunately, the message that tax increases lead to deficit reduction is the Democrats' good word.

Over the past decade, I have participated in many discussions about spending and tax policy.

As my colleague from Iowa, Senator Grassley, has noted, Democrats basically have two talking points.

First, all of the good fiscal history of the 1990s was derived from the partisan tax increase bill of 1993.

And second, all of the bad fiscal history taking place within the past 10 years is owing to the bipartisan tax relief plans originally enacted during the last administration and continued under the present administration.

The Democrats' platform does have the virtue of simplicity: higher taxes--good; lower taxes--bad.

This record needs to be corrected. Regular viewers of C-SPAN 2 have probably heard others on my side do so before.

But it bears repeating, particularly in light of today's budget, that higher taxes will not right our fiscal ship.

The myth that higher taxes lead to lower deficits is a persistent one.

This is the mainstream account of the Clinton tax hikes.

According to this theory, the positive fiscal history of the 1990s resulted from the 1993 tax increases.

It is a simple enough argument.

According to the other side, by raising taxes and taking more money out of the economy, the government successfully reduced the deficit.

Yet, as you can see from this chart, the Clinton administration's own Office of Management and Budget concluded that the 1993 tax increase accounted for only 13 percent of deficit reduction between 1990 and 2000.

As a percentage of deficit reduction, the 1993 tax increase ranks behind other factors such as defense cuts--and interest savings.

The message here is simple.

Tax increases did not drive deficit reduction.

It may seem counterintuitive, but raising taxes does not necessarily mean that revenues collected by the government, as a percentage of GDP, will increase.

Consider this chart, which compares changes in Federal revenues as a percentage of GDP for two key 4-year periods. Each of these 4-year periods was preceded by a major tax policy change.

The first 4-year period occurred after the 1993 tax increase was enacted.

The second 4-year period occurred after the Jobs and Growth Tax Relief Reconciliation Act of 2003 was enacted.

The Jobs and Growth Reconciliation Act was the second of the major tax relief bills enacted during the last administration. It featured reductions on tax rates of capital gains and dividends.

Let's take a look at the first of those 4-year periods in each case.

One year after the 1993 hike, we do see increased revenues.

One year after the 2003 tax cut, revenues drop.

But take a look at the second through fourth years following the adoption of each bill.

You will see that the trend of the first year reverses itself in the second year after the tax hike.

As the policies in both bills had time to take effect, the revenue patterns are clear. The positive change in revenue was generally greater after the tax cut bill than it was after the tax increase bill.

There is no doubt that our deficits are a serious issue. They threaten the future of our Nation. It is irresponsible, however, to say that our dire fiscal situation is the result of the government not extracting enough money from the people who actually earn it.

The President's budget, with its massive new tax increases and permanent deficits, demonstrates yet again that our problem is spending.

Our budget deficits are being driven by spending.

Spending has not grown arithmetically.

Spending has not grown geometrically.

Spending has grown exponentially.

Over the past few years, while Democrats exercised complete control over Washington, non-defense discretionary spending has grown by 24 percent. As I have said before, that figure does not even include the bloated stimulus bill, enacted in early 2009.

Yet these deficits continue to grow in spite of increased revenues.

On January 26, CBO published its Budget and Economic Outlook for Fiscal Years 2011 through 2021. I am going to quote from that report. By CB0's estimates, Federal revenues in 2011 will be $123 billion--or 6 percent--more than total revenues recorded two years ago, in 2009.

This increase in Federal revenues for 2011 includes the net effect from a 1-year across-the-board reduction in payroll taxes.

The important fact here is that revenues have increased over the past 2 years, and the deficit has still increased. Our deficit and debt problems are not being driven by tax relief.

Despite this evidence, many of my friends on the other side still see raising taxes as the best and only solution.

They want to fund out-of-control spending by taking even more money from the people who actually earn it.

Proponents of this approach know that the confiscation of what has been lawfully earned can be a hard sell.

That is the reason they resort to clever rhetoric, telling us that paying taxes is inherently patriotic.

Or we hear talking points about some people not paying their fair share.

These sound bites might sound good to the base, but they are not grounded in reality.

CBO has published a booklet entitled ``The Long-Term Budget Outlook.'' In

its most recent version CBO confirmed that Federal revenues have fluctuated between 15 percent and 21 percent of GDP over the past 40 years, averaging about 18 percent.

Because of the recession, revenues dipped to around 15 percent recently. But that should not deceive us into thinking taxes are abnormally low. Using current-law assumptions, CBO projected revenues to reach 23 percent of GDP by 2035.

Arguably, those current-law assumptions are unrealistic, since they assumed the bipartisan tax relief enacted in 2001 and 2003 would expire along with relief from the alternative minimum tax, at the end of last year.

Yet CBO evaluated an alternative, more realistic, fiscal scenario. In that scenario, CBO assumed that most of the tax relief enacted in 2001 and 2003 would be extended through 2020. It still assumed that tax relief would expire for so-called high-income taxpayers. But CBO did anticipate that AMT relief would continue, along with other deviations from current law.

Even using this alternative fiscal scenario, CBO found that revenues as a percentage of GDP would increase to just over 19 percent in 2020 and stay at that level for several years.

That is to say, in this scenario, the level of taxation would still be above the 40-year historical average of about 18 percent of GDP.

I want to briefly return to the January CBO analysis that I referred to earlier.

That analysis, which assumes that most of the components of the tax package enacted at the end of 2010 will continue to be extended, along with the modified estate and gift provisions also in that same legislation, calculates that annual government revenues will steadily increase going forward, but will still average about 18 percent of GDP through 2021.

I have spent the past few minutes discussing CBO projections of various policy scenarios.

I am sure this presentation has made for some very gripping television.

But the point I am trying to convey is a critical one.

The fiscal reality is that taxes are not abnormally low.

Continuing current tax policy yields Federal revenues at about the historical average of GDP for the past 40 years.

Increasing taxes on anyone, even so called high-earners, will push government revenues above the 40 years' historical average, as a percentage of GDP.

I know there are many who would still support raising taxes above this historical level.

The President made clear today that he certainly does.

But it is important to heed the words of the CBO before we raise taxes.

In its Long-Term Budget Outlook, CBO had this to say about a scenario where the bipartisan tax relief of 2001 and 2003 expired, along with AMT relief.

According to CBO:

Marginal tax rates on income from labor and capital would

rise considerably under the extended-baseline scenario. The

increase in the marginal tax rate on labor would reduce

people's incentive to work, and the increase in the marginal

tax rate on capital would reduce their incentive to save.

The basic point I am making is that tax hikes are not like finding a pot of gold at the end of a rainbow. That money comes from somewhere, and there will be consequences to redistributing it.

Moreover, as we saw in the budget released today, even spiking taxes by over $1.6 trillion will not help us to balance our books.

Abnormally high spending drove the deficits of the past. It is driving the deficits of today. And it will drive the deficits of the future.

Some folks, in response to the question of whether the President is triangulating after the drubbing Democrats took in November, have answered no. He's just being himself.

You can say that again. He supported big government as a community organizer. He supported it as a Senator, on this floor and in committees.

He supported it as a presidential candidate, and he supports it today.

But the stakes are higher now.

He is the Nation's chief executive, and ultimately the President is responsible for guiding our Nation through the treacherous waters of an impending fiscal crisis. These are not easy shoals to navigate yet the statesman cannot shirk his duty.

As Senator Henry Clay once put it, ``I would rather be right than be President.''

Some things are bigger than the next election, and getting our deficits under control is one of those things.

The American people know that President Obama's budget is not right.

The present administration is spending almost 25 percent of our GDP, historically high except during and shortly after World War II. The last time we had that kind of expenditure was in 1950. That is why I am so strongly for a balanced budget constitutional amendment. I wish we did not have to go to that, but I don't see any other way we will get spending under control because I think Congress has been institutionally incapable of bringing down spending.

One reason is that with the help of the mainstream media, Members of Congress actually believe they will be kept in office by spending, and up to now that has been pretty true. But the American people are starting to wake up, they are starting to realize that, as sincere as my colleagues are on the other side, their economic policies are corrupt--maybe ``corrupt'' is too strong word, but it is wrong, definitely wrong.

We know the American people are not going to stop demanding real leadership on this issue. I feel badly because I know I personally like the President. There is no question about it. I showed him great friendship when he was here. I have shown him friendship since he was elected.

We all know that in order to resolve these problems we have to get entitlements under control. As good as some here in Congress are, we can't do it without Presidential leadership. We just can't.

I have a suggestion for the President. He would go down in history as one of the truly great Presidents if he would work with us, work together, bringing bipartisan people together and work to resolve these conflicts. You cannot do it with just 15 percent of the budget and you cannot do it with just tax increases. You cannot do it with an ever- expanding Federal Government. You cannot do it with an ever-expanding set of Federal employees. You cannot do it with ever-expanding regulations--although some of them are important. All of these things may be important, but you can't do it with those concepts. The only way you can do it is to get in and take the whole budget and work with both sides and see what we can do to bring people together and see if we have the courage to resolve these problems, not only for today but for our kids and grandkids, and, in my case, great-grandkids as well, hereafter.

I don't want the President to fail, but I have to point these things out. Let's face it, he is getting some very poor advice. Even when he wants to come to the center he gets rapped hard on the knuckles by the far left of his party, most of whom are far left, as least those here on the floor.

There are very few moderates on the Democratic side. I found most of the people who are moderates are moderate when their vote doesn't count. I think if you go back and look at the record you will find that to be true. The vast majority of our friends on the other side believe we should keep spending, keep taxing, and that will keep them in power. But all the power in the world doesn't count if we are wrecking the greatest country in the world.

I think our side has to wake up a little bit, too. We can't just do it with tax cuts either. On the other hand, I would rather have tax cuts that spur on the economy and create small business jobs than continue to spend us into oblivion.

Nevertheless, we are all going to have to work together if we are ever to get this problem solved. The only way I know to solve it is through Presidential leadership combined with courage on the part of Members of Congress.

But what they are pursuing with this budget is pathetic. There are so many budgetary gimmicks in this bill that it is plain pathetic. I will repeat what I said earlier; that is, the little over a trillion dollars, $1.1 trillion, in deficit reduction this budget will achieve over 10 years is barely $100 billion a year.

The total proposed deficit reduction is not even as much as our deficit for this year alone. During those 10 years, there will be hundreds of billions, if not trillions, of dollars of additional deficits until we reach a point, in about 2022, where we will be around $22 trillion in debt.

I do not know about you, Mr. President, or anybody else in this Chamber, but I think it is time for us to start standing up. I think it is time for the President to lead. I think the Democrats who have control of the bureaucracy ought to start working with us on to get that bureaucracy trimmed down. Let's consider the one aspect of constitutional politics that has worked; that is, allowing 50 States to participate, and through 50 State laboratories we can pick and choose the things that work best. Had we done that with health care, we would not be in the mess health care is today, and the oblivion it is headed for.

We cannot fix this deficit problem with tax increases. Frankly, my experience has been that tax increases do not work. What does work is giving the small business sector incentives, real incentives, not ``investments'' but real incentives to keep creating the 70 percent of jobs that only the small business sector can do.

If we increase those taxes, we are going to be in a mess. I can tell you, the budgeteers at OMB and CBO, as sincere and dedicated as they may be--I like Mr. Lew very much, and I think Mr. Elmendorf is a very fine budgeteer and economist--are always low in their estimates of deficits. It could be much worse than what we know right now. I hope we will have the guts, I hope the President will have the guts to lead, and I hope we would have the guts to follow that lead, and hopefully turn this ship of state around.

I yield the floor.

Mr. President, I rise today to reintroduce the Strengthening Our Commitment to Legal Immigration and America's Security Act. There is little doubt that our immigration system is broken and needs reform. Yet, we can make progress by starting with the laws that already exist. The proposed legislation would enhance our core immigration and enforcement laws for both legal and illegal immigrants.

When I first introduced my bill last September, I mentioned that it represents countless hours of conversation and feedback from my constituents. This bill is a common-sense approach on how best to enforce and tighten-up our immigration laws.

Of course, securing the actual physical border should remain our top priority. However, we cannot ignore the residual problems caused by a porous border. The weakness of a porous border has been experienced by communities across the country--draining all facets of local resources, including public safety, welfare programs, and medical assistance.

By no means is the proposed legislation intended to be a comprehensive immigration reform bill. Rather, it is focused on enforcement and accountability of existing immigration laws and programs. There is much that remains to be done before we can tackle comprehensive immigration reform. But this bill is the next step toward strengthening our immigration laws.

The Strengthening Our Commitment to Legal Immigration and America's Security Act will curb identity theft and techniques that have been exploited by the illegal alien community; stop the abuse by this administration from granting mass parole or deferral to illegal aliens; help prevent Mexican drug cartels from growing marijuana in our national parks and on our public lands; and prevent so-called sanctuary cities by requiring law enforcement agencies that are selected and enrolled in the 287(g) and Secure Communities programs to fully comply with the established requirements.

There is a need for accurate accounting to track the flow of federal and state welfare dollars given to illegal aliens and ensure that U.S. citizens are the first to receive Federal health benefits. Additionally, my bill would rectify a gaping hole in our visa system by requiring the Department of Homeland Security to create a mandatory visa exit procedure that would track the departure of our foreign visitors to the United States; provide that gang members will be ineligible to receive a visa for travel to our country; and direct the State Department to examine the Diversity Visa program, which in the past has been wrought with fraud and abuse.

I do not think anyone could disagree with the substance of the Strengthening Our Commitment to Legal Immigration and America's Security Act. It touches on some of the more overlooked, but critical areas of our broken immigration system. Moreover, I believe these steps can be enacted in a bipartisan fashion without creating a host of new programs and revenue streams. I encourage my colleagues to work with me to move this bill forward.

Mr. President, today Chairman Baucus filed an original bill and an amendment to the Federal Aviation Administration, FAA, bill currently being considered by the Senate. Both of these items are identical. They reflect the revenue title to the FAA bill that was reported by the Finance Committee last Tuesday. I am hopeful that this heralds the passage of long-term FAA reauthorization and represents a break with our ongoing pattern of funding the FAA with short-term extensions of current law.

In most respects the Finance Committee product reflects the FAA bill that was passed unanimously last year with 93 votes. However, there is a very important difference. Thanks to an amendment filed by Senator Coburn, who is a new member of the Finance Committee, only 90 percent of forecasted revenues to the Airport and Airway Trust Fund for a given year will be spent. Over the past several years the uncommitted cash balance remaining in the trust fund has steadily decreased because actual revenues have fallen short of forecast revenues. Since recipients of trust fund revenues expect to be paid in real dollars and not forecasted dollars, it makes sense to make sure the trust fund contains actual dollars. By allowing only 90 percent of forecast trust fund revenues to be spent, we are putting in place a 10 percent cushion to guard against the frequent occurrence that actual trust fund revenues will fall short of projected revenues.

The Finance Committee product also increases the amount general aviation and fractional aircraft will pay for each gallon of jet fuel they use. These increases will impact neither commercial airlines nor passengers of commercial airlines. The cost of fuel for commercial aviation is not changed at all by the Finance Committee product. What makes the increases of the costs borne by the general aviation and fractional communities unique is that both groups are active supporters of these increases. As these letters explain, the increases in the cost of jet fuel are supported because the proceeds will help our airport and airway system transition to the Next Generation Air Transportation System, or NextGen. NextGen is the satellite-based air traffic control system that is slated to replace our current radar-based system. The transition to NextGen is expected to reduce inefficiencies within and enhance the benefits of our airport and airway system.

In closing, I want to thank Chairman Baucus and the other Members of the Finance Committee for their work on the revenue title to the FAA bill, and I hope for the rapid completion of FAA reauthorization.

Mr. President, I ask unanimous consent that letters of support be printed in the Record.