Floor Statements

Mr. President, I call up amendment No. 2247.

Mr. President, water systems are currently required to mail reports every year that detail in great specificity all the minute trace chemicals that are inevitably in the water supply. This is at a great cost and it is a problem, particularly for rural water systems. What my amendment would do is permit the water companies, provided there are no violations, to inform their customers in each and every monthly bill that they can obtain this information on the Web site. There are absolutely no changes whatsoever in water standards, of course, and every company would still have to mail these detailed reports if the water failed to comply with the State or Federal standards. This is a way we can free up tens, even hundreds of thousands of dollars in unnecessary mailing costs and make that available for infrastructure investment.

I am happy to yield to my colleague, the Senator from Oklahoma.

I ask for the yeas and nays.

Mr. President, I call up amendment No. 2226, which is at the desk.

Mr. President, this is an amendment that repeals the Biorefinery Assistance Program. This is a program that primarily provides loan guarantees to cellulosic ethanol plants.

The fact is the taxpayers are already subsidizing ethanol plants in many ways. The Federal Government already provides a tax credit of $1 a gallon to ethanol. The Federal Government creates a mandate that forces consumers to buy this product whether they want to or not, thereby creating a market for ethanol.

We provide grants for ethanol. Do taxpayers also have to risk their money by guaranteeing loans to subsidize this activity? I do not think that is a good idea. This is the same idea that got us into trouble in so many ways. A similar loan program was the source of hundreds of millions of dollars of losses to Solyndra. And just this year, this very program cost $40 million with the bankruptcy of Range Fuels.

I urge my colleagues to vote for a modest reform here. Repeal this one narrow program, the Biorefinery Assistance Program. I urge a ``yes'' vote on the amendment.

I ask for the yeas and nays.

Madam President, I call up amendment No. 2433.

Madam President, I will claim the first minute and yield the first 30 seconds to the Senator from New Hampshire.

I thank the Senator from New Hampshire. Let me point out that this amendment is such a modest reform. It lowers the price support on raw sugar, for instance, from 18.75 cents per pound all the way down to 18 cents per pound.

This is an amendment that will save consumers money, save taxpayers money and, most importantly, it will save jobs. As the Department of Commerce pointed out, for every job saved by the sugar program, three jobs are lost. It is a modest amendment that simply restores us to the policy prior to 2008.

I ask for the yeas and nays.

Mr. President, I call up amendment No. 2217.

Mr. President, the bill we are debating today has a provision called the Organic Certification Cost Share and Agricultural Management Assistance Program. This creates $115 million of mandatory spending over the next 5 years. It continues existing policy except at a much higher spending level. It is a 53-percent increase over the 2008 farm bill. Half of the funding goes to pay producers. Half of this funding goes to have taxpayers pay the cost of producers that want to certify that they grow an organic product. I have nothing against organic farming, but it is a $31 billion industry. It has had a 50- percent growth rate just since 2008, and this applies only to large producers because small producers are not required to seek this certification. This is a great market. There is a great deal of interest in organic products, but I think these large producers can pay for their own certification.

The other half goes to duplicative conservation efforts.

Thank you, Mr. President.

Mr. President, I rise to discuss a particular amendment-- perhaps a couple of amendments--on the farm bill, specifically the amendments to the sugar portion. There are a number of titles, it is a big, complicated bill, and there is a great deal of discussion about the many reforms that are contained in this bill.

There is one very glaring exception. There is one huge program that has no reforms whatsoever in the underlying bill, and it just so happens to be in, in my view, one of the most egregiously flawed programs in the entire agricultural sector, maybe in government as a whole, and it is the Sugar Program. This is a program which systematically forces American consumers to pay much more than the global price for sugar. It is a huge transfer of wealth from consumers, including the poorest American consumers, to a handful of wealthy sugar producers. It is completely wrong, it is ill-conceived in the first place, it is perpetuated in this bill, and I think that is just unconscionable.

Some of the specific ways in which the existing program has the government completely manipulating the market for sugar include explicit limits on how much sugar can be produced domestically. There is a de facto government-imposed price floor on sugar rather than allowing the price to reflect whatever supply and demand would lead to. It puts strict limits on how much sugar can be imported without forcing Americans to pay taxes on those imports in the form of duties. It mandates that the government purchase excess sugar and then sell it at a loss to ethanol producers. All of these are features of the existing sugar policy, and all of them are left completely unchanged by this bill. So it is screaming for some amendments to provide some commonsense reforms to this very badly flawed program.

Let me be very clear. At the end of the day, the net effect of all of these machinations in which the government manipulates the market for sugar is that U.S. consumers end up paying much more, often about double the going rate that everyone else in the world who doesn't manipulate their markets pays for sugar.

By the way, that should be reason enough to end this program entirely, but there are other reasons. For instance, the existing sugar policy--as I said, unchanged in this bill--is absolutely costing us jobs in the United States. That is not even disputable. It is, on balance, a job killer. It is costing us jobs today specifically in manufacturing--the manufacturing of products that include sugar, of which there are many.

Here is a simple observation from the CEO of a candy manufacturer in Pennsylvania who uses sugar as an import. He points out: These sugar subsidies artificially inflate the price of one of the staples of the candy industry and force us, and any other companies, to choose between absorbing the higher costs, passing the costs on to consumers, or producing elsewhere.

The fact is that some people inevitably choose to produce elsewhere.

The next chart illustrates a point that has been made by the U.S. Department of Commerce. We are not just making these things up. Many U.S.--essentially sugar-consuming producers--manufacturers have already closed or relocated to Canada, where sugar prices are less than half of the United States. Why? Because Canada chooses not to have a ridiculous sugar program. So we lose jobs as manufacturers go to Canada, use market-priced sugar at much lower costs to produce candies, and then import them into the United States.

The next chart quantifies this. It is very simple. For every job that is protected somewhere where they are growing beets or cane sugar, three manufacturing jobs are lost. Again, these are statistics from the Department of Commerce. This is very clear. This is not really refutable.

The final chart illustrates this in another way. The Canadian Government has figured this out, and they advertise the fact that they have a huge competitive advantage because they choose not to create an artificially high price for sugar, and as a result they are constantly trying to persuade manufacturers to move up to Canada where they can have lower costs. By the way, for many of these companies, the cost of sugar in the United States is the single biggest cost they pay.

The other point that we should stress and that I would like to underline is that not only do we lose jobs systematically because of this program, it also hurts consumers. Think about it. Everybody consumes sugar. There is sugar in so many products that it is impossible to avoid this inflated cost. It should be seen as equivalent to a tax. It is as though the Federal Government is imposing a tax on sugar. It doesn't work literally that way, but it has that economic effect. It is completely equivalent. Who gets hit the hardest? It is the lowest income Americans. It is as regressive a tax as we can have. Think about that. Wealthy people devote a small percentage of their income to food. They have plenty of money to spend on other things. If you are a low-income American, then you necessarily are devoting a large part of your income to food, and so much of it is artificially inflated in cost by our own Federal Government. This is what is so egregious about it.

The GAO said in 2000 that the existing sugar policy forced Americans to pay $2 billion in additional food costs. And if we use their same methodology and we move it ahead to today, AEI projects that those costs are now $3.5 billion. This is a simple straightforward transfer of wealth from low- and middle-income and ordinary American consumers to a handful of wealthy producers. It is as simple as that.

There is one other feature. There is also an ongoing risk to taxpayers. Because of that feature I alluded to earlier in which the Federal Government buys what is deemed to be excess sugar and then sells it at a loss to ethanol makers, CBO projects this will lose $193

million for taxpayers over the next decade.

We have an amendment that would address this, the Shaheen amendment. I think Senator Shaheen has actually offered more than one amendment on this topic, one would repeal the entire program. I salute her. I agree with her. I support that. My understanding is that we will soon be voting on a motion to table that amendment. I think it is quite unfortunate that Senator Reid would choose to take this amendment off the table, so to speak, to put it aside. A vote to table the amendment is, of course, a vote to kill it. I think we ought to be passing this amendment and end the practice of forcing American consumers to transfer this wealth in this fashion.

But I wish to also stress that I am concerned about the process that has gotten us here. I am concerned that Senator Reid has intentionally chosen an amendment that is going to be very difficult to pass. As strong as its merits are, from my point of view, I know it is difficult to get a majority in this body to support the full repeal of this program. I hope we can succeed in that, but I don't know that we can. If we cannot, Senator Shaheen has another amendment that I have joined her on which would push back some of the excesses of this program--push us back to where we were back in 2008, prior to the most recent farm bill. The amendment makes some modest changes and just scales back some of these excesses. I certainly hope we get a chance to vote on that. If we can't pass full repeal, we have every right--and I would argue every responsibility in this body--to try to at least improve on what is such an egregiously flawed program.

Again, I would underscore the fact that the current bill is silent; in other words, it perpetuates, it continues this spectacularly flawed program that is so unfair to American consumers. We will have an opportunity to vote later today on a motion to table. I hope we defeat the motion to table so we can take up this amendment and do away with this program. But failing that, it is very important that we have an opportunity to at least amend the program.

With that, I yield the floor.

Mr. President, I want to submit for the record my views on roll call vote No. 118, the nomination of Andrew Hurwitz to the U.S. Court of Appeals for the Ninth Circuit. I am deeply concerned with Mr. Hurwitz's role in advancing a constitutionally flawed doctrine that would become the framework for Roe v. Wade. His actions constitute a brand of judicial activism unfit for the Court. I do not believe Mr. Hurwitz holds the requisite traits necessary to be an objective arbiter of the law. Had I been present, I would have voted ``nay.''

Mr. President, Human Events, the nation's oldest conservative weekly publication, has been a staple of the post-war conservative movement. I want to congratulate Human Events on its many years of providing incisive coverage and on its recent relaunch. According to the publication's mission, Human Events ``looks at events through eyes that favor limited constitutional government, local self- government, private enterprise and individual freedom. These were the principles that inspired the Founding Fathers.'' These are the values that have made and will continue to keep America great.

Mr. President, I rise to speak on the budget resolution I have introduced and on which we will have a vote later today, at least on a motion to proceed. I want to start with underscoring the magnitude of the challenge we face. We have a full-blown crisis that awaits. It could arrive at any moment virtually if we do not change the course we are on.

The deficit we have in 2012, $1.3 trillion, is the fourth consecutive year with a deficit of over $1 trillion. We are now routinely running deficits that are 7, 8, 9 percent of GDP. Of course, every year we run a deficit, the excessive spending over the tax revenue has to be funded by more borrowing. So we have the mounting debt that is now at stunning levels. For much of the post-war era, after the big repayment of debt after World War II, the national debt fluctuated somewhere around 40 percent of our total economic output.

Today our actual debt held by the public is 73 percent of our total economic output, and that is just the publicly held debt. That does not include the liabilities within the government, which, if you add that, is up to 100 percent of our total economic output. This has never ended well for a country that last chose to run up massive deficits and massive debt. I would argue that we are seeing exactly how this typically plays out. We are seeing it across the Atlantic in Europe where countries are a little further down this road than we are today, having run big structural deficits for longer than we have, and having accumulated more debt as a percentage of GDP than we have thus far.

We see what has happened, especially in countries such as Greece where it is particularly acute, and other countries, especially on the periphery of Europe, that arguably are not terribly far behind. This is completely unsustainable, and I think what we are witnessing today on the Senate floor is that there is one party in this Chamber that is addressing the problem. There is one party that is proposing very specific solutions.

It is perfectly reasonable to have objections and disagreements with any number of elements in my budget resolution or Senator Paul's or Senator Lee's or the Ryan budget. But what I do not understand is how the majority party, the party that is actually in control of this Chamber, can think that it is OK not to have an alternative, not to offer a vision, not to offer a solution to the biggest problem we face as a nation and one that is imminent; one that if left unaddressed certainly will result in a crisis. It is just a question of when.

So I think this is an unacceptable abdication of responsibility. But that is where we are. I would argue that what got us into this problem is too much spending. Look at the numbers. They speak volumes. Since 2000, Federal spending has more than doubled. We took spending, which was as recently as 2007 only a little over 19 percent of our total economic output, and grew that to 24 percent of our economic output. That is a tremendous surge, not just in the absolute dollars in spending but in the relative size of spending relative to our economy.

President Obama's budget is not a serious attempt to deal with this. It was

put on the floor of the House of Representatives and got precisely zero votes. It failed 414 to 0, meaning not a single Democrat wanted to vote for the President's proposal. I can understand why. The President's proposal is to increase spending, increase taxes, and increase debt.

The President's proposal claims to level off debt as a percentage of GDP for a brief time but then starts to grow again. The reason the President absolutely refuses to offer a budget resolution that solves this problem is because he refuses to deal with the real underlying driver of this, which we all know are the big entitlement programs.

The current structure of these programs is unsustainable. If anyone doubts it, look at what CBO has shown us and has told us. By 2021, 9 years from now, if we take three categories of Federal spending: the Social Security Program, interest on our debt, and health care entitlements, those three things combined will consume almost 90 percent of all of the revenue we can realistically hope to collect, if the last several decades are any indication of what we are going to collect.

How could it possibly be that we would continue down this path where those three categories are going to consume virtually the entire budget? I would also observe it is a simple matter of arithmetic that no significant Federal Government program can grow faster than the economy for very long because everything has to be paid for by the economy. In fact, it has to be paid for by some fraction of the economy. If we have a big program that is consistently growing much faster than the economy, well, it will consume everything. Then these programs will collapse, and then what are we going to do?

Rather than waiting for that day to come, some of us are proposing specific solutions for this problem. Medicare is growing much faster than the economy. Medicaid is growing, arguably, at least two times as fast as the economy. Other mandatory health care programs, if President Obama gets his way, will grow even faster.

This is all completely unsustainable, and we are going to fix this problem. The question is whether we fix it while we have this window of time, when we are still able to borrow the massive sums that we are borrowing, or will we wait until we have a full blown crisis, the bond market shuts us down, and then we have sudden Draconian and very disruptive and painful decisions to make.

I would rather do this while we have this moment, change the course we are on, and establish a sustainable fiscal path. So I have submitted a budget for the second consecutive year that puts us on a path to balance. My budget balances within the 10-year historical window of the budget resolutions. It actually balances in the eighth year and runs a very modest budget surplus in the ninth year.

I do that in part by reducing the total level of spending relative to GDP as compared to the alternative budgets, specifically the President's alternative or CBO's. I cannot compare it to the Senate's Democratic alternative budget because that does not exist. We have no idea what the Senate Democratic proposal is, but I have one.

So I will elaborate on that a little bit. My proposal is that we get spending down to about 18.3 percent of GDP. That is about the same level revenue has been historically, which thereby brings our budget into balance. Some of my colleagues have suggested there are Draconian spending cuts that will get us there. Well, let me be very specific about what spending cuts are necessary to achieve this.

In 2013, spending in my budget is 2.9 percent below what it is in 2012, which means the Federal Government will spend--under my budget, it would spend 97.1 percent of everything it spent the previous year. People can decide whether that constitutes Draconian cuts.

Now, here is the amazing thing. After that, on average, over the 10- year window, my budget calls for Federal spending to increase--in fact, to increase at about a rate of 3 percent per year nominally. See, this is my point. This is a solvable problem. All we need to do is cut out some of the excess, restructure certain programs, and allow the government spending to grow. It just cannot grow quite as rapidly as it is currently projected to do.

If we get that under control, we can put ourselves on a sustainable path.

Another part of this is to have policies that maximize economic growth. I mean that is an important goal in and of itself, but it is also a path to restoring balance because stronger growth generates more revenue for the Treasury.

Well, my budget would do that without raising taxes. What I would do is have progrowth tax reform. That is comparable in spirit and in the right direction. It goes to all of the bipartisan commissions that have looked at this, whether it is Simpson-Bowles or Rivlin-Domenici or any of the others. I know there is broad bipartisan consensus on the principle that we would have stronger economic growth if we simplified the code, broaden the base on which we apply taxes, and then apply those taxes but at lower marginal rates. That is what my budget calls for. It should not be all that controversial to move in this direction of tax simplification, lowering marginal rates, and offsetting the lost revenue by reducing the value of deductions and loopholes and writeoffs. That is what my budget asks for.

There are a couple of areas that I think are important where there is bipartisan support for elements within my budget. One is, the President of the United States suggested in his budget that very wealthy senior citizens contribute a little bit more for the Medicare benefits that they obtain. Some means testing already occurs within Medicare. But I happen to agree with the President that it is reasonable, especially under these circumstances, to ask the wealthiest members of our society to pay a little more for the benefits they are getting from the government.

So my budget adopts the President's proposal of expanding means testing, expanding the contribution we would ask from the wealthiest Americans for their Medicare benefits.

I also include in my budget long-term reform for Medicare that makes it more viable. This has been much maligned despite the fact that one of our Democratic colleagues, Senator Wyden, supports this approach as well.

I wish to emphasize that this is a different plan than what it was last year. Last year there was a criticism that any premium support model that establishes the amount of money given to seniors to purchase health care at a fixed dollar amount was a flawed approach because what if health care costs rose more rapidly than that amount could afford to pay for? That is a valid concern.

There is a different dynamic, a different mechanism in the House- passed budget, and in my budget, and I think it is part of the reason a Democratic Senator has embraced this, and Alice Rivlin, a former senior member of the Clinton administration, supports this. You set the premium based on the second lowest bid for the health care services we want to provide, thereby ensuring that a senior citizen would have enough money to purchase that plan. Not only that but we go further and include the traditional fee-for-service Medicare system to which seniors are currently accustomed--we include that as one of the plans that could bid. So it is absolutely the case that any senior citizen who wanted to stay with the traditional fee-for-service Medicare Program could do so under the reform plan.

I happen to believe that in an innovative marketplace, there will be more attractive options. I happen to know that under this system, a lot of seniors--my parents included--have to wait forever to see a doctor, and part of the problem is the dysfunctional system we have now. It is already costing us access and quality in health care.

I think this reform will make Medicare a better program for the people who need it. Yes, we will ask the wealthy to pay a little more for it. That is reasonable. Those seniors who want to stay in traditional Medicare can do that too. In the process, you can put this on a sustainable path. It has some bipartisan support. Mr. President, we don't really know the extent of that because our Democratic colleagues refuse to put a budget or mark up a budget in committee, present one on the floor.

I will close with this request, which is to vote for the motion to proceed.

Let's get on to my budget and have a debate about this, and let's see where people are. I don't know how we are ever going to reach the compromise we need to reach to put us on a sustainable path if one party is consistently putting out a whole range of ideas and the other party refuses. How do you negotiate with somebody who doesn't have a position? How do you have that discussion?

I don't know how many of my Democratic colleagues agree with the President of the United States and my own thought that we ought to ask wealthy seniors to pay a little more for Medicare benefits. If we get on the bill, we could have a debate and have amendments. I think this is too big and too important an issue not to address. The way to address it is to vote yes on the motion to proceed to get on a budget resolution, and then let's have that discussion and let the American people see it. Let's take their ideas and all of the ideas we have and see if we can make some progress.

There is an unambiguous fact that I want to underscore. There is one party showing up at this debate--the three Republican Senators who are proposing budget resolutions, comprehensive documents that address the entitlement reform we need, the discretionary spending limit we need, and the tax reform that will help grow this economy and generate the revenue we need. We have done that. As I say, it is perfectly fair and legitimate to criticize any aspect of any of that, but I think there is an obligation especially of the majority to offer its view, its alternative.

I urge my colleagues to vote in favor of this motion to proceed and allow us to get on with addressing the single most pressing problem facing our country, which is restoring a fiscally viable path that allows us to have strong economic growth.

Madam President, the vote we are about to cast is on a motion to proceed to the budget I have introduced, one of the important features of which is within the customary 10-year budget window this budget would balance. It does not happen overnight. It takes 8 years to get there. But it does, in fact, balance, and it does it by essentially containing the rate of growth in spending. Only in the first year is there a spending cut, and that is less than 3 percent. Every year thereafter spending grows in this budget, but it grows a little more slowly than the alternative. It grows at a sustainable pace so that with normal economic growth we will reach a balance within 8 years and a modest surplus thereafter.

It does call for some of these structural entitlement reforms we need. Specifically, it would call for adopting the bipartisan Medicare reform plan that I would remind everyone permits senior citizens to continue to choose the traditional fee-for-service Medicare they have now--if that is their choice--but it does make other options we think would be more cost effective available as well.

It also adopts the President's recommendation by asking the wealthiest Americans to pay a little more for the Medicare benefits they enjoy. It asks for tax reform that we all know we need to generate economic growth, and it puts our budget on a sustainable path.

I urge Members to vote in favor of this motion.

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

Mr. President, I call up my amendment No. 2104, which is at the desk.

Mr. President, I ask that the reading of the amendment be dispensed with.

Mr. President, this is an amendment that deals with the reauthorization of the Ex-Im Bank. I urge my colleagues to support this amendment. I think it is a very important measure to begin the process of phasing out a very unfortunate practice that we participate in, as do many of our trading partners, which is the active taxpayer subsidization of exports.

I want to be very clear. There is a very real risk that is carried by American taxpayers, and that risk is systematically underpriced. The fact is the Ex-Im Bank extends loans and provides guarantees to countries and companies buying American exports. It provides those loans and those loan guarantees under terms that are not available in the private sector.

There is a reason those terms are not available in the private sector. It is because the private sector necessarily requires full compensation for whatever risks they take, and there is a risk in any loan. The Ex-Im Bank underprices these loans systematically, and that is why it is important, that is why it exists, and that is why it does business that the private sector cannot win away from the Ex-Im Bank. The Ex-Im Bank necessarily and systematically underprices the risks that taxpayers are on the hook for. This is what many of us object to, the risk that the taxpayers are forced to bear.

In addition to enforcing taxpayers to incur this risk, it is quite unfair to American companies that have to compete with the foreign companies that get the subsidized financing. This isn't just theoretical. This happens all the time. Some years ago I was involved in a dispute because the Ex-Im Bank was going to finance the acquisition of equipment by a foreign--I think it was a Chinese steelmaker--which would enable them to make steel at lower prices than American steelmakers could make because the American companies wouldn't be able to obtain this equipment with the subsidy that the Chinese

companies could obtain through the Ex-Im Bank.

More recently is the case of Delta Airlines, which has observed that the price they have to pay for jets is higher than the price paid by other countries that are operating competing routes but buying their aircraft through the subsidies of the Ex-Im Bank.

In 2008 President Obama, referring to Ex-Im Bank, said this is ``little more than a fund for corporate welfare.'' I think that is a little bit harsh. I understand how this has come to be, I understand why it has been extended, and I understand why people believe we have to subsidize our exports. It is because other countries around the world subsidize theirs. In other words, if our German and French and Chinese and Russian taxpayers are made to take a risk in subsidizing the sales of their manufacturers, then our taxpayers ought to take a similar risk.

I think there is a logical solution. Let's require the administration to sit down with our trading competitors and negotiate a mutual phaseout of all of these export subsidies. Frankly, it is in everybody's interest. We could have a level playing field on which no taxpayers are subject to this risk, no taxpayers are asked to subsidize the sales of private companies, and I think that is what we ought to do. This is what my amendment would accomplish.

My amendment says we will go ahead with the reauthorization of the Ex-Im Bank, but the first increase in the lending limit we are currently at--the bump-up of $20 billion that is contemplated in this bill that has passed the House--would be contingent upon the administration informing Congress that they have begun the process of negotiating a phaseout of all export subsidies.

I recognize this phaseout would not occur immediately but would be a gradual process that would happen over time. So under my amendment the second increase would only occur when the administration came back and informed Congress that they had, in fact, reached an agreement with our leading trading partners on a framework that would phase out subsidization of exports.

I think this is a very sensible way to deal with the only compelling argument I have heard in favor of forcing taxpayers to continue to take this risk; that is, well, everyone does it, so we must. Since that is the only reason, then let's start the process of persuading everyone else not to do it. We have tremendous leverage in both bilateral and multinational trade negotiations of all sorts. There are ways that the administration--if it makes this issue a priority--can persuade our trading partners that this is the right direction to go.

Each of our trading partners has their own constituency of taxpayers who would probably rather not be forced to subsidize this process just as we do. I think this amendment does it in a careful fashion that allows businesses to continue for now provided we start in a different direction, a direction that will avoid continuing to put taxpayers at risk.

I urge my colleagues to support my amendment numbered 2104.

I yield the floor.

Madam President, there are two things we know about reauthorizing the Ex-Im Bank. We know our taxpayers are subject to a risk for which they are not fairly compensated in the sense that Ex-Im necessarily systematically underprices the risk. That is precisely why a borrower goes to them.

We also know it is unfair to a domestic competitor that cannot obtain the financing at the same rate that a foreign company can. We are told we should do this anyway because everyone else does it, because all of our competitors around the world subsidize their exports.

So I would suggest the logical conclusion is we should work to phase out export subsidies all around the world. That is what this amendment does. It reauthorizes Ex-Im. It lifts the limit of the borrowing cap. But it makes it contingent on the administration beginning a process of negotiating a phaseout of export subsidies. It makes the second increase in the lending cap contingent on an actual agreement that will, over time, get us all out of the business of risking taxpayer dollars in export subsidies.

I think this is a sensible way. It will allow an adjustment to take place for those who are dependent on this bank, but it will get taxpayers off the hook in time.

So I urge support.

Madam President, I ask for the yeas and nays.

Mr. President, I ask unanimous consent to speak as though in morning business.

Mr. President, I rise this afternoon to speak against the so-called Buffett rule. This is a gimmick. It is a political gimmick. This is not a serious effort to deal with a ridiculously broken Tax Code. This is not a serious effort to deal with a completely broken budget. And, frankly, it is very disappointing to me that we are wasting time on this instead of dealing with both of those things.

We have a Tax Code that is ridiculous, impossible to understand, counterproductive to economic growth, and that badly needs a complete overhaul that would simplify the Code, get rid of much unfairness, lower marginal rates, broaden the base, and encourage strong economic growth. Instead, we have this little gimmick because we don't have the political leadership to deal with the underlying real problem of a badly flawed Tax Code.

Likewise on budget policy, this does nothing meaningful for our massive budget deficits that we have been running. In fact, this body chooses again for the third consecutive year not to even have a budget. It is unbelievable. Instead, we are going to waste time arguing about this political stunt.

The President proposed a budget, at least. Unfortunately, it was not a serious budget, not a serious attempt to deal with the massive deficits we are running. It is the fourth consecutive year of trillion dollar deficits. Instead of dealing with that, we have this gimmick.

Let's be clear. This is not a serious attempt to deal with tax reform or the budget. This so-called Buffett rule, this tax increase, would raise less than $5 billion a year. That amounts to about one-half of 1 percent of the $1 trillion deficit the President has proposed that we run. In fact, it would cover about 2 days' worth of the deficits we are running for 2013.

Here is a chart that illustrates the deficit we will have under the President's policies without the Buffett tax. Here is the deficit we will have if we pass the Buffett tax. If you can't tell the difference, it is because there is no meaningful difference.

Folks, we ought to be dealing with the real tax reform that we need to encourage economic growth and help reduce this deficit. Instead, we are wasting time with this.

Since we are not doing what we ought to do, why are we having this argument? Unfortunately, it looks as though it is an effort on two fronts. One is to simply engage in class warfare, generate envy and resentment, and try to use that for political gain. And, secondly, it is an effort to distract from the underlying mismanagement of economic policy and fiscal policy we have seen from this administration.

I know what the claim is from the other side. We hear this is all about making sure the rich pay their fair share. I have to say I have a little trouble taking lectures on fairness from folks who think taxpayers ought to be made to put $500 million into a solar energy company that does not have a competitive product, which drives it into bankruptcy at the cost to the taxpayers, from the same folks who want to force taxpayers to continue subsidizing plug-in cars people don't want to buy. That kind of crony capitalism and distorting of our economy at the expense of taxpayers doesn't strike me as fairness, so I have a hard time taking a lecture on fairness from people who advocate those things.

But let's look at this Tax Code. If we want to talk about fairness, that is fine. How about the fact that, according to the Joint Committee on Taxation, almost half of all Americans today pay no income tax at all or actually receive money through the income tax code? The other half pays all of the taxes. We are hearing from our friends

that that is not enough; they need to pay still more.

My second chart will illustrate the point that according to the CBO, if we look at all Federal taxes, the middle quintile, the middle 20 percent of wage earners in America, pays about 14 percent as an average tax when you combine all the kinds of Federal taxes that are paid. The top 1 percent pays 30 percent. So it is more than twice as high--29.5, actually.

If we look at just the income tax, the disparity is even bigger. If we look at the income tax alone, the middle quintile, the middle class, the middle 20 percent, when it comes to income tax alone on average pays about 3.3 percent as an effective average income tax rate. The top 1 percent pays 19 percent; that is, on average, almost 6 times as high.

The fact is we have a very progressive tax system, not just by the historical measures of our own previous tax systems, but look everywhere else in the world. In fact, the United States, according to the OECD, has the most progressive tax system in the industrialized world.

This is a chart that measures progressivity. Greater progressivity is in this direction; less is in this direction. As you can see, this ranking shows all the countries around the world that have less progressivity than the United States, which means that higher income Americans pay a greater share of income taxes and taxes generally than in any other country in the world. But again, we are told this is not enough.

Clearly there is something else going on here, and here is what concerns me the most. The real consequence of this so-called Buffett rule, this tax increase, are that it is meant to be a tax on investment returns. It is a tax on capital gains and dividends. It is a tax that would upend decades of established law with respect to the differentiation we have put in place with respect to dividend income versus wage income. And it disregards the very sound reasons why we have created that distinction, one of which is that investment returns are taxed multiple times.

We don't hear so much about that during this debate from my friends who are advocates for this new tax increase. But the fact is, first of all, it is only aftertax income that can be invested in the first place. So someone had to pay taxes on their earnings, and then after they have spent what they need to for their cost of living and if they have managed to save something which they then invest, they have already paid tax on that. Now the investment they have made--and let's say this is an investment in a corporate stock. Let's keep in mind that that corporation has to pay tax before they have an opportunity to provide a return on the investment that is made. And as it happens, in the United States, our corporations pay the highest corporate tax in the entire industrialized world, 35 percent.

We have got a terrible corporate Tax Code that needs to be reformed in many ways. One of them is to lower this top marginal rate, but right now it is 35 percent. And what the proponents of this rule are saying is that after a corporation pays that 35 percent tax on whatever income they can earn, and when they then choose to dividend some of that remaining aftertax income to the people who own that company, they want those owners to pay yet another tax that is even higher than we pay now.

We have a chart here that illustrates what the net effect of this is. Given that we have a 35-percent top corporate tax rate, and if we were to adopt this proposal to impose this 30-percent minimum tax, for an individual who has dividend income, first the company in which they invest pays a tax. Not all companies pay the 35-percent rate, but that is the top rate and it is in effect on many companies. Well, if the company has to pay 35 percent of a given $100 of income, they are left with $65 in corporate aftertax income. If that company then decides that the people who own it ought to get a dividend reflecting their ownership on that $65 that is available to be paid out as a dividend to investors, the proponents of the Buffett rule would have those investors pay another 30 percent. That is $19.50, leaving the investors with $45.50 out of the $100 of income. In other words, the government takes the lion's share of the income from this investment.

The net effect of that, of course, is that it diminishes the incentive to make these investments in the first place. It makes other countries more attractive places to invest capital, to invest in a business to try to generate a return.

There is another aspect that is disturbing about this which is, if you ask me, it is very reminiscent of the alternative minimum tax. We tried that once. In 1969, Congress decided there were some people who weren't paying enough in tax, and they said we are going to target a handful. Literally, it was 15 people--not 155,000 but 155 people who were subject to the alternative minimum tax, which was this confession of the absurdity of the Tax Code in the first place. Right? Junk the entire existing Tax Code and have yet a second parallel Code that will apply to just those rich 155 people. Well, guess what. Today that applies to tens of millions of Americans, and every year Congress has to do a temporary fix because it wasn't intended to do that.

I would suggest if we go down this road, we are going to find that this tax--which we are told today would only apply to millionaires and billionaires, well, pretty soon the hard cold reality of the fact that it doesn't generate any revenue to speak of if you apply it just to millionaires and billionaires, means it is going to be expanded to the middle class and far more people, very much to our detriment.

Finally, let me say that it is a bad idea to confiscate the capital which is the lifeblood of an economy. This next chart illustrates the critical role that investment plays in economic growth and in job creation.

A couple of squiggly lines. But one thing you notice if you take a quick look is there is an inverse relationship here. When the black line goes up, the red line is going down. The black line is investment as a percentage of our economy. And when investment climbs--the red line is unemployment--you see, unemployment goes down. This is very well understood. It is capital invested in the economy that creates growth and creates jobs. What this rule would do is it would impose a new layer of additionally higher taxes on that very lifeblood of our economy.

It is capital also that drives wages higher. We should never forget that fact. It is capital that allows the hunter-gatherer to have a hoe and become a farmer. It is capital that allows the farmer with a hoe to cast aside the hoe and drive a tractor and become far more productive. It is capital that allows the laborer who is digging with the shovel to put aside the shovel and drive a backhoe. And as I think everybody understands or should understand, the farmer who is using a tractor is producing more and has a higher income than the poor guy who is using a hoe. And the guy who is operating a backhoe has far more income and is far more productive than the guy who is using a shovel. It is capital that makes that possible.

There is a metaphor I like about this, and I am not sure who to credit it to, but certainly I didn't invent it. I may not do it justice, but the gist of it is this:

The comparison to the economy is that of a fruit tree.

A farmer who has a fruit tree cultivates that tree so it will produce fruit, and the fruit is the income the farmer earns from the work he puts into cultivating that tree.

If the government comes along and takes some of the fruit as a tax, as long as it doesn't take too much it still makes sense for the farmer to cultivate that tree so he can have that aftertax income. And as long as the government only takes a portion of the fruit, then the government is not diminishing the ability of the tree to produce that fruit.

But if the government comes along and says in addition to taking a whole lot of the fruit, we want to saw off a branch because we want some firewood, that is a whole different matter. Because whatever you think of how many of those apples or whatever portion of that fruit you wish to take from the farmer, once you start cutting at the tree you are diminishing the ability of the tree to produce income for the good of the farmer and for society.

That is what happens when we restrict capital, and I am afraid this is the path we would be going down if we

adopt this. This is bad economic policy. We already have the most progressive Tax Code in the world, and very progressive by our own historical standards.

For the sake of job growth, economic growth, and in the hopes that we will instead have a meaningful discussion about budget policy and tax reform, I urge my colleagues to vote no today on the cloture motion on the Buffett rule.

I yield the floor.

Mr. President, I rise today to speak on H.R. 3606, the Jumpstart Our Business Startups, or JOBS, Act, which the Senate passed on Thursday, March 22, 2012, by a vote of 73 to 26. I am particularly pleased that H.R. 3606 included language from S. 1824, the Private Company Flexibility and Growth Act, which I introduced on November 8, 2011, with Senator Carper. We authored this important measure to update the shareholder threshold after which entities must register their securities with the Securities and Exchange Commission. This and other provisions contained in H.R. 3606 will provide companies and small banks with the flexibility to grow, which will in turn lead to economic growth and job creation.

As the Commission amends its rules implementing title V of H.R. 3606, it is important that it be mindful of Congress's intent that the rules provide clear guidance to issuers on how to comply with the new provisions. For instance, section 503 of the JOBS Act requires that the SEC adopt safe harbor provisions that issuers can follow when determining whether holders of their securities received the securities pursuant to an employee compensation plan in transactions that were exempt from the registration requirements of section 5 of the Securities Act of 1933.

The issues that we would expect the Commission to address when adopting the safe harbor provisions include the steps issuers can take to obtain comfort that securities are held by persons who received the securities pursuant to an employee compensation plan and whether the issuance of those securities were exempt from Securities Act registration. To provide issuers appropriate comfort under the rules, the Commission could adopt a safe harbor provision that allows issuers, absent actual knowledge of information to the contrary, to rely on information it has about a person at the time the securities are issued. The Commission could also adopt a safe harbor provision that allows issuers to consider an issuance of securities exempt from the Securities Act if it has a reasonable belief that the exemption existed at the time the securities were issued.

The definition of an ``employee compensation plan'' should be interpreted broadly. For purposes of determining whether a person is an employee who need not be counted when an issuer is calculating the number of holders of record under section 12(g)(1)(A) of the Securities Exchange Act of 1934, the term ``employee'' would include persons who are current or former employees of the issuer. We would also include but not limit this exemption to other persons such as surviving spouses or family members who inherit equity securities from the employee and who need not be included in the calculation of the number of holders of record. ``Employee compensation plans'' would include but is not limited to a written compensatory benefit plan or written contract as defined in SEC rule 701 under the Securities Act of 1933.

In revising rule 506 and rule 144A to remove the prohibitions on general solicitation or general advertising, the Commission should consider practice in the market for rule 144A securities and ensure that offerings and sales of rule 144A securities can proceed on the same basis as they do currently, including from a state blue sky perspective, regardless of whether there is general solicitation or general advertising.

The Commission should also consider adopting similar safe harbor provisions for how issuers can determine whether their investors are accredited for purposes of revised Exchange Act section 12(g)(1)(A) and whether securities are held by persons who purchase such securities in crowdfunding transactions described under new Securities Act section 4(6), in accordance with new Exchange Act section 12(g)(5)(B). We believe these additional safe harbor protections would provide important guidance for issuers and should be strongly considered by the

Mr. President, I would like to yield myself 5 minutes to discuss the JOBS Act.

Mr. President, I think we are on the verge of doing something very constructive in this body, something very constructive for our economy, for the American people, for economic growth, and for job creation. After being in a Congress that has thus far been a little frustrating for the lack of progress we have made on this front, today is a very big day.

We have a chance to pass a bill that has passed the House overwhelmingly with a huge bipartisan majority--a bill that the President of the United States has said he will sign into law. We have a chance to pass this, to have it signed into law, and to, thereby, enable small and growing businesses across America greater access to the capital they need to grow, to hire new workers, to help expand this economy, to really make some progress at a time when we need it badly.

The bill I am talking about, of course, is the JOBS Act. It has passed the House 390 to 23--an overwhelming majority. It consists of a series of component measures I will talk about in a little bit in some detail--each of which has either passed the full House almost unanimously or at least in committee by overwhelming majorities. This is very broad bipartisan support.

It is important, however, that to get to this point we need to defeat the amendment offered by my friend and colleague, whom I respect a great deal, the Senator from Rhode Island, who is offering an amendment that would have devastating unintended consequences--an amendment that does not merely weaken the progress we are going to make with this bill but would actually take us backwards from where we are today.

The way in which it would do that--and I doubt this is the intent, but I am sure this is the consequence of this amendment--if it were enacted, this amendment would cause companies that are organized as private companies, for good and sufficient reasons--many for many years; they choose to be private companies because it is what is best for their business, their employees, and their customers--it would force many of them to become public companies against their will.

Because a change in the rules, in the regulations by which we count the number of shareholders--as the amendment from the Senator from Rhode Island would do--would trigger this change in the status of these companies, having an enormously detrimental impact on many companies, raising their costs of compliance dramatically, making them less profitable.

I am very concerned, for instance, among the many ways this could happen--one could be through ESOPs, the employee stock ownership plans. I know the Senator from Rhode Island believes they would not trigger this. I think it is very likely they would. Not only would this force private companies to go public against their will, but it would discourage the creation of employee ownership in companies. I think the last thing we want to do is discourage a very constructive way of compensating employees.

So if we can defeat the Reed amendment, then we can move on to--I think we will have another amendment that will deal with crowdfunding. I do not know whether that passes. But either way we will be able to expand the opportunity of small companies to raise capital through crowdfunding mechanisms. Then we will have a final passage vote on what I think might be the most progrowth measure this body will consider perhaps this whole year.

Let me walk through a couple of specific items.

This is a chart I have in the Chamber that shows just a sampling of the organizations and institutions that support this bill. It is a wide range of businesses and business associations, folks who are in the business of launching new companies, of growing small companies. It is a long list. This is an incomplete subset of that list.

As shown on this next chart, this is an important point I want to make; that is, there is a very vast range of investor protections that are completely unaddressed, completely unaffected by this legislation.

The legislation is actually modest in the regulations it changes, and the categories it leaves in place to protect investors who are choosing to invest in companies--be they public or private--are quite extensive. A whole range of antifraud provisions that remain in full force are unaffected.

A full range of SEC disclosure and reporting obligations remain entirely still in full force. There are governance rules that are unaffected by any of this legislation--proxy statements, reporting obligations. We have a very extensive body of law and regulation that very precisely controls all kinds of reporting and disclosure requirements designed to protect investors. It all stays in place.

Investors remain very well protected if this legislation is enacted.

I want to touch on the three aspects I think I am most excited about, and I will acknowledge my bias. These are three bills I introduced with Democratic cosponsors in the Senate, each of which has been rolled up into this package, in addition to the crowdfunding piece I alluded to earlier and a bill introduced by Senator Thune and others that is also part of this package.

One of the pieces in this jobs package that is very constructive is a bill I introduced with Senator Tester. This is a bill that takes the existing regulation A in the securities law, the body of law-- regulation A allows companies to issue a security in a streamlined regulatory fashion. It streamlines the process. It reduces costs somewhat. The problem is, the current limit is only $5 million, making it not very practical for the vast majority of companies. Our bill would take that limit to $50 million and make this an option to raise capital and grow a business that would be available to far more companies.

A second piece that I introduced with Senator Carper, and I am very grateful to Senator Carper for his work, is to lift the permissible number of shareholders that a small privately held business can have without triggering the full, very expensive, and onerous SEC compliance regime. Our bill would take that from a current level of 500 up to 2,000. There are many companies throughout Pennsylvania, across the country, that are successful. They are thriving, they are growing, but they have a number of shareholders that is bumping up against their limit. They are close to 500. They need to raise capital. They do not want to go public, and they have plenty of people who would like to invest in their successful business so they can grow. But they cannot do it because they are so close to the threshold. We would lift that threshold to 2,000 so they can raise more money in the private markets which is available to them.

Then, finally, what is in some ways the centerpiece of this legislation in my mind is a bill I introduced with Senator Schumer, and I thank him for his work. This is a bill that facilitates going public. When a company reaches that point in its growth where--in order to grow further, in order to hire more workers, in order to expand--it needs to become a publicly traded company, we make it more affordable for more companies to do that, so they can do it sooner, they can grow sooner, they can hire the additional workers sooner.

We do it with what we call an onramp. It is a process by which a company--if it has less than $1 billion in sales, less than $750 million in market flow--such a company would be able to do a public offering without being subject to all of the most expensive parts of the SEC regulatory regime. They would be required to comply with a big majority of all of the existing reporting requirements, but there would be some pieces--especially section 404(b) of the Sarbanes-Oxley Act, which is extremely complex and expensive to comply with--they would not have to fully comply with that for 5 years or until they reached $1 billion in sales or $750 million in market flow, whichever came first.

So what we are doing with this part of the JOBS Act is we are giving small and growing companies an opportunity to grow into the ability to afford the most expensive regulation to which they would be subject. Nobody is exempted permanently. Everybody who goes public would be subject to the full panoply of regulations within 5 years or sooner if they grow faster, and it is only available to companies that have sales, as I said, of less than $1 billion. But that describes a great number of companies.

I can tell you from personal experience, when a company is approaching that threshold of asking themselves: Should we go public-- we could grow, we could use the capital, we could deploy it to hire more workers, we could make constructive use of it--they also have to weigh the cost. The cost of compliance right now is huge, and we have seen a huge dropoff in the number of IPOs. We have seen a huge extension in the period of time between the successful launch of a company and the moment they do an IPO. We have seen that lengthen dramatically since we passed Sarbanes-Oxley. It is, in part, because it is so expensive to comply.

So what we will be doing, if we pass this legislation today--which I certainly hope we will--is making it a little bit more affordable for companies to make that decision sooner, which means hiring workers sooner, which means growing sooner, which means more growth for our economy, more opportunities for all of the people we represent.

So I am very optimistic. I am very pleased that we have been able to pull together such broad bipartisan support--this overwhelming vote in the House, the endorsement of the President of the United States, the support and cooperation with individual Democratic Senators who have cosponsored key pieces of this legislation.

I do think it is equally important we defeat the Reed amendment so we do not actually go backwards in this process and have the unintended consequence of forcing currently private companies to become public against their will, forcing them to incur all kinds of costs that are actually counterproductive. If we can do that today, then I think we can pass this legislation. We know the President of the United States will sign it. We should do it as soon as we can. I wish to thank all my colleagues who played a role in advancing us to the point we are at today.

I yield the floor and I suggest the absence of a quorum.

Yes, that is my understanding. I thank Senator Hutchison for all of her hard work on the bank shareholder bill, and for clarifying this point.

Madam President, I claim the time in support of the legislation.

I suggest that we are on the verge of doing something very constructive for our economy, for small businesses, and for job growth, and it might be one of the most constructive things we are going to do this year in that area.

This legislation makes it easier and more affordable for young and growing companies to go public, to raise the capital they need to grow, to hire more workers. It also actually makes it easier for those who want to remain private and to attract more investors, and to do so without triggering the very onerous and expensive regulations attendant to being a public company.

This is going to create more jobs and more growth in the economy. That is why it passed the House with a vote of 390 to 23. That is why the President of the United States has endorsed this bill and said he will sign it into law. That is why there are dozens and dozens of organizations and groups and companies and trade associations that support this legislation, so that we can do something right here, right now, today, that the President will sign into law, which will help small and growing companies raise the capital they need to grow.

I urge my colleagues to vote yes.

I thank the Senator from Missouri and the Senator from Oregon for working together on this amendment.

Under current regulations, the States are essentially required to adopt rules that would force a family farmer who is driving a tractor across the street to follow the same kinds of rules and regulations that a cross-country long-haul truckdriver has to comply with in terms of hours of service and regulations and logbooks. It is a solution in search of a problem. It is costly. It is unnecessary.

I urge adoption of the amendment, and I yield back to the Senator from Oregon.

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