John Cornyn

Mr. CORNYN

Mr. CORNYN. Madam President, I wish to speak for a few minutes on the subject of energy. Particularly I wish to contrast the approach that has been taken by the administration with regard to the blanket moratorium on drilling in the Gulf of Mexico for at least 6 months--but who knows how much longer that will slip--and a better approach that I think will provide a way of promoting safety but also not kill jobs in the Gulf of Mexico, particularly in the Gulf States, including Louisiana, Texas, Alabama, and Florida. There is no secret about the fact that the blanket moratorium, which has been struck down by a Federal judge as unjustified by the rationale given by the administration, is now being appealed, so drilling activity has essentially halted--new drilling activity in the Gulf of Mexico. I think there is a better way to approach this. These ideas are actually included in the alternative we will be considering I hope as early as tomorrow. I think there is a better way to approach this. A few weeks ago I had the opportunity to fly from Sugarland, TX, 200 miles offshore into the Gulf of Mexico to a drilling rig called the Noble Danny Adkins. This drilling rig was sitting in 9,000 feet of water, and of course it was idle as a result of the drilling moratorium. When fully operational, it employs up to 200 people, but of course they weren't working because there isn't any drilling going on. This particular rig was scheduled to drill in more than 12,000 feet of water to a depth of 37,000 feet. It is one of dozens of rigs not doing any work today because of the uncertainty caused by the moratorium. I had a chance to talk with a number of the professionals who work on that rig, and I have to tell my colleagues my impression of being on an offshore rig was like my first experience going to NASA. It is that technically advanced and that impressive. The offshore drilling industry is a highly technologically advanced operation in which many very skilled professionals are working. These are typically high-paying jobs, as my colleague from Louisiana knows. My fear is that the blanket moratorium imposed by Secretary Salazar of the administration, unless it is modified in a more rational way, will destroy 50,000 jobs and up. We already know that the moratorium has caused two drilling rigs, offshore rigs--which cost an incredible amount of money to lease, and, of course, you can't afford to have them sit idle and not do what they are designed to do. What happens is with the moratorium attached, two of these rigs we know of moved to Egypt and one to the Republic of the Congo. Of course, with the departure of the rigs, the workers go too, and it is a big question as to whether those rigs and the jobs associated with them will ever return. But it is not just the people who work on the rigs such as the Noble Danny Adkins and the other rigs that are idle now as a result of the moratorium; it is the associated businesses that support the oil and gas industry in the Gulf of Mexico, such as Sunbelt Machine Works Corporation. This is a small family-owned business I visited which manufactures many of the tools that are actually used in deepwater rigs such as the one I visited in the gulf. We need to think of not just the impact on the people who work on these rigs but also everybody who supports those efforts, including the people who supply food, people who supply the machinery, people who fly, the people who work on those rigs. Everyone is impacted negatively by a blanket moratorium. My colleagues don't have to take my word for it. The Energy Information Administration recently projected that in addition to killing jobs, it will actually cost a lot more than that in terms of the domestic production of oil and gas that we will have to make up for by importing it from abroad. The dependency we have in this country, which is a true national security problem, would be exacerbated by this moratorium, because as long as America is going to continue to consume oil and gas, until we are able to develop new forms of energy in the future, as I hope we will, we are going to continue to consume oil and gas in this country. Right now, about 30 percent of the oil consumed in America comes from the Gulf of Mexico--30 percent. The Energy Information Administration recently projected that domestic production will decline as a result of the moratorium by an average of 31,000 barrels a day in the fourth quarter of 2010 and then by an average of 82,000 barrels a day in 2011. By December 2011, monthly oil production in the Gulf of Mexico will decrease by an average of 100,000 barrels a day. Assuming the economy picks up, as I hope it will, we know there is going to be demand for that oil which will need to be replaced and, of course, where does that come from but places which I know most of us would rather not have to do business with: Venezuela, to mention one. The Louisiana Mid-Continent Oil and Gas Association estimated last May that the impacts of the moratorium were estimated to be 80,000 barrels of production loss per day . That is what they estimated for 2011. They estimate up to 37,000 jobs will be lost, and $7.6 billion in future government revenue will be put at risk. That is the effect of this blanket moratorium. I wish to talk about a better solution, I believe, that was offered in the energy legislation Senator McConnell introduced last Thursday which incorporates this approach. I also wish to talk for a minute about the attempts to basically make it impossible for independent oil and gas companies from working in the Gulf of Mexico. How do you do that? Well, it would be by raising the liability cap, or by removing it entirely, thereby making it impossible for independent oil and gas companies to work in the Gulf of Mexico because they, frankly, can't afford the insurance for unlimited liability. Under the current regime, there is a limit of individual liability up to $75 million and, above that, 8 cents on every gallon of oil imported into the United States or produced in America goes into an oilspill trust fund which is then used to pay for anything not covered by the $75 million liability for the company. Well, if, as some of my colleagues have proposed, we eliminate that cap, it makes it impossible for smaller companies--these independent oil and gas companies--to operate in the Gulf of Mexico or anywhere else. They simply will go out of business or take their operations elsewhere if they can. Let me give my colleagues an idea of what the job impact on that would be. In 2009, independents accounted for more than 200,000 jobs and $10 billion in State and Federal taxes and royalty payments. As my colleague from Louisiana knows, because she was one of the principal negotiators, we were able to get royalties which actually go to the Gulf Coast States for the incidental impact of oil and gas operations in the Gulf of Mexico. Of course, all of that income will be lost, together with the royalty that would be paid to the U.S. Treasury, as a result of the moratorium and certainly by chasing off these independents. The study forecasted that by 2020 this would eliminate 300,000 jobs and cost $147 billion in Federal, State, and local taxes from the gulf region. The study also concluded that if independent oil and gas companies are excluded from deepwater oil and gas operations, the job loss would be 265,000 by 2020 and $106 billion in lost tax revenues over the 10- year period. Of course, we know other countries are delighted with this moratorium because it means these rigs and these operators are moving to these other countries, creating jobs there and producing oil and gas from there. For example, a recent Washington Post article reported that Brazil, Canada, Nigeria, Angola, and Libya are among the countries that are moving forward with drilling, lured by oil reservoirs they are discovering that are two to six times as big as the average Gulf of Mexico reservoir. As I mentioned, once these rigs leave the United States, leave the Gulf of Mexico, they go to places with far less stringent regulatory controls than we have here in the United States, so actually the risk of an environmental disaster is greater in these countries that have far more lenient regulatory regimes. In fact, the moratorium has the perverse effect on safety as the newest and most expensive and most technologically advanced rigs move overseas to work while the less-in-demand older rigs stay behind. I mentioned there is a better alternative than a blanket moratorium such as the administration has proposed, and unlimited liability exposure which will basically chase off most of the independent oil and gas companies as proposed by the legislation that we will be considering tomorrow. My trip to this rig and my visits with these workers and these experts in producing this domestic energy source have made me even more convinced that it is an absolute mistake and really, frankly, not very smart, to essentially cut off our domestic oil and gas production from the gulf. Senators Vitter, Wicker, and I have introduced legislation which would lift the Obama administration's blanket moratorium and instead would require companies to go through new safety inspection requirements and then to be certified by third parties, after which the Department of the Interior would have to issue a permit for continued exploration and development of our domestic oil and gas reserves in the Gulf of Mexico. Our legislation would essentially limit the moratorium and make it easier for good-faith and conscientious operators who are in compliance to get their permits approved quickly and keep the rigs and jobs here at home. Our approach would ensure that operators who are in compliance with safety guidelines have some deadline on when their permits would be considered and keep gulf coast residents, and particularly those who work in the oil and gas industry, at work, and continue to produce American energy and not make it necessary for us to continue to buy that additional amount, in addition to what we already are purchasing, from abroad. Instead of reconsidering this devastating moratorium, though, I know the majority leader has introduced a bill that would have the Secretary of Energy publish a monthly study evaluating the effect of the moratorium. Well, I have to say we don't need a study to know what the effect of the moratorium is in Louisiana and in Texas, in Alabama and along the gulf coast, because we already know its devastating impact. I wish to invite my colleagues, any of them who wish, to come and talk to some of the folks who work in this industry and to look at the sophistication and the technological expertise that they employ in producing oil and gas in the Gulf of Mexico. I would be glad to help host them. One example, though. A seismic company in Texas is spending $250,000 a day under a contract with the leaseholder to explore a potential area for oil and gas, but the seismic company can't even get a permit to do the work. I don't know how long they can hold on, how long they can continue to keep people on their payroll if they don't have any work to do. Something has to give. These hard-working folks who live along the gulf coast don't want to wind up as another statistic on a monthly report on the impact of the moratorium, nor do they want to add to the 9.5 percent unemployment in this country, higher even in some parts of the country; as high as 14.2 percent in Nevada. They want to work. They don't want to collect unemployment benefits. They want to work, and they want to provide for their families. I think they deserve better from their elected officials than this blanket moratorium or job-killing policies which are going to basically move their jobs overseas. The fact is we need to maintain our position in the gulf. Eighty percent of oil produced in the Gulf of Mexico comes from deepwater reserves now off limits due to the moratorium. Without this activity, production will fall as much as 100,000 barrels a day by December 2011. To put this into perspective, the United States uses almost 20 million barrels of oil a day and produces nearly 5 million barrels a day, obtaining the rest from imports. The moratorium will not only destroy tens of thousands of jobs; it will leave us more dependent on foreign oil and gas, raising the cost of any products shipped and transported, not to mention travel. I think Jay Leno basically had it right when he said: President Obama said today he is going to use the Gulf disaster to immediately push a new energy bill through Congress. I've got an idea. How about first using the Gulf disaster to fix the Gulf disaster? That ought to be our focus--preventing recurrences such as we have seen in the gulf--and I think we can do that by the safety inspection mechanism and third-party certification and let's get on with the production of oil and gas from American sources, rather than having to bring it in from abroad. We need to focus on the problems and look at solving these problems and not use these disasters as a reason to exploit them and to grow government and kill jobs in the meantime. America's energy security will continue to depend on oil and gas for the foreseeable future. As much as I like the idea that we are developing new energy resources--Texas, for example, produces the most electricity from wind sources of any State in the country--we know that developing these alternative sources of energy is still going to be a long time coming. We need to bridge into that new energy future, and that bridge will continue to consist of American-produced oil and gas. The question is, Will it be to the benefit of the American people in the form of good-paying jobs and associated revenue or will the misguided policy, included in the bill introduced by the majority leader, ensure that we merely increase our imports that we need and send the good jobs and rigs overseas by this misguided policy? I hope my colleagues will reconsider this misguided approach that would drive independent oil and gas producers out of the Gulf of Mexico by making it financially impossible for them to purchase the insurance they need in order to comply with an uncapped liability. We know the resources will remain there in the case of another disaster, which we hope and pray will never occur because of the oilspill liability trust fund--again, funded by 8 cents on every barrel produced in America, as well as every barrel imported from abroad. So this isn't eliminating a fund that will actually pay in the event of another catastrophe. Certainly, we don't ground all airplanes in America or around the world when there happens to be a terrible airplane crash. We look at the problem and try to make sure we understand the reason why it happened, and then we move on and continue flying. I think the oil and gas industry basically operates the same way. We need to make sure we understand what happened in this spill, do everything humanly possible to make sure it never happens again and make sure BP is held accountable and pays for all the cleanup that needs to be done as a result of this unfortunate incident. But the conclusion we should reach should not be let's shoot ourselves in the other foot by denying ourselves access to American energy and increasing our dependency on imports from abroad and, at the same time, kill jobs along the gulf coast in the oil and gas industry and all those companies and businesses that support the oil and gas industry during a time when unemployment is already at 9.5 percent. We can do a lot better than what the majority leader's bill proposes and continuing job-killing policies. We can actually do it smarter and better and come up with a real solution rather than creating more problems. I yield the floor and suggest the absence of a quorum.

Mr. CORNYN

Mr. CORNYN. Madam President, how much time remains on our side?

Mr. CORNYN. Reserving the right to object, I ask that another couple minutes be added to our time. If that is OK with the Senator from Minnesota, I have no objection.

Mr. CORNYN

Mr. CORNYN. Madam President, I am going to talk about the so-called DISCLOSE Act that we will vote on this afternoon at 2:45. Of course, this is a cloture vote which will require 60 votes to proceed to the bill. At the time the cloture motion was filed, the bill was so new that it was not even available on the Senate's Web site. Unfortunately, this represents a trend where we have seen legislation come to the floor that is so new and unavailable to the American people to read that they are left to wonder what actually is in the bill. This particular version of the bill was introduced less than a week ago. Sadly, I have concluded that this bill represents another attempt by my colleagues to push through legislation without adequate time for deliberation and review. In this case, it has pretty dramatic and dire consequences. It will reduce freedom of speech in a way that is inconsistent with the first amendment of the U.S. Constitution, it creates more Federal regulation, and it does not give the American people the opportunity to review the legislation and to weigh in because they cannot understand what are the ramifications. So in the short time we have between now and 2:45, I would like to weigh in a little bit to hopefully inform anyone who is listening what this particular piece of legislation will do. I fear that what this legislation does, in sum, is to protect incumbents--protect incumbents--which is not the type of legislation that I think most of our constituents would want to see us pass. I believe they would prefer legislation, if any legislation would be necessary, that would not restrict freedom of speech but would encourage freedom of speech and more political participation in our elections and the process. But this bill doesn't do that. This bill protects incumbents by suppressing the speech of some while letting other speakers speak without any limitation whatsoever. In other words, what this bill does is it picks winners and losers in the political speech contest--something the first amendment does not allow us to do. I would also say that in the rushing to judgment on the part of the proponents of this bill, we are left to speculate as to what impact the Citizens United decision by the U.S. Supreme Court will really have and whether for-profit corporations will actually use this decision to spend money in elections. I happen to believe there is very little chance most corporations' shareholders will allow their money to be spent for the purpose of advertising on issues in upcoming political elections because they are going to either want the money returned in a dividend to the shareholders or they are going to want money invested to create a growing business and to create a better return on their investment. They are not going to want their money used for the purposes for which the proponents of this legislation fear, in my view. The fact is, this bill will fundamentally remake the rules and regulations governing the exercise of free speech in American elections. We should be extra cautious in legislating in this area for three reasons: First, regulation of speech always raises significant first amendment considerations. The first amendment is the cornerstone of our democracy. Political speech about candidates for elected office is at the core of the values protected by the first amendment. Second, regulation of campaign speech often comes with unintended consequences. Back in 2002--I wasn't here at the time--the Bipartisan Campaign Reform Act was passed. It was also known as the BCRA or McCain-Feingold. I believe it was passed with the very best of intentions, but it has not prevented the exponential increase in the amount of money spent in elections in America since that time. In the 2008 election cycle, President Obama and Senator McCain raised and spent nearly twice as much money as President Bush and Senator Kerry did in 2004--almost twice as much in 4 years. In fact, together, the two Presidential candidates in 2008 spent more money for the general election than did all the Presidential candidates between 1976 and 2000 combined. The so-called Bipartisan Campaign Reform Act of 2002 has also led to another unintended consequence: it has led to a proliferation of interest groups using section 527 of the Internal Revenue Code or some other provision of the law to pour massive amounts of money into campaigns with even less transparency than has existed before. The third reason we should be especially careful when regulating political speech is that Senators have an inherent conflict of interest. Our jobs depend on the rules surrounding campaigns and elections, so there is a natural temptation by the Senate majority to change the rules in a way that helps its own chances of reelection. The question is, Does this bill resist that temptation to rewrite the rules to benefit the majority party, to protect incumbents, or does this bill succumb to that temptation? I submit that this bill succumbs to that temptation in the haste to push through rules that will protect, in the view of the proponents of this legislation, incumbents in the election that will be held almost 100 days from now. This bill would silence critics of the majority party--it is that simple--and it would protect the closest allies and special interests aligned with the majority party. This bill treats similarly situated parties differently. That is what I mean by picking winners and losers. It would silence businesses with some foreign shareholders, but it would protect unions with significant foreign membership. It would silence businesses with government contracts, but it would protect unions of government employees and unions that work on those same government contracts. It would silence companies that have received TARP funds but protect the unions that represent those same companies' employees. Labor unions aren't the only allies of the majority party to receive special treatment in this bill. The bill protects limited liability partnerships and other business models favored by the legal profession. It creates carve-outs reminiscent of what we saw happen in the health care bill with the ``Louisiana purchase'' and the ``Cornhusker kickback.'' It creates a carve-out for the largest, wealthiest, and most powerful Washington-based special interest groups, such as the National Rifle Association and the American Association of Retired Persons, AARP. The bill also tends to favor large businesses over small businesses and Washington-based interest groups over grassroots interests. How does this bill do that? Well, simply because it creates such a Byzantine labyrinth of regulations and disclosure requirements that only large organizations with the money to hire the very best lawyers will be able to figure out how they can exercise their first amendment rights. There are enough loopholes that a corporation or a union large and sophisticated enough to set up the right legal structure can continue to speak and spend money to exercise their first amendment rights, but a small business or a grassroots group of citizens is unlikely to have either those sorts of political connections or the money to be able to hire the specialized expertise to allow them to navigate this labyrinth. And if you can't afford to comply with the bill's onerous regulations, then you are not allowed to speak at all. Why are some of my colleagues supporting the bill? I can think of two reasons: First, some of my colleagues fear the righteous judgment of the American people in this coming election on November 2. They are trying to change the rules in the middle of the game to suppress the speech of those who might disagree with these incumbent Senators who are standing for reelection so that the American people won't have all sides of the story when they go to vote on November 2. Bradley Smith, a former Chairman of the Federal Election Commission, put it this way. He said the so-called DISCLOSE Act should stand for the ``Democrat Incumbents Seeking to Contain Losses by Outlawing Speech in Elections''--the DISCLOSE Act. Second, it is clear that some folks in Washington just like suppressing speech they do not agree with. Other attempts have included asking citizens to forward their neighbors' criticisms about the administration to the White House e-mail account--remember when that happened--and sending cease-and-desist letters--this is something the administration did during the health care debate--to companies that criticized their health care bill. And of course there have been well- documented efforts to bring back the so-called Fairness Act, which is anything but. I don't know, though, whether my colleagues who are pushing this bill are doing so in order to protect their political power or, frankly, in an arrogant display of disdain for the views and opinions of the American people--the kinds of views we have seen displayed at townhall meetings, at tea party rallies, and other spontaneous movements around this country. It is absolutely the fact that the first amendment was written to protect freedom of speech, even the speech we don't like and don't agree with. I believe the first amendment of the U.S. Constitution and freedom of speech have made us stronger and freer and has helped inform policymakers so that we can make better decisions because we have considered all points of view. But whatever the reason the proponents of this bill have for offering this bill, I would point out--and I don't think it is a coincidence-- that the chief House proponent is the current chairman of the Democratic Congressional Campaign Committee and the chief proponent in the Senate is the former chairman of the Democratic Senatorial Campaign Committee. I don't think that is coincidental. Whatever the reason, I oppose this bill, and I urge my colleagues to oppose this afternoon's cloture motion. I yield the floor.

Mr. CORNYN

Mr. CORNYN. Madam President, in 160 days, the American people will experience the single largest tax increase in American history unless Congress acts. Unless Congress acts, the highest individual tax bracket will rise from 35 percent to just under 40 percent. People in the lowest tax bracket will see a 50-percent increase from 10 percent to 15 percent. The marriage penalty will go up. The child tax credit will be cut in half. Taxes on capital gains and dividends will go up as well. Every single taxpayer in the country will see their taxes go up. Last week in the Senate Finance Committee we heard testimony from several experts about what these huge tax increases would mean in terms of the economy and to small businesses. Douglas Holtz-Eakin, former head of the Congressional Budget Office, reminded us that about $1 trillion in business income will be reported on individual tax returns and about half of that will be subject to the two higher marginal individual tax rates. There has been a debate--and I guess it will go on--about the relationship between the bipartisan 2001 and 2003 tax relief bills and the deficit. Some on the other side of the aisle like to argue that our $1 trillion deficits today are the result of tax relief we offered 10 years ago. They also like to argue that they bear no responsibility for the deficits they ``inherited.'' We are hearing a lot about that these days, very little taking responsibility for what has happened today but, rather, preferring to point the finger of blame at others in the past. I have a chart which, if Members will bear with me, tells an important story. This chart measures the deficit as a percentage of our gross domestic product which is the entire economy. The solid lines, the red solid line and the solid green line, represent the historical record from the OMB. The dotted line represents CBO projections of the President's 2011 budget. The red line and a portion of the light green line also represent the record before the Obama administration took office, and the solid, dark green line represents the record since President Obama became President. What does this chart tell us? It tells a very interesting and important story. It is true that deficits went up under the last administration and topped out at 3.5 percent of GDP. Of course, we have to remember the dot.com bubble, the recession that occurred about the time the last administration took office and, of course, the horrific events of 9/11. But then, just as the 2001 and 2003 tax relief provisions started to kick in, a strange thing happened to the deficit. It went down to $318 billion in fiscal year 2005. It went down again to $248 billion in fiscal year 2006. And it went down to $161 billion in fiscal year 2007. That is when our deficit went all the way down to 1.2 percent of gross domestic product, from 3.5 percent to just 1.2 percent of GDP. People may have different interpretations for why this happened. I believe--and I think most economists and objective observers conclude-- the reason the deficit went down as a percentage of gross domestic product was because the tax relief we passed in 2001 and 2003, which will expire in 160 days unless we act, helped grow the economy and got about 8 million people on the payroll between 2003 and 2007. Not an incidental; it generated a lot more revenue for the Federal Government. As a matter of fact, it hit historic levels. That is the real record on the deficit. For my colleagues who claim they inherited a bad fiscal situation, this is what they inherited: a deficit which had reached one of the historic lows of 1.2 percent. The green line here actually shows what has happened since our colleagues on the other side took control of this Chamber and the House of Representatives. The deficit shot up from 1.2 percent to 3.2 percent of GDP in fiscal year 2008. That was the last year President Bush was in office. Then went to 8.3 percent in fiscal year 2009. Am I blaming my colleagues for this? I am saying there is more than enough blame to go around. But it is also not fair to suggest that previous administrations or one political party contributed to this increasingly dire fiscal crisis. The reason the deficit rose after 2007 is because of the financial crisis that occurred, the meltdown, particularly in September of 2008. We know the recession we have been going through and, of course, the emergency measures that Congress passed on a bipartisan basis to try to prevent a systemic economic collapse in America--and other countries around the world participated in as well--these emergency measures were supported by then-Senator Obama, then-Senator Biden, and by dozens of colleagues on the other side of the aisle, as well as colleagues on this side of the aisle. We thought we were acting in a major crisis, and we were. My point is, the deficits we have today were not inherited deficits but, rather, because of legislation they helped enact. Beginning January 20, 2009 this Congress and the President delivered much higher spending. Colleagues will recall the much ballyhooed stimulus package, $862 billion of borrowed money, which was supposed to keep unemployment below 8 percent. Obviously, that failed in its stated goal since unemployment has been almost up to double digits, now 9.5 percent. In places such as Nevada, it is 14.2 percent. In Michigan and other States, it is much higher. Obviously, the stimulus did not succeed in its stated goal. One thing it did succeed in doing is piling on additional debt on future generations unless we deal with it in a responsible way. What happened as a result of the unprecedented spending we have seen since the Obama administration came into office? We see now that the fiscal year 2009 deficit as a percentage of the gross domestic product rose from an initial 8.3 percent to 9.9 percent, from 1.2 percent in fiscal year 2007 all the way to 9.9 percent. The second important thing to notice about this green line is that it will never get back to the level under a Republican Congress. The highest deficit level under a Republican Congress was 3.5 percent in 2004. Under President Obama's budget, we will never get back to that level, even though it includes several, what most people would conclude are optimistic assumptions about future employment and economic growth. Even under those rosy scenarios, it will never get below 4.1 percent of gross domestic product. Once it gets there, the deficit continues to rise indefinitely. Some of my colleagues have said they want to make this election in November about a choice. That is fine with me. To me, the choice on fiscal discipline comes down to this: Do we want deficits that are getting lower such as the red line we see here, dropping from 3.5 percent down to 1.2 percent, or do we want deficits to get higher, such as the dark green line we see here, all the way up to 9.9 percent? The truth is the dark green line is not just an inferior choice, it is an unsustainable choice. Last month our national debt topped $13 trillion, up $2.3 trillion since President Obama took office. The CBO reported that our public debt will reach 62 percent of gross domestic product by the end of this year and will be 90 percent of our economy in only 9 years. We are on a budget path that will add $9 trillion in additional debt over the next decade. While some of my colleagues want to let the tax relief we passed starting 10 years ago expire on January 1, we simply cannot tax our way to fiscal solvency. Again, according to the Congressional Budget Office, if spending is off the table--in other words, if we wanted to eliminate the deficit just as a result of tax increases--we would need to raise taxes by 25 percent to create a sustainable fiscal path for the next 25 years. Can Members imagine what a 25-percent increase in taxes would mean to hard-working American families, small businesses, what that would do to job creation, what that would do to the 9.5 percent unemployment rate we see today? It would make it worse, not better. Tax increases alone don't solve the problem of trillions of dollars in unfunded liabilities in our entitlement programs either. They don't deal with the fact that Medicare is $38 trillion short of its promised benefits and now is expected to go insolvent by 2016. Social Security will pay out more in benefits than it receives in payroll taxes this year. Yet the CBO has also estimated that individual income tax rates would have to rise by 70 percent to balance the budget while financing the projected spending growth in Medicare and Medicaid. That is assuming no other tax increases or spending reductions in the budget. That is based on our budget outlook for 2007, which has obviously deteriorated since that time. That is based on a pretty optimistic estimate on how fast spending will grow in these two programs, just 1 percent higher than the gross domestic product growth, even though these programs have averaged growth of about 2.5 percent more than gross domestic product over the last 40 years. I do have some good news about our fiscal situation. The American people get it. That is why they believe spending and debt are two of the most important issues they want the Federal Government to address. The American people also understand intuitively the importance of keeping taxes low and what this huge tax increase that would occur, the largest in American history unless Congress acts, would do to the fragile economy and to high unemployment and to slow job creation. According to a CBS News poll last week, when asked whether government spending or tax cuts would be better in terms of getting the economy moving, Americans preferred tax cuts by 53 percent to 37 percent. That is a 16-point deferential. Independents actually favored tax relief by 20 points. My conclusion is, we need to listen to the wisdom of the American people. We need to stop lecturing them. We need to make permanent the tax provisions we passed in 2001 and 2003, not to advantage individuals but to continue economic growth, to continue our ability to reduce the deficit, because people are working and paying taxes and our economy is growing. The most important message we can send to the small businesses and the job creators in America, when unemployment is at 9.5 percent nationally, is we are not going to increase their financial burdens in addition to the health care bill that was passed and other onerous burdens which have actually constrained job creation and create more uncertainty. We are going to actually encourage job creation by keeping taxes within reasonable limits while at the same time exercising some financial restraint by cutting spending and dealing with this burgeoning debt and burden on the American people. I yield the floor.

Mr. CORNYN

Mr. CORNYN. Madam President, there are a number of think tanks--and I will allude to just one--that have come up with a strategy to do what needs to be done to deal with visa overstays. I refer to a Backgrounder, published by the Heritage Foundation, dated January 25, 2010, entitled ``Biometric Exit Program Shows Need for New Strategy to Reduce Visa Overstays.'' I think we need to put our best minds together and devote our efforts to dealing with this problem. Just like our broken border, unless Congress and the Administration come up with a credible plan to deal with this problem of visa overstays, I don't think the American people will have the confidence they demand and are entitled to when it comes to enacting a credible immigration enforcement program. I thank the Chair and yield the floor. Exhibit 1 U.S. Senate, Washington, DC, June 22, 2010. Secretary Janet Napolitano, U.S. Department of Homeland Security, Nebraska Avenue Complex, Washington, DC. Dear Secretary Napolitano: Last week, the media reported that 17 Afghan military officers had gone Absent Without Leave (AWOL) from a Defense language training institute at Lackland Air Force Base in Texas. Needless to say, I was deeply disturbed by this report and by the fact that I had not received official notification from either the Departments of Defense or Homeland Security. On Friday, I sent a letter to Secretary of the Air Force Michael Donley requesting an immediate explanation and report on how such a serious violation of security occurred, as well as an assessment of the potential threat posed by these 17 officers. In statements to the media, the Air Force stated that they work in close coordination with DHS and ``[w]hen the Defense Department learns an international student has gone missing, DHS Immigration and Customs Enforcement is immediately notified and appropriate action is taken.'' I have been informed by ICE the majority of these missing Afghan officers have not been located. According to the recent media reports, these Afghan officers disappeared over a 2-year period. Two years is a significant period of time and I find it alarming that we are still unable to locate these officers in the United States. I recognize that tracking visa overstays in the United States is a challenge. However, I continue to see a disturbing pattern that began with Ramzi Yousef and the 1993 World Trade Center bombings, came to fruition with the 9/11 hijackers, and has continued recently with Hosam Maher Husein Smadi's planned attempts to bomb of a skyscraper in Dallas, Texas--terrorists using legal visas to gain entry into the United States with the clear intent to overstay and do harm. The 9/11 Commission pointed out this area as a vulnerability and the Government Accountability Office (GAO) has echoed concerns about visa overstays and our ability to track and remove them from the United States. According to one study, the number of current overstays in the United States ranges anywhere from 4.5 million to 6 million, approximately 40 to 50% of the total illegal immigration population. Overstays come from every continent, and from many nations known to harbor terrorists, including Iraq, Iran, Afghanistan, Pakistan, Syria, and Sudan. Given that this number is growing each year by approximately 300,000 additional aliens, it is imperative that your Department make identifying and removing visa overstays a national priority. In a public statement, ICE indicated that they notified the U.S. law enforcement community about the missing officers and had ``no information that any of these individuals pose a national security threat.'' As you can imagine, I am not assured by this statement, especially given the fact that these officers remain at large in the United States with their whereabouts unknown to the U.S. government. I view this situation as a clear security failure that needs to be remedied immediately. I would appreciate a response as soon as possible on how you intend to locate these officers immediately and remove them from the United States. I would also ask that you provide me with the Department's strategic plan to deal with visa overstays. Sincerely, John Cornyn, U.S. Senator.

Mr. CORNYN. Madam President, last week the media reported that 17 Afghan military trainees had gone AWOL--absent without leave--from the Defense Language Institute at Lackland Air Force base in San Antonio, TX. The shocking thing about this is not that 17 Afghan trainees left the military base without leave, but that we hadn't heard anything about it. Even though these officers went missing over a period of 2 years, neither the Department of Homeland Security, the U.S. Air Force, nor the Department of Defense notified me. No one advised the Congress or the American people, to my knowledge, that this had happened. Obviously, it created a lot of consternation and concern. The fact is, this is just one example--really the tip of the iceberg--of some of the problems with our broken immigration system-- our inability to track individuals who come into the United States with visas, whether it is a tourist visa, a student visa, or a visa like those issued to the Afghan military officers. We have virtually no ability to track individuals who overstay their visa and then simply choose to melt into the great American landscape. This is true in spite of the fact that in 2007, Congress passed on a recommendation of the 9/11 Commission, which highlighted visa overstays as a potential national security threat to our country. All we have to do is recall people like Ramzi Yousef, the mastermind of the 1993 World Trade Center bombings, an example of people who came into the country and overstayed their visa. The recent attempt of a would-be terrorist to bomb a skyscraper in Dallas, TX, is another example of people who enter the country legally and do so with the clear intent to overstay their visa and do us harm. Congress passed a law in 2007 that required the Department of Homeland Security to come up with a plan by June 2009 to track every entry into the country pursuant to a visa and biometrically track those individuals who overstay their visas. Obviously, that has not happened yet or else the Department of Homeland Security would have been able to track the 17 Afghan military officers. As far as we have been informed, we don't have clear information as to exactly where all of these individuals are. We have talked a lot about border security, and appropriately so, particularly in light of the exploding violence in Mexico and the cartel drug wars that have killed 23,000 people since 2006. Many have expressed concerns that our borders, which are still too porous, will allow people to come across but not just people who want to work. Our porous borders will allow people to enter who want to smuggle drugs, smuggle weapons, and who potentially want to do us harm. Last year alone, about 50,000--or closer to 45,000 individuals from countries other than Mexico--so-called OTMs--have been detained coming across our southern border. These OTMs have come from countries such as Somalia, Yemen, Afghanistan, Iran, China--you name it. The southern border is being used as a means to enter our country without detection and in violation of our laws. The problem I wish to highlight today is that apparently the Administration is just now waking up to this danger along our border. I say that because only in the last couple of days, the President has requested an emergency supplemental appropriation of $600 million for southern border enforcement. Unfortunately, in spite of the fact that it is a large sum of money, it simply does not go far enough. Recently, I introduced a border security amendment that was defeated--even though it got a majority vote, but didn't get the 60 votes it needed to pass. It was on the Defense supplemental appropriations bill. It would have been paid for; it was not deficit spending. It would have provided an additional $2 billion to make up for shortfalls in funding to Federal, State, and local agencies that are on the front line and need that funding to get the job done. Some critics have said that Members of Congress have focused too much on border security and that the real solution is to pass a comprehensive immigration reform bill. I disagree. Until we have credible border security and a credible system of tracking visa overstays, the American people are simply not going to believe we have either the credibility or the competence to enforce whatever law we pass. All you have to do is to look at where we find ourselves now. You also need to look back to 1986, when President Ronald Reagan signed an amnesty for 3 million people. He did so premised on the belief that we were actually going to pass an immigration law that could be and would be enforced. We know, from our sad experience, that even though an amnesty was adopted, enforcement did not follow. That is why I say the American people simply don't believe we have the credibility or even the competence, as demonstrated so far, to get the job done. I don't think the American people believe we have done a good job of controlling illegal immigration, let alone national and domestic security. If Washington was doing its job, we would not see States such as Arizona and Nebraska passing laws trying to deal with immigration at the State and local level. If Washington was doing its job, we would not continue to hear about the many illegal immigrants who have committed heinous crimes in the United States and who have been deported multiple times, only to reenter the United States and commit further crimes. If Washington had been doing its job, we would not continue to hear about terrorists exploiting our lax immigration enforcement--terrorists who are in this country right now trying to do us harm, such as the Christmas Day bomber, who had a valid visa-- amazing as it sounds--and the foreign national who overstayed his visa who I mentioned a moment ago, who tried to blow up a Dallas skyscraper recently--a plot foiled by the FBI. I believe we need credible immigration reform, but first we need to demonstrate to the American people that we are serious about border security by making sure the resources--both the boots on the ground and the technology--are in place to help, as a force multiplier, provide the kind of border security that will allow us to know with a much greater certainty who is coming into the country and why they are here. The other component of our nation's security has to do with the visa overstay issue, which is a huge part of the problem. Put another way, even if we were able to secure the border today and know with certainty who was coming across our southern or northern border and what their purpose was for entering, we would still have a huge, gaping hole in our immigration enforcement system because of the problem of visa overstays. Most Americans probably don't realize that between 40 and 50 percent of the people who have come into the country and who are here without a valid visa--an estimated 4.5 to 6 million people--are visa overstays. In other words, they came in legally but simply ran out the clock and overstay their visa, and now they have attempted to just melt into the American landscape. Unfortunately, notwithstanding the recommendations of the 9/11 Commission and Congress's mandate to the Department of Homeland Security to come up with a way to biometrically track visa overstays coming in through our airports--the Department of Homeland Security still has yet to come up with a credible and workable solution to deal with this very real problem. We know the visa overstays come from countries all around the world, not just Mexico or countries to our south. These overstays come from places such as Iraq, Iran, Pakistan, Afghanistan, Syria, and Sudan. It seems just as plain as the nose on my face to say that America's security depends on our tracking not just people who illegally come over the border, but also those who come in legally and then illegally overstay their visas. Our failure to track visa overstays and enforce our immigration laws has already put our country in jeopardy. I mentioned some of the examples a moment ago. The World Trade Center mastermind was a visa overstay. The 9/11 hijackers, lest we forget, were visa overstays, people who came in under false pretenses as students, only to try to do our Nation harm and then killing thousands of people in the process. I mentioned the Dallas office tower attempted bomber, who was a visa overstay. Most recently, the 17 Afghan pilots in training at Lackland Air Force Base in San Antonio, TX, my hometown. These were visa overstays. Yet when you ask the Air Force, the Department of Defense, and the Department of Homeland Security where they are now and what they are doing, we have yet to get a comprehensive and complete report. Why? Because the U.S. Government simply doesn't have a workable and effective and efficient means of tracking people who come into the country legally on a temporary visa but then choose to overstay. Foreign nationals overstaying their visas is not a new issue, but, as we have seen, it can be a national security issue. Even the Department of Homeland Security, the Government Accountability Office, the Pew Hispanic Center have highlighted the number of overstays in the United States. Like its predecessor, the Immigration and Naturalization Service, the Department of Homeland Security has a real inability to track down and remove aliens who overstay their visas. Each year, approximately 300,000 foreign nationals who come to the United States legally, overstay their visa. That is 300,000 a year. My amendment, which was defeated last month by a narrow vote, would have given the U.S. Immigration and Customs Enforcement the personnel and money needed for additional investigators, detention officers, and detention space. We need a plan, our government needs a plan from the administration to enforce our immigration laws regarding visa overstays or the American people will continue to see threats to our national security materialize before their very eyes. Madam President, I ask unanimous consent to have printed in the Record my letter to Secretary Napolitano at the conclusion of my remarks.

Mr. CORNYN

Mr. CORNYN. Mr. President, I yield the floor.

Mr. CORNYN. Mr. President, the terrorist group Hamas, which is supported by Iran, took control of the Gaza Strip in 2007. When Hamas did so, Israel put in place a legitimate and justified blockade of Gaza out of concern for the safety of its citizens. Hamas and its allies have fired more than 10,000 rockets and mortars from Gaza into Israel since 2001, killing at least 18 Israelis and wounding dozens of others. The Israeli defense minister said this week that Israel considers the Gaza Strip to be essentially an Iranian military base, just 3 kilometers from an Israeli town and 60 kilometers from Tel Aviv, Israel's second largest city. The Israeli blockade has been effective in reducing the flow of weapons into Gaza and the firing of rockets from Gaza into southern Israel. Were Iran and other supporters of Hamas allowed access to the ports of Gaza, the people of Israel would be put directly in harm's way. On May 27, the Israeli Navy, maintaining the integrity of the blockade, intercepted the so-called ``Free Gaza'' flotilla and peacefully boarded five of the six ships. The sixth ship was filled with extremists whose stated intent was martyrdom. Those extremists brutally attacked members of the Israeli Navy, who were forced to act in self-defense and, in some instances, use lethal force. Although Israel was exercising its right to self-defense, which every nation is entitled to do, the incident raised an international outcry, just as it was designed to do. Some even condemned the actions of the Israeli Navy. The ``Free Gaza'' flotilla was a disgraceful and premeditated attempt to break the blockade and provoke a violent confrontation with Israel, hidden under the cloak of a humanitarian relief effort. This type of despicable conduct must be condemned, especially by friends and allies of Israel. Every country has the right to defend itself, and Israel is no different. The calls from United Nations leaders and others for an investigation into the actions of Israel have been troubling. In my view, these calls have served only to question Israel's right to self defense. To its credit, Israel has unilaterally established a five-person panel to conduct an investigation into the flotilla incident, and its work will be monitored by two foreign observers. Yet U.N. officials are not satisfied and continue to push for a separate, international probe into the incident. As such, I believe the U.N. is unfairly singling out Israel for criticism and using a double-standard. According to news reports, there may be new flotillas literally looming on the horizon, preparing to challenge Israel's legitimate sea blockade of Gaza. Iran's ``Children of Gaza'' flotilla may set sail for Gaza as soon as this weekend, according to the spokesman for the Iranian Red Crescent. Iran has directly bolstered Hamas' ability to strike Israel, and its leaders have repeatedly called for the destruction of Israel. Now, they may be sending ships. No good can come from this. Furthermore, another group in Lebanon has announced its intention to sail its ships toward the Gaza blockade soon. Hassan Nasrallah, the leader of the terrorist group Hezbollah, has called on Lebanese citizens to help break the blockade of Gaza. So, Israel has legitimate concerns that this flotilla might be used to smuggle weapons into Gaza. I only hope the Lebanese government will do the right thing and put a stop to it. At a time of great instability in the Middle East, these flotillas serve only as additional destabilizing forces. The Middle East does not need further violence. Israel has the solemn right to defend itself and its citizens against these flotillas and any other security threats, which continue to gather. Israel needs friends more than ever right now. Mr. President, I have offered a sense-of-the-Senate resolution which does a number of things: First, it reaffirms the United States' strong support of Israel, our friend and steadfast ally. It expresses the sense of the Senate that Israel's right to self-defense is inherent and undeniable. It condemns the violent attack and provocation by the extremists aboard the Mavi Marmara and any future attempts to break Israel's legal blockade of Gaza. It condemns Hamas for its failure to recognize Israel's right to exist, and the Government of Iran for its support of Hamas and its undermining of Israel's security. This resolution also encourages the Government of Turkey to recognize that continued strong relations with Israel are of the utmost importance. The resolution supports our friend and ally, Israel, and it does so unequivocally. By passing this important resolution, the Senate will help remind the world that the United States stands with our ally--Israel. Mr. President, there are 14 Senators who have cosponsored this resolution, and at this point I ask unanimous consent that the Foreign Relations Committee be discharged from further consideration and the Senate now proceed to the consideration of S. Res. 548.

Mr. CORNYN. Mr. President, several colleagues had some constructive suggestions about amendments to this measure, and there were two amendments that we modified the original resolution with. At this point, I ask unanimous consent that the amendment at the desk be agreed to, and I urge adoption of the resolution, as amended.

Mr. CORNYN. Mr. President, I reiterate my unanimous consent request that the amendment at the desk be agreed to and urge adoption of the resolution as amended.

Mr. CORNYN. I ask unanimous consent the amendment to the preamble be agreed to, the preamble as amended be agreed to, and the motions to reconsider be laid upon the table en bloc.

Mr. CORNYN

Mr. CORNYN. I ask unanimous consent to speak for up to 15 minutes as in morning business.

Mr. CORNYN

Mr. CORNYN. Mr. President, on June 20, Texas Supreme Court Justice Harriet O'Neill retired after a judicial career of more than 17 years. On behalf of the people of Texas, I would like to take this time to recognize her many accomplishments. After graduating with honors from the University of South Carolina School of Law and practicing for a decade in the field of complex business litigation, Justice O'Neill was elected to Texas' 152 District Court in 1992. On that court, her ability to conduct fair and impartial hearings was widely-recognized and won her the praise of lawyers on both sides of the civil bar. Less than 3 years later, Justice O'Neill's superior record in the district court earned her an appointment and subsequent election to Texas' 14 Court of Appeals. As an appeals court judge, she once again stood out from the crowd. In the words of her colleague, Judge David West, ``Harriet was considered one of the most reliable judges we had. . . She was absolutely flawless.'' After earning a 91 percent approval rating from the Houston Bar Association, the highest on her nine-member court, the people of Texas elected Justice O'Neill to the Texas Supreme Court in 1998, where she served with honor ever since. In 2002, and again in 2006, the Texas Association of Civil Trial and Appellate Specialists named her the Appellate Justice of the Year. Even more profoundly, in the case of TGS-NOPEC v. Combs, Justice O'Neill broke down a long-term barrier when she became the first woman ever elected to the Texas Supreme Court to preside as Chief Justice. As a Judge in the Texas Court System, Justice O'Neill has been a model for judicial restraint and faithfully interpreting the law, as written. Her opinions have consistently explained the law and the judicial role in a manner accessible to the general public. Clearly, she has provided an example for all judges to follow. Justice O'Neill's service to the State of Texas, however, has extended far beyond the courtroom doors. Most admirably, she has been an unwavering champion for the legal rights of our society's most vulnerable citizens. Since its inception in 2001, Justice O'Neill has been an active member of the Texas Access to Justice Commission. Through her work with this organization, she has helped to develop and implement initiatives designed to ensure that the court system is available to meet the basic legal needs of low-income Texans. In particular, she was heavily involved in creating and distributing a self-help Protective Order Kit that enables victims of domestic violence to file their own applications for court-ordered protection for themselves and their children. Because so many of our most important rights depend upon judicial enforcement, her efforts have ensured that countless Texans will be able to enjoy the equal justice under the law so central to the American dream. Justice O'Neill has also worked to protect Texas' most innocent and disadvantaged citizens through serving as the chairwoman of the Permanent Judicial Commission for Children, Youth and Families. After spearheading the creation of this commission in 2007, she has worked tirelessly to strengthen court practices in the Texas child-protection system. Thanks to her efforts, Texas' 30,000 abused and neglected foster children can rest assured that they will be able to look forward to a better tomorrow. Justice O'Neill's dedication to protecting the vulnerable has also been recognized at the national level. In 2006, she was appointed by Attorney General Alberto Gonzales to serve on the Department of Justice's National Advisory Committee on Violence Against Women. In this capacity, she assisted with the implementation of the Violence Against Women Act and supplied policy advice on programs addressing domestic violence, sexual assault and stalking. Because these crimes are so heinous and their victims are so defenseless, Justice O'Neill's work in this area is particularly important and praiseworthy. Although her professional accolades are impressive in their own right, Justice O'Neill's personal accomplishments are equally so. While devoting countless hours to serving the people of Texas, she has simultaneously managed to serve as a loving wife to her husband Kerry and a dedicated mother to her three children. Despite 17 years of full caseloads, she has found the time to stay actively involved with her family, including a tenure coaching her daughters' youth basketball teams. In this busy day and age, Justice O'Neill has provided all of us with an example of what it truly means to fulfill our duty. While June 20 marked the end of her service on the Texas Supreme Court, I have no doubt that Justice O'Neill will remain active in the causes that she cares so deeply about. On behalf of the people of Texas, I thank her for her many contributions. We can only hope that her next 17 years will be as remarkable.

Mr. CORNYN

Mr. CORNYN. Mr. President, I see our distinguished colleague from Pennsylvania on the Senate floor, and I know he expects to speak for a little more extended time. He has graciously allowed me to go first.

Mr. CORNYN

Mr. CORNYN. Mr. President, I rise to speak briefly on the nomination of Elena Kagan to the U.S. Supreme Court. Of course, this vacancy is being left by the retirement of Justice John Paul Stevens. The President has the constitutional prerogative to nominate whosoever he chooses, but it is important to recognize the Constitution does not stop there. It also provides a second constitutional obligation or responsibility, in this case upon the Senate, when it comes to the duty of advice and consent. We know there are only nine Justices on the U.S. Supreme Court and that each has that job for life. It goes without saying--or it should, I would add--that the process in the Senate must be fair and dignified. I wish I could tell you it has always been that way, but I believe the confirmation process of Judge Sotomayor to the U.S. Supreme Court was conducted in that way, and I certainly believe so will this confirmation process as well. But in addition to being fair and dignified, it must also be careful, thorough, and comprehensive. Our job is particularly difficult because of the fact that Solicitor General Kagan has never been a judge. She is a blank slate in that regard. We do not have any prior opinions to study. While that is not unprecedented, it is somewhat unusual for someone to come to the U.S. Supreme Court without ever having served as a judge. In addition, we know General Kagan has practiced law only very briefly. She was an entry level lawyer in a Washington law firm for about 2 years and then, of course, last year she was chosen by the President to be Solicitor General at the Justice Department. But that brief experience tells us virtually nothing about how she would approach cases as a member of the U.S. Supreme Court. What we do know about Elena Kagan begins, and largely ends, with her resume. We know the jobs she has held. We know the positions she has occupied and the employers she has chosen to work for. A review of her resume shows us two things. First, Ms. Kagan is very smart. Her academic records are impressive. Second, we know Ms. Kagan has been a political strategist for a quarter of a century, but she has never been a judge. We know she has served extensively and repeatedly as a political operative, adviser, and a policymaker--quite a different job than that she would assume should she be confirmed. We know General Kagan's political causes date back to at least college, when she volunteered to help a Senate candidate in her native State of New York. We know that after law school, she worked for two of the most activist Federal judges in the 20th century, Abner Mikva and Thurgood Marshall. Justice Marshall often described his judicial philosophy as ``do what you think is right.'' I wish he had mentioned something about applying the law, but he said to do whatever you think is right. Elena Kagan has called Justice Marshall her judicial hero. We know that Solicitor General Kagan volunteered for a time in the Michael Dukakis campaign for President in 1988, where she did opposition research. We know that a few years later, Ms. Kagan advised then-Senator Joe Biden during the nomination of Ruth Bader Ginsburg. We know General Kagan gave up her teaching job to work at the Clinton White House where she was a leading policy adviser on many of the hot button issues of the day. She was a deputy assistant to the President on domestic policy. She was a deputy director of the Domestic Policy Council. During that time, she was a leading policy adviser on a number of controversial issues regarding abortion, gun rights, and affirmative action. After she left the Clinton White House, Ms. Kagan's political skills helped her become dean of the Harvard Law School and, by all accounts, she was successful in that job as an administrator and as a fundraiser. The one clear legal position she took as dean was her position against military recruiters that the Supreme Court rejected 9 to 0. Solicitor General Kagan returned to government a year ago when she became Solicitor General following the election of her friend Barack Obama. Ms. Kagan's resume shows that she is very comfortable in the world of politics and political campaigns. She has worked hard as a policy and political strategist in some very intense political environments. As a policy and political adviser, her record indicates she has been successful. The question raised by this nomination, though, is whether Elena Kagan can step outside of her past role as political adviser and policy strategist in order to become a Federal judge. I have had the honor of being a State court judge and I know firsthand that being a judge is much different from being a political strategist. The job of a political strategist is to help enact policies. The job of a judge is to apply the law wherever it takes them. The goal of a political adviser is to try to win for your team. On the other hand, a good judge doesn't root for or fight for a team but, rather, is impartial or, as sometimes stated, is disinterested in results, in winners and in losers. The important question is whether Solicitor General Kagan can and will set aside her considerable skills as a political adviser to take on a very different job as a neutral judge. Will she apply the law fairly, regardless of the politics involved? Will Solicitor General Kagan appreciate the traditionally narrow role of a judge who must apply the law rather than the activist role of a judge who thinks it is proper to make up the law? Can she make the transition from political strategist to judge? The hearings on Ms. Kagan's nomination are 1 week from today. I hope the hearings will be a substantive and meaningful opportunity for Elena Kagan to explain how she plans to make that shift from political strategist to judge. Because she has never been a judge, the hearings will be a chance to learn about what she expects her judicial philosophy and approach will be. Every candidate for the Supreme Court has the burden of proof to show they are qualified to serve on the Supreme Court. Most nominees have a much longer record, including a record of judicial service, which could help satisfy that burden of proof, but not so in Ms. Kagan's case. Given Ms. Kagan's sparse record, however, the hearings themselves must be particularly substantive. In 1995, then-Professor Kagan gave advice in a Law Review article to the U.S. Senate on how to scrutinize a Supreme Court nominee. She wrote that the ``critical inquiry'' must be ``the perspective [the nominee] would add'' and ``the direction in which she would move the institution.'' I agree. Given Solicitor General Kagan's sparse record and her lack of judicial experience, it is important that the hearings be an opportunity to fill in the blank slate that is Elena Kagan. Mr. President, I yield the floor.

Mr. CORNYN

Mr. CORNYN. I suggest the absence of a quorum.

Mr. CORNYN. Mr. President, I rise to speak on the pending legislation, which is called the American Jobs and Closing Tax Loopholes Act of 2010. Sometimes it is spoken of as the tax extenders bill. But in reality it is a deficit-extending bill. The reason I say that is because the substitute amendment still adds a reported $55 billion in red ink to the deficit. More deficit spending is simply irresponsible. Our national debt, as we know, is over $13 trillion, and $2.3 trillion of that $13 trillion of debt has been added just since the time President Obama has been sworn into office. Congress is spending money in a way that would give drunken sailors a bad name--more than $30,000 per household, more than $12,000 per household from our children. According to the Congressional Budget Office, the public debt under the President's budget will be at 90 percent of our gross domestic product by the year 2020--90 percent of our gross domestic product. Greece had a debt-to-GDP ratio of 115 percent, and we are getting far too close for my comfort. Our debt represents a national security vulnerability. I am glad the substitute amendment retains my amendment, which we voted on earlier, to create greater transparency on exactly who owns our debt when we run up deficits and add to the debt, and it requires us to then periodically assess the strategic and economic risks associated with that debt. For example, the Treasury Department recently reported that China holds about $900 billion of U.S. debt. So when we spend money here, somebody has to buy the debt. What happens is that China and other countries buy that debt, and that creates a potential national and economic security issue. The best way to reduce our strategic and economic risks associated with our debt is to stop spending money we do not have. Stop. Every family, every business in America, when they run out of money, they do not just continue to try to max out their credit card. The problem is that the credit card of the Federal Government knows no limits. Only the Federal Government can continue to print money and rack up debt and hope and pray that countries such as China will buy that debt in the future. It has to stop. America's fiscal mess is not just a math problem. Government debt crowds out private sector investment that instead could help create jobs for the 15 million Americans who are unemployed. Our unemployment rate is close to 10 percent. For Hispanics, it is 12.4 percent. For teenagers, it is 26.4 percent--the toughest job market for young people in 41 years even though it is summertime and many of them are out of school and looking for work. Nearly 9 out of 10 net jobs created in May were temporary jobs created by the Federal Government in hiring temporary census workers. Only 41,000 net private sector jobs were created in May--an anemic figure, to be sure. According to economist Larry Lindsey, as much as 20 percent of the net private sector job creation in May was due to the oilspill in the Gulf of Mexico--temporary workers hired to skim oil off the gulf and to protect our beaches and estuaries. We know the administration will, unfortunately, further exacerbate the unemployment situation, particularly along the gulf coast where I live in Texas, by its 6-month ban on offshore deepwater drilling. We all understand we have to stop this spewing well. That is job No. 1. No. 2 is we need to make sure we understand what happened and make absolutely sure, as much as humanly possible, that it never, ever happens again. But we also need to be mature enough and aware enough to assess what this means if we impose a lengthy ban on deepwater drilling. It means more dependence on imported oil from abroad, from dangerous parts of the world, even countries that wish us ill. It also means jobs here at home will be destroyed because these deepwater rigs will move to other parts of the world, Brazil and other places. According to the energy industry, more than 46,000 jobs could be lost as a result of the moratorium in the short term and 120,000 jobs in the long term. Unfortunately, the policies that are promulgated by the Congress and by this Senate have an impact on jobs. They can either be a positive impact and facilitate private sector investment in job creation or they can be job killers. I, for one, worry far too often that what is emanating from Washington, DC, these days amounts to job-killing policies, and this underlying bill we are debating has a couple of good examples. We know job creation should be our No. 1 priority when unemployment is at historic highs, when people are losing their homes due to foreclosure because they simply do not have jobs to be able to pay their mortgage. But this so-called tax extenders bill actually raises taxes on capital creation and on investment in a way that will hurt job creation. There are two taxes I am referring to specifically, and while both are somewhat technical, it is very important to understand them. The first tax relates to so-called carried interest. Partners in private equity firms are often paid based on their performance in addition to their salary. Under current law, this so-called carried interest is taxed like a capital gain at the 15-percent rate, if we are talking about right now, 15 percent, as opposed to ordinary income, which is taxed at a much higher rate. The substitute amendment would change the way this carried interest is taxed and take it from the capital gains, which is a much more attractive rate, which encourages capital formation, encourages investment, and raise that rate to the highest individual income tax rate for ordinary income of 39 percent. What do you think is going to happen when entrepreneurs and investors look at this change in the tax law from 15 percent to 39 percent? Do you think it will expand or will it contract the amount of money invested in job-creating ventures? Well, common sense should tell us it will contract it. It will reduce the number of jobs. It will reduce the capital available for investment. And it is exactly the opposite policy we ought to be pursuing with high unemployment and people losing their homes. Higher taxes on this type of business activity is bad enough, but even worse is another tax that is embedded in this bill called enterprise value. These are arcane subjects and, indeed, I felt a little better yesterday after talking to some of my colleagues on the floor. I said: Do you understand what enterprise value tax is? And thank goodness I saw some blank looks on their faces, and they did not understand it. So I did not feel alone. So we have all had to get a little bit smart and a little bit better educated. But let me tell you what I have discovered in the process of my own education. Enterprise value is known as brand value or good will. It is the value of the sweat equity, the hard work owners put into businesses over time. Under current law, when a partner sells his or her interest in a business, the enterprise value is taxed as a capital gain. This legislation would change the tax treatment on the sale of that business but only for certain types of businesses. In other words, this bill targets certain types of businesses. But as one writer commented recently--they said they worry that this is a stalking horse or an attempt to take all capital gains treatment for the sale of businesses and to raise it to ordinary income levels--in other words, to double, or more, the taxes on the sale of certain types of businesses. Owners of investment firms and real estate partnerships would be singled out for higher taxes when these businesses are sold. They would pay much higher taxes than what are paid under current law. Again, why should people care? Why should anyone within the sound of my voice care about what this handful of private equity firms and real estate partnerships pay? Well, it is because what this, in effect, does is it takes the seed corn that is used to grow the economy and it destroys it. It dries up the money that creates the investment, that then allows the creation of businesses and expansion of businesses to create jobs. That is why all of us should care even if we individually don't have to pay it. In fact, under this narrowly tailored and targeted and discriminatory bill, investment partnerships would be the only businesses in America where the value inherent in the enterprise would be ineligible for capital gains treatment and instead be hit with the higher tax bill when the overall enterprise part of it is sold. This legislation would break new ground in taxing enterprise value as ordinary income and would unfairly tax value accumulated perhaps over decades by small businesses all across America. Supporters of this bill will tell you this proposal is all about targeting the hedge fund managers on Wall Street, suggesting that this is payback or due retribution for the havoc a handful of people have wrought on the American financial system. But this proposal would not target the people who caused the financial meltdown. This targeted provision would have a devastating effect on Main Street in Illinois, in Montana, in Texas, in Pennsylvania--everywhere around this country. Let me give you an example. Private equity-backed companies based in my State employ about half a million workers. What happens to those jobs if this legislation becomes law? Well, not surprisingly, a lot of the investors in these private equity firms where the private equity- backed companies get their money are retirement systems such as the Employees Retirement System in Texas and the Teacher Retirement System in Texas, both of which have a portion of their assets invested in private equity. So I ask again: What happens if this legislation becomes law? What happens to small businesses that depend on private equity to grow their businesses and create jobs? Well, I received an answer to that question from Donald Brown, the chief executive officer of a medical device company that has an office in Fort Worth, TX. The name of that company is Arteriocyte Medical Systems, otherwise known as AMS. AMS is a fast- growing company--again, something we ought to want to encourage, not discourage, by the policies emanating from Washington. Fast-growing companies create jobs which allow people to provide for their families. In a high unemployment economy, it ought to be exactly the sort of growth we ought to encourage. This company has an interesting story to tell because it is partnered with the Institute for Surgical Research at Fort Sam Houston in San Antonio. Their goal is to improve surgical outcomes for U.S. troops injured by blast burns and to reduce the necessity of amputations. AMS has also grown because private capital equity was invested in this business in 2007 and helped them grow from 6 employees to 70 employees, with an average employee salary that exceeds $72,000 a year. Here is what Mr. Brown told me in a letter he sent: By changing the tax treatment of carried interest to ordinary income, [this bill] would penalize entrepreneurial risk-taking and discourage investment in companies like ours that need capital the most. I ask unanimous consent to have Mr. Brown's letter to me printed in the Record following my remarks.

Mr. CORNYN. Mr. President, it is telling and it is also disappointing that the Senate earlier today rejected the Thune alternative, which I cosponsored. The reason I say it is telling and disappointing is because the Senator from South Dakota offered us an option to extend many of these expiring tax provisions, but it would not have enacted punitive, economically destructive tax increases--things such as the enterprise value tax and the tax on carried interest. The option offered to us by Mr. Thune, the Senator from South Dakota, would have continued important expiring tax provisions, including the State and local tax deduction, which I must add provides Texans with over $1 billion in Federal tax relief annually. That is because we do not have a State income tax, and we are proud of it. That is one reason why we continue to grow and create jobs while many other parts of the country do not fare as well. But this at least provides equity to us by allowing people in Texas who pay sales tax to write that off of their Federal income tax, as other States do when they pay a State income tax, to write it off their Federal income tax. But instead of increasing the budget deficit by $55 billion--which this bill does, as it currently has been offered--the option offered by the Senator from South Dakota would have reduced the deficit--reduced the deficit--by $68 billion and extended the expired tax provisions. It is baffling to me why we would reject, why the Senate would reject, an opportunity to do what on a bipartisan basis we want to do: extend these tax benefits for the benefit of the American people, but to do so in a way that is fiscally responsible. I just do not get it. Hence, further evidence of the growing disconnect between what is happening here in Washington in the Congress and what we are hearing from the American people, who are tired of reckless spending, and they are tired of endless debt, and they know a day of reckoning will come. If the Senate adopts the legislation before us, it will send another clear message. It will send the message to investment firms and real estate partnerships: You have been punished for taking risks, you have been punished for creating jobs, and you have been punished for success. To all other American entrepreneurs--the people we ought to be encouraging because these are the people who make the investments that allow companies to be started and companies to grow and jobs to be created, but to all other American entrepreneurs, it will send the message that it may not have been you this time, but you are next. The next time the big spenders want more money to grow the size of the Federal Government, your company, your business, could be the next on the chopping block. To global investors--and we know in a globalized economy there are people all around the world who have a lot of different choices as to where they want to start their business--unfortunately, to these global investors, it will send the message, if we pass this bill as written: America does not want your business. America does not want your business. I cannot think of a more damaging, more destructive message to be sent by what we do here in the Congress than sending the message to global investors: We do not want your business here in America. That is because our economic rivals, other countries such as China and India, and others, offer a much lower tax and offer a much more welcoming environment when it comes to entrepreneurs and investors from a tax perspective. To the 15 million Americans who are unemployed--15 million Americans, including the 472,000 who filed for unemployment claims for the first time last week--this legislation will send the message that Washington's priority is not in creating jobs. Washington's priority is to grow the government. I do not think these are the messages we should be sending. I urge my colleagues to oppose this substitute amendment. We will have a chance to show the American people on which side we stand when we have the cloture vote on this bill tomorrow morning. Make no mistake about it, a vote for this bill will be a vote for killing jobs, for chasing away investment, for saying America is not interested in your business--at a time when Americans are suffering high unemployment and people are losing their homes because they cannot pay their mortgage payments because they have lost their jobs, with no end in sight. Mr. President, I yield the floor. Exhibit 1

Mr. CORNYN

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

Mr. CORNYN

Mr. CORNYN. Mr. President, I urge my colleagues to support the Cornyn amendment. This is a transparency amendment. It just gives the American people and Congress the information we need in order to make a determination of whether Third World countries owning our debt poses a national security or a financial risk to the United States. I ask for your support.

Mr. CORNYN. Mr. President, how much time do I have remaining?

Mr. CORNYN. Mr. President, I will respond briefly. The reason why we require, in my amendment, the President of the United States to make the report on the risks to our national security and our financial system is because only the President can command all of the resources of the U.S. Government, including that of our intelligence services, which may have something to say about the national security risks associated with countries such as China owning so much of our debt. We know that, for example, leaders in the Chinese military have threatened retaliation in exchange for the United States selling defensive weapons to the country of Taiwan. I would think the Treasury Department, which in the Baucus amendment would be required to make that report, would not have access to the intelligence and the other information necessary--or from the Department of Defense--in dealing with China. The Senator from Montana also says we should not rock the boat. We ought to go steady as she goes. The problem is our boat is going to sink and go to the bottom of an ocean of debt if we do not change our ways. This is a first step to try to provide additional transparency to let the American people assess for themselves whether they think this is a good idea or whether their elected representatives in Congress should do something about rising debt and runaway spending. I understand the Senator from Montana saying we don't want to single out special countries. It is true that some of our closest allies such as Japan and the United Kingdom also purchased large amounts of our debt, but, frankly, I am not as worried about those allies of the United States as I am the intention of China, which is not an ally, which is a rival, to say the least, and one whose actions we need to be appropriately skeptical about and discerning. So unfortunately, I think the alternative amendment offered by the Senator from Montana waters down this important amendment, and I think it would obscure the facts from the American people and policymakers here in Congress. So I ask my colleagues to vote against the Baucus alternative and vote for the Cornyn amendment. Mr. President, I yield the floor and reserve the remainder of my time.

Mr. CORNYN. I yield back the remaining time.

Mr. CORNYN. Mr. President, parliamentary inquiry: My understanding is that the Senator from Montana was yielding back. I was willing to yield back my time and ask for a vote as soon as it can be conveniently arranged.