Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. I yield the floor.

Mr. GRASSLEY

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GRASSLEY. Mr. President, is there a nominee to report?

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, as an Iowan, it is with great sadness but also a sense of pride that I rise to pay tribute to Navy SEAL Jon T. Tumilson who gave his life for his country along with 29 other American heroes as the result of a helicopter crash in Afghanistan on August 6. He worked hard to get where he did and was extremely proud to have become a Navy SEAL. The people of the State of Iowa, and particularly his hometown of Rockford, are extremely proud to call him a native son. Petty Officer Tumilson is described as someone who committed fully to everything he did and he applied that intense dedication to serving his country. We as a nation must be grateful that we have brave and selfless Americans like Jon Tumilson who are willing to undertake the incredible training necessary to become a Navy SEAL so that they can then put their lives on the line repeatedly in some of the most dangerous missions imaginable. Our country has lost a powerful force for good, and his fellow sailors have lost a brother in arms. Of course, his loss will be felt particularly deeply by his family, friends, and neighbors. My prayers go out to Jon's parents, George and Kathy, and all those who are grieving. Nothing can compensate for his loss, but I hope they can take comfort in knowing that he died a true American hero. Jon Tumilson's memory will now join the honored ranks of those patriots who, since the Revolutionary War, have fought to defend American liberty. Chief Petty Officer Robert Reeves

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, during the past few weeks and months, Congress and the President have been involved in discussions to raise the debt ceiling, and reduce spending, deficits and debt. This discussion is a result of the elections last year. The voters sent a strong message that it was time for Washington to stop the spending spree. And it is because of that message that we are even having this debate. Even the President now agrees that to address our fiscal situation we need to reduce spending. That has not always been the case, though. Just last year President Obama refused to endorse or advance the findings of his own National Commission on Fiscal Responsibility and Reform. On February 14, President Obama submitted his budget proposal to Congress that refused to address our looming deficits and debt. Over the next 10 years, his budget would have added another $13 trillion to our national debt. President Obama's budget was so out of touch that it was rejected in the Senate by a vote of 97-0. Then he delivered a speech in April that magically found $4 trillion in spending cuts. In just a matter of weeks, President Obama found $4 trillion in spending that no longer needed to be spent. The American people have to wonder how Washington can be serious about budgets and spending if the President, in a matter of weeks, can find $4 trillion of spending that was of national importance on February 14, but is no longer necessary on April 13. It is this type of behavior that leads people to be cynical of Washington and the Federal Government. It is little wonder that lofty commitments from Washington are received in Middle America as just more empty promises and political rhetoric. Up until a few months ago, President Obama and members of his administration were calling for a clean debt limit increase with no spending cuts. He simply wanted Congress to provide him a blank check. The debate has shifted. We are no longer discussing spending increases. The entire debate today is about cutting spending, how much and from where. The fact that we are here today in agreement on the need to cut spending is an enormously important development. I commend all of those who worked and insisted that spending cuts be included in this agreement, and I thank those who were involved in working out this hard fought agreement. Unfortunately, this bill does too little to address our overspending, deficits and debt. Virtually none of these cuts in this bill come in the next few years. It is all back loaded with no guarantee that Congress won't reverse course, and undo these spending reductions. And, there is no guarantee that entitlement programs that are driving the long-term fiscal problems will be reformed. These programs need reform so they remain viable, affordable and available for generations to come. But this bill has too little to ensure those reforms take place. The American people sent us to Washington to confront these problems. They want us to stop overspending. They want us to chart a path to fiscal responsibility, where Washington spends only what we take in, like the American people themselves must do. And, while this bill is a small step in the right direction, I believe the American people expect and deserve a giant leap in the right direction. In addition to its timidity on spending reductions, I fear that this bill will set up a process to increase taxes on the American people in the belief that more tax revenue would lower deficits. This bill creates a bicameral, bipartisan committee that will be tasked with producing the second tranche of deficit savings. Despite the fact that our government has a spending problem and not a revenue problem, President Obama continues to insist that higher taxes must be a part of a major deficit reduction plan. It is his desire for bigger government, and higher levels of taxation that will likely prevent any serious follow-on deficit reduction or entitlement reform package. I want to be clear. I do not wish for the government to be launched toward a threat of default. My vote against this bill is not a signal that I would prefer default. I would not. But, I am compelled to vote against this package because I see this as a missed opportunity. We are providing President Obama with the largest increase in the national debt ceiling in history. But, instead of using this opportunity to address our near term and long term spending and fiscal problems, we are cutting a little now, and kicking the can further down the road. This bill grants a $2.4 trillion increase in our Nation's debt limit, the largest increase in our history. The challenge for Congress and President Obama was to sketch a deficit reduction plan to address deficits and debt in a significant way. The uncertainty about Washington's fiscal management gets in the way of private-sector job creation and economic recovery. But this bill is insufficient in putting us on a path to live within our means. To me, this is also a moral issue. It's wrong for this generation to over-spend and leave the bills for the next generation to pay. The trajectory of our debt is alarming. It will soon undermine our economy and our economic growth. If we do nothing, our children and grandchildren will have fewer economic opportunities than we have had. Without a plan to put our fiscal situation on a better path, the next generations will have a lower quality of life than the one we've experienced. We can't let that happen. But, I am afraid this bill will accomplish too little in this regard. Again, I recognize that this hard fought compromise is a step in the right direction, and I am pleased that Congress and the American people have recognized the terrible fiscal path our nation is on. I only wish that this plan was proportional to the size of the problems we face. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, today the Senate will confirm four nominees to be U.S. district judge. Three of these seats, the vacancy for the Southern District of Texas, the vacancy for the Southern District of Florida and the vacancy for the District of Colorado, have been designated as judicial emergencies. With the votes today, we will have confirmed 33 article III judicial nominees. Twenty-one of those confirmed have been for judicial emergencies. We continue to make great progress in processing President Obama's judicial nominees. As we head into our August recess, the Senate has confirmed 62 percent of President Obama's nominees since the beginning of his Presidency. That is not including the two the Supreme Court Justices nominated by President Obama. As my colleagues are aware, those nominations consumed a considerable amount of time in the committee and on the Senate floor. During this Congress, the Judiciary Committee has held hearings on more than 75 percent of the President's judicial nominees. During the comparable time period for President Bush, only 70 percent of President Bush's nominees had hearings by this time. We have also reported 61 percent of the judicial nominees, which is comparable to President Bush's nominees. I support these nominations and congratulate each of them. I would like to say a few words about each one of the nominees. Sara Lynn Darrow is nominated to be U.S. district judge for the Central District of Illinois. Ms. Darrow graduated from Marquette University in 1992 and received her J.D. degree from St. Louis University School of Law in 1997. From 1997 to 1998, Mrs. Darrow worked in the law offices of Clarence Darrow, a small general practice firm in Rock Island, IL. She became an assistant State's attorney in 1999, where she handled juvenile, misdemeanor, and felony traffic cases. Upon promotion in 2000, she handled felony cases and serious juvenile abuse cases. In 2003, Mrs. Darrow began work as an assistant U.S. attorney, prosecuting Federal crimes including drug conspiracy, gun, racketeering, child exploitation, fraud, and bankruptcy. She has prosecuted approximately 300 defendants and tried 10 cases to verdict before a jury. The ABA Standing Committee on the Federal Judiciary has given Ms. Darrow a unanimous ``Qualified'' rating. Nelva Gonzales Ramos is nominated to be U.S. district judge for the Southern District of Texas. After graduation from the University of Texas School of Law in 1991, Judge Ramos began her career as an attorney at Meredith & Donnelly in Corpus Christi. She worked primarily in personal injury litigation, employment litigation, and insurance defense. In 1997, she resigned from the firm to enter duty as a municipal court judge. During her campaign for district court judge during 1999 to 2000, she briefly worked as a solo practitioner. During this time, she practiced primarily personal injury but also family and criminal law. While in private practice, she tried approximately 17 cases to judgment or verdict. Judge Ramos was appointed as a municipal court judge for Corpus Christi in 1997 where she had a criminal docket. She presided over 500 cases that went to verdict or judgment. When she announced her candidacy for district court judge in 1999, she resigned from this position as required by the city charter. In 2001 she was elected as district court judge for the 347th Judicial District. She was reelected in 2004 and in 2008. As district court judge, she has presided over 1,200 cases that went to verdict or judgment. While serving as a district court judge she helped establish a domestic violence court, and served as the local administrative judge for the Nueces County district courts. In this capacity she presided over meetings of the district court judges, ensured compliance with local rules, appointed committees regarding court management, and handled assorted other administrative tasks regarding the court. The ABA Standing Committee on the Federal Judiciary gave her a split rating of ``Qualified''--substantial majority--and ``Well Qualified''-- minority. Kathleen M. Williams is nominated to be U.S. district judge for the Southern District of Florida. She received her B.A. in 1978 and her J.D. in 1982 from the University of Miami School of Law. Ms. Williams began her legal career in 1982 as an associate attorney at Fowler, White, Burnett, Hurley, Banick & Strickroot. At Fowler White, she participated in insurance defense litigation defending insurance companies, city and county interests, hospital trusts and corporations. From 1984 to 1988, Ms. Williams served as an assistant U.S. attorney in the Southern District of Florida. While an assistant U.S. attorney, she prosecuted individuals on charges ranging from simple narcotics and weapons matters to complex money-laundering and RICO Litigation. In 1988, Ms. Williams returned to the private sector as an associate attorney for Morgan, Lewis & Bockius. While at Morgan, Lewis, & Bockius, she represented financial institutions, government contractors, and multinational corporations in labor litigation and white collar criminal defense matters. In 1990, Ms. Williams joined the Federal Public Defender's office as the chief assistant public defender, where she represented persons accused of violating Federal criminal statutes but who cannot afford to retain an attorney. In 1995, she was appointed to be the public defender for the Southern District of Florida, where she continues to serve. As a Federal public defender she has litigated a wide range of matters including immigration, complex fraud, and national security. She was also appointed to be the acting Federal public defender for the Middle District of Florida from 1999 to 2000. The ABA Standing Committee on the Federal Judiciary has given her the rating of majority ``Well Qualified'' and Minority ``Qualified.'' Richard Brooke Jackson is nominated to be U.S. district judge for the District of Colorado. Judge Jackson received his A.B., magna cum laude, from Dartmouth College in 1969 and his J.D., cum laude, from Harvard Law School in 1972. Following law school, Judge Jackson joined the firm of Holland & Hart as an associate, where he focused on a combination of commercial litigation and personal injury litigation. In 1978, he became a partner and opened the Washington, DC, office of the firm. Additionally, he served on a number of committees within the firm and was chairperson of the litigation department. His pro bono work focused on personal injury claims and occasional representation in criminal defense and family law matters. In 1998, he was appointed to serve as district judge for the First Judicial District of Colorado. As a district judge, he handled a mixed docket of criminal, civil, and domestic relations cases. In 2003, he was appointed chief judge. The ABA Standing Committee on the Federal Judiciary has given Judge Jackson the rating of unanimous ``Well Qualified.''

Mr. GRASSLEY

Mr. GRASSLEY. I didn't come to the floor to comment on what Senator Vitter just said, and I can sure appreciate his view that a decision that ends up with a $7 trillion addition to the national debt over the next 10 years is not getting us very far down the road compared to what the people of the United States, who have to live within their income, believe this Congress should accomplish. But a $7 trillion addition to the debt over that period of time, compared to what the President suggested we spend over the next 10 years when he issued his budget to Congress, on February 14, we could end up with $13 trillion added to the national debt--so somewhere along the line, between February 14 and last night, when the President announced his support for this compromise, he has come to the conclusion that we could spend $6 trillion less over the next 10 years. Even though a lot of people see this as not making progress, the President admitted he has found ways of changing his mind about $6 trillion in the course of just a few months. I suppose it also might lead our constituents to think in terms of, there has to be something wrong with the thinking in Washington if, on February 14, they think we have to spend X number of dollars that will add $13 trillion to the national debt and here it is just 3 or 4 months since then and the President goes on television and says this is a good compromise and we can be at $6 trillion less in spending. It probably leads people to believe there has to be a lot of money wasted in Washington, DC, if, in fact, between February 14 and last night, the President can find consensus in spending $6 trillion less over the next 10 years. That is a comment on what Senator Vitter just said and not disagreeing with Senator Vitter's comments in any way. When we are in the Senate of the United States talking about what to do about the deficit situation and how much deficit spending we are having, it probably gets lost in the minds of people that what we are spending today and adding to the national debt is creating a great legacy of debt to leave to our children and grandchildren. This debate around this issue brings me to this question: Is it fair to tax our children and grandchildren just because they cannot vote? Our children and grandchildren, for the most part, do not have any voice in this, except what is given by our generation and people representing the older generations, other than our children, making these decisions. That is because we, in fact, are doing just that; taxing our children and grandchildren by adding to the national debt. That is what we are doing with our irresponsible budget deficits. We have a choice between a brighter future for our descendants or more social spending now; more social spending or, as President Obama might put it, investments. Any way we look at it, money we spend today and we do not pay for, we are putting this bill on future generations-- our children and grandchildren. This is a choice we should be thinking about as we arrive at a decision of whether to vote for or against this grand compromise that has come out of these negotiations. It gets down to basic choices of what do we do to encourage private sector employment. It gets down to choices of what we do about the size of government. There is a real choice in this debate as we talk about how big government should be. The choice is, do we grow government or do we grow the private sector? What are the philosophical differences as well as the economic differences between growing government versus allowing business and entrepreneurship to flourish in America? We have had these dramatic increases in expenditures over just the last 2 years; 22-percent increases in appropriations in the last 2 years, when the economy only grows about 2 percent. Everybody knows that is not sustainable. On top of that, we had a $814 billion stimulus package that did not do what it was supposed to do to keep unemployment under 8 percent. At this time, we have gone from the national debt being 35 percent of the gross national product to today being about 65 percent and before the end of this year it is going to be 72 percent. And it is on a path to go to 90 percent. So we have seen government grow during the last few years out of proportion to the 20 percent of the gross national product that the public sector, represented by the Federal Government, took, compared to that growth from 20 to now 25. Those 5 percentage points of growth in the government may not seem like a lot but just look at the difference between incentives for growth of the private sector for creating wealth as opposed to the Government consuming wealth. That is a fact. Government consumes wealth; it doesn't create wealth. People who are using their labor and their minds and investing are the ones who create wealth in our country. Those 5 percentage points make a difference because it is a very dramatic growth in government. As government consumes more--and I said it does not create wealth--it takes money out of the private sector, where it can grow more and create jobs and, consequently, then limits the opportunity for expanding the economic pie. That is what the private sector does through investment and labor, expands the economic pie. We can have economic growth so we can have more for more people. But when government gets bigger, we restrict the opportunities for economic growth in the private sector and we have less pie for more people. So a 5 percentage point growth in the government for the last 5 years compared to a 50-year average lessens the chance for a brighter future for our children and grandchildren, and that has to be a part of this debate as we decide the size of government versus the size of the private sector--the wealth-producing private sector. If we keep government at 20 percent, then that is going to leave more in the private sector that is going to create wealth. It is going to be a more productive use of our resources. The promise of our free market system can only be realized if we choose less social spending, if we choose less intrusive regulation and more efficient use of our resources in the private sector as opposed to the public sector. We should be doing those things not only in this budget agreement, this deficit reduction agreement, but in all the decisions we make in the Congress. We should be doing more to encourage productive uses of our resources in the private sector, rather than consumption of those resources in the public sector. President Obama has launched a campaign over the 30 months he has been in office to defend the welfare state and of course the woefully inefficient government-run health care system that is an example of that welfare state. I think we can learn some lessons from the rest of the world as well in looking at what is right for America. We should learn from history and not repeat the mistakes that have been made in other countries. Since the 1950s, we have seen a lot of countries around the world use transfers of wealth from one generation to another or the transfer of wealth from one group of people to another. We have seen grants. We have seen a redistributive philosophy in a lot of countries. What did that do? It did very little to raise the living standards of those in Asia, Latin America, Africa. More open economies have proven otherwise. More open economies as we have had in Japan since the 1950s have lifted more people out of poverty in 10 years than welfare state programs have done in 50 years. Japan--just using it as an example--forced its producers 50, 60 years ago to compete. Private sector resources are more productive than those of the public sector making the decisions on how to use those resources, or a command economy, as you might call it. After Japan, we had Korea, Taiwan, Hong Kong, and Singapore. More recently, in the last 20 years, China and India have been encouraging more competition and more productive uses of resources with less of it promoted by the government. There are more decisions being made by the private sector in Brazil, and even parts of Africa are learning that is the route to go. We should learn from that. We should not turn backwards and rely more on government than we have in the past. By doing that, we retire opportunity in America. We retire opportunity by growing government at the expense of individual initiative. I hope we don't go that route. I think this budget debate has something to do with whether we are going to turn this around from the direction that it has taken over the last few years. Those last few years have not just been the 30 months of this Presidency but a little bit going back into the previous Presidency as well. In regard to President Obama's programs, we have had few results from the government becoming more involved in the economy. We have dealt with near zero interest rates for a long period of time. I have already mentioned the $814 billion stimulus. There are other things that have been done in recent months to turn this economy around. We still have unemployment above 9 percent. The recovery that was supposed to come from all of these programs that have had greater government involvement in our economy have made a recovery very elusive. In fact, there are even questions in the media recently of whether we could be going into another recession. President Obama tried mightly and wastefully--and in the end, very ineffectually--to turn this economy around through a massive number of government programs, but it has not worked. Progress would have been greater if we had tried programs by President Reagan or even President Kennedy's policies. In both of those instances they cut marginal tax rates. They eliminated burdensome regulations. Instead, what do we have out there right now even today coming from the White House? Promises yet of higher taxes; almost a demand that Congress pass higher taxes right now, and more regulations. I just recently read about a businessperson saying there are 29 onerous regulations coming out of EPA that will be detrimental to job creation because they are so costly. Another way of putting it is it might cause businesspeople to worry about the uncertainty of what government is going to do. When we have that uncertainty--and right now there is a heightened uncertainty--it retards growth. It retards growth because people will not invest. When there is not increased investment and hiring, there is less productivity. What these issues are all about is creating jobs, and we are not creating jobs right now. That is what people are going to see as a test as to whether we are out of a recession--regardless of the leading economists who made the decision that we have been out of a recession now for 2 months. For people who are unemployed, it is not a recession; it is a depression. They are going to measure coming out of a recession or coming out of a depression by whether they have a job. Jobs are not being created. President Obama promises what he wants is something that is fair and balanced. When I hear him talking about ``fair and balanced,'' I wonder if he is trying to steal those words from Fox News. Why is it fair to distribute more welfare to the present generation and today's voters by growing government at the expense of the wealth-creating private sector? That harms our children and our grandchildren who are going to end up paying for it with less productive uses of the resources of this country. We should not be thinking, as Europe has thought, about growing government, having government consume more of the resources of the economy, leaving less to individuals to make decisions whether to save or spend and what to save and what to spend on. That is the way it is done in Europe. We should not go that way. I always use a statistic that may seem so small to be insignificant, but I use a statistic of 1 percent. If we compare the United States with Europe over the last 25 years, our growth has averaged about 1 percent more in the United States than in Europe. Now that 1 percent may not sound like very much, right? However, over a generation, just 1 percent difference in growth--between the economy of Europe and the economy of the United States--adds up to 25 percent differential in per capita income. It seems to me the issues of this debt reduction debate--or if you want to call it increasing the deficit ceiling, the borrowing capacity of the Federal Government--too often tend to be about what is the situation right now, but it is really a debate about what is fair for our children and grandchildren because those are the decisions on borrowing that we are making today. I have to go back to where I started with a question of whether it is fair for us to tax future generations for the borrowing that we are doing today, and simply say it is not fair to tax future generations just because they cannot vote. I yield the floor, and I suggest the absence of a quorum.

Mr. GRASSLEY

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

Mr. GRASSLEY. I would ask to speak for 20 minutes.

Mr. GRASSLEY. Mr. President, while we are waiting for people to decide what the rest of us can vote on in regard to cutting down on the national debt and what we can do about being able to continue our government to function tomorrow, all of this is about uncertainty, and we read about the uncertainty every day in the newspaper because people don't know what we are going to do. That then causes businesses, small and large, not to hire, and it seems as though they have a lot of cash they would like to spend and invest wisely. Some of that would surely create a lot of jobs and get our economy moving. Of course, the situation today where the revision of the quarterly economic growth has come out even less for the second quarter than we anticipated, it brings a lot of things to mind as to what we can do to create jobs. With 9.2 percent unemployment, that has to be our concentration. I would like to advise my colleagues that a lot can be learned from history. We must change course if we want to change jobs. The 2007 to 2009 recession was officially over during the year 2009, and here we are still with 9.2 percent unemployment. So this month happens to be the second-year anniversary of the official start of the recovery. But what kind of a recovery, with 9.2 percent unemployment? It seems to be an unofficial recovery; in other words, a recovery in name only. We have had about 2.8 percent annual growth average per year of that 2 years; and, of course, I just said the growth of the last quarter was revised downward. When we compare what we have during this recovery from what was a very bad recession with the recovery of the last deep recession, which was in 1981 and 1982, we compare this 2.8-percent growth now with a 7.1-percent growth for the recovery after the 1981 to 1982 deep recession--of course, we can go even further because, as I said, compare 7.1-percent growth after the deep recession of 1981 and 1982 with the 2.8-percent average growth so far during this 2 years of recovery, which has now slowed down to probably 1.5-percent growth. So statistically and actually, and for the people who are unemployed, recovery has, in fact, been very stalled since its very beginning 2 years ago, as we celebrate the 2- year anniversary of a so-called recovery, and still with 9.2-percent unemployment. I say we must change course. If we want to go back to comparing now with the 1983 and 1984 period of time when we had a much more vibrant recovery, people tend to blame the weak economy today, during this recovery, on high personal savings rates. But, in fact, people are spending more now than they did in the 1983 to 1984 recovery because, today, the savings rate is about 5.6 percent, and in 1983 to 1984, the other recovery, it was 9.4 percent. So we can't say people aren't spending enough is why we don't have a recovery. Then they tend to blame it on weak housing, but if we look at the difference between now and 1983 and 1984, that doesn't seem to be a very good reason. Net exports are less now than they were in the 1983 and 1984 recovery. The growth of consumption and the growth of investment is 60 to 70 percent less now than it was in the 1983 and 1984 recovery. So what can we learn from this history that made the recovery of 1983 and 1984, the last great recession we had compared to this recession, better than the recovery now? Why have we stalled today when we didn't stall in a comparable period of recovery after the last great recession? If the above doesn't explain it, then what does explain it? Why, then, was the recovery of the 1980s so much more vigorous than the recovery now if we are, in fact, in a recovery--and people would doubt that. That is the question where I think we can learn from history. Political leaders ought to learn from the lessons of the past. There are a lot of lessons that can be learned going back over a long period of time: mistakes made in the Great Depression of the 1930s, or let's say the gigantic inflation of the 1970s. The 1930s and the 1970s were tough decades, but during those tough times and remembering them--and maybe other tough times as well; I am just picking out the Great Depression of the 1930s and the gigantic inflation of the 1970s--but these lessons learned by political leaders in the 1980s and 1990s led us to very unprecedented growth during those two decades when 44 million jobs were created. If 44 million jobs were created during those decades, why do we have such small job growth now? I think the answer is that we went back to basic principles that this country was founded upon: political and economic freedom. The principles that dominated the decades of the 1980s and 1990s when 44 million new jobs were created aligned with the principles that are the foundation of our country: political and economic freedoms. Those were limited government, incentives to produce, incentives for entrepreneurship, emphasis upon private markets, and rule of law. These tended to be in ascendancy during the decades of the 1980s and 1990s and it led to monetary policy that brought about price stability. It brought about lower marginal tax rates. Regulations encouraged competition and innovation. We had welfare decisions that were devolved down to the States where they could be handled more efficiently, and we had spending restraints that led to balanced budgets during the late 1990s, paying down $568 billion on the national debt. So there was great hope that what was done during the 1980s and 1990s that brought about 44 million new jobs would extend into the 21st century and that we would continue to bring market-based principles into Social Security and other entitlement programs, bring market-based principles into education, bring market-based principles into health care. Because if these market-based principles worked during the 1980s and 1990s of the last century and created 44 million jobs, the success of that ought to carry over into other government policies so we could continue down the road of creating jobs instead of stagnating as we have now. But sometime after 2000--and that doesn't mean just after President Obama was elected, because there was a Republican President before that--but sometime after 2000 both political parties compromised--and I want to emphasize both political parties--on the principles of limited government. They did it for a multitude of reasons. Some of these reasons were that they thought government ought to control business cycles to a greater extent, that we ought to increase home ownership, and we know how that worked out: We ought to have a policy that people ought to be able to buy a house they can't afford. Now we know that is a stupid policy, but at the time we didn't know it; also the prescription drug issue, as an example, although there were some market-based principles put into that. But, anyway, there were a multitude of reasons why we ought to compromise the principle of limited government, but it ended up more interventionist and it made the Federal Government more powerful, and we ended up with unintended consequences: the financial crisis we still remember and we are still trying to get out of; the recession, which I have already talked about, of 2007 and 2009, of which we are celebrating 2 years of supposed recovery that isn't real recovery; we have had a great amount of expanded government debt; and now we have this nonexistent recovery with 9.2-percent unemployment. I think, looking back, how did this happen? I was here when it happened. It reminds me of the story about--well, I guess I ought to say it and then give the story. It happened so slowly, and all of these things added up to be bad to bring about the great recession, and now not a very good recovery, because each one of them happened independent of the other and without one relating to the other. So it reminds me of the story of the frog and the water. If you throw a frog in boiling water, he will jump out and live. If you put a frog in cold water and gradually heat it up to a boil, it is going to accommodate the changes and die. So these policies slowly developed and we got into the situation we are in right now. I will say it again: Change came so slowly, it crept up on us. Then, of course, what happened? The crash came. We had this Federal intervention in housing. I stated it before: Buy a house even if you can't afford it. We eliminated a lot of Federal Reserve accountability, particularly when they didn't have to report on monetary growth on a regular basis as they did before. Then we had these countercyclical fiscal policies that failed. We had, during periods of growth in our economy, unrealistically low interest rates by the Federal Reserve action. Then, of course, we had government bailouts. This has led to things all getting worse since 2009. We had more intervention. We had loose monetary policies, QE1 and QE2, of the Federal Reserve. We had a stimulus plan that was supposed to keep unemployment under 8 percent, and since it was passed in February of 2009, unemployment has never been below that. It has always been above 8 percent. It is 9.2 percent now, but it was even over 10 percent. We had the Cash For Clunkers Program. We had the first-time homeowners tax credit. All of these together have not brought recovery, even though the economists tell us we are in the second-year anniversary of a recovery. What did they bring that has stalled the recovery? What they have brought is more uncertainty, and more uncertainty is bad for the economy because, as I said when I started out, there is plenty of money out there in corporations. There are plenty of small businesses that want to hire, but they do not know what we in this Congress are going to do to them so they are not moving forward. Consequently, the unemployment rate is not going down. And right this very hour, as people are trying to find something that can pass this body and the other body so we do not have default, it even brings more uncertainty, and you read it in the morning paper, this morning's paper. So you have to come to the conclusion, with all of this intervention bringing about all this uncertainty, that big government is not a very good manager. Then, as I said, this did not happen just since President Obama became President. This happened over the period of time of this decade and maybe even going back a little bit into the other decade. But just since President Obama was elected, we have added yet more complex intervention: the health care reform bill, Dodd-Frank, the Consumer Protection Bureau. The President this very week has been talking about increasing taxes, only he does not use the word ``taxes.'' We have to have more ``revenue'' or we have to have ``balance.'' But it still adds up, all of these things out there, that government does not know what all these rules and regulations--do you realize that in health care reform, there are 1,690 delegations of authority to the Secretaries to write regulations? And they are not going to be written for years. But that brings so much uncertainty. So we have more uncertainty, plus unintended consequences that come out of these, like right now, rising health care costs because of the bill, deterring new investments because of Dodd-Frank and deterring risk-taking. Risk-taking is what entrepreneurship is all about, and entrepreneurship is mostly related to small businesses, where 70 percent of the new jobs are created. Government intervention is the problem because government intervention or government not making decisions all adds up to more uncertainty. So I think the solution is to unwind government intervention in all these regulations of EPA and all the other government agencies. Every day in the newspaper, you see some new regulation coming out. If you want to get people to hire, you ought to just shut down the printing presses for a while. One sure thing though: We can thank God we have run out of monetary and fiscal ammunition because it has not worked anyway. We are going to probably have a great deal of inflation because of what the Fed did. We have no more spending we can do because all the spending we have done has not done the good it was supposed to do. We need no more greater debt, and we do not have any more zero interest rates to put out there because that is practically where it is right now. Instead, what we need is spending controls, and what we need is free market principles. Historical evidence shows what works and what does not. I said what works and what does not is shown from the lessons learned from the depression of the 1980s and the gigantic inflation decade of the 1970s. So people in the 1980s and 1990s changed to policies that were market-oriented, and we created 44 million new jobs. So we ought to be learning from history. Historical evidence shows what works and what does not. And right this day, in this town, interventionists in the market control today. We need to restore less intervention, the policies of the 1980s and the 1990s to restore jobs. Remember, it created 44 million new jobs. I yield the floor.

Mr. GRASSLEY

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

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, at least two times in the last couple of months I have come to the floor to tell my colleagues about some work I am doing on investigation of waste, fraud, and abuse in the Defense Department and primarily to focus them on the work of the Inspector General's Office in regard to how they do audits. So I come to the floor today to renew my call for better audit reports. As a Senator dedicated to watchdogging the taxpayers' money, audits are a primary instrument in my toolbox. They are like a hammer and a wrench. They are the tools of the trade. But like other Members of Congress conducting oversight, I can't do audits. We don't have staff for that, so we must rely on the inspectors general of the various departments to do the independent audits of the work of those departments. So today I speak about the Defense Department inspector general. The audit should be the inspector general's primary weapon for rooting out fraud, waste, and theft. Audits should be the tip of their spear, and that spear should have a very sharp point. The mere possibility of audit should have the fraudsters--people who commit fraud--quaking in their boots, but that is not the way it is, at least not at the Defense Department. The audit weapon belonging to the Defense Department's inspector general is not as effective as it should be. This problem is not entirely the inspector general's own doing. The broken Defense Department accounting system is also to blame. It is incapable of generating accurate and complete finance and accounting data. When the books are in shambles, as they are, then there are no audit trails to follow, and following the money is how we get to the bottom of things when it comes to waste, fraud, abuse, and mismanagement. Of course, that makes the auditor's job doubly difficult. So the auditors need to adjust the audit strategy to meet the challenge that there is not a very good financial management system within the Defense Department. As a watchdog, degraded audit capabilities give me serious heartburn. It puts the taxpayers' money in harm's way. When we have unreliable accounting data coupled with ineffective auditing, theft and waste can thrive undetected. Those concerns are the driving force behind my ongoing audit oversight review. Starting in January of 2009, I began receiving anonymous letters from whistleblowers. They alleged gross mismanagement in the audit office. In response, my staff initiated an in-depth oversight review. It focused on audit reporting by that Inspector General's Office. On September 7, 2010, I issued my first report. It evaluated 113 audit reports issued in fiscal year 2009. That study determined that those audits, which cost the taxpayers about $100 million, were not on target. I offered 12 recommendations for getting the audit process back on track. Inspector General Heddell responded to my report in a very positive and constructive way. He promised to ``transform the audit organization.'' The newly appointed deputy for auditing, Mr. Dan Blair, produced a roadmap pointing the way forward. He, too, promised reform and transformation and the creation of a ``world-class oversight organization.'' All of this, of course, was music to my ears. All signals were very encouraging. But the big question before us now is this: When will the promised reforms begin to pop up on the radar screen? And that radar screen is our further reading of additional audits as they come out this fiscal year and into the future. When will we see sustained improvement in audit quality? To establish a solid baseline for assessing the highly touted transformation plan, my staff took another snapshot of recent audits. My latest oversight review is best characterized as a report card, and it was issued on June 1 of this year. Each of the 113 unclassified reports published in fiscal year 2010 was reviewed, evaluated, and graded. After each report was graded, all the scores for each report on each rating category were added up and averaged. This created a composite score for each of the 113 reports. Although 15 top-quality audits are highlighted in the report card, the overall score for all 113 was D-minus. That is low, I know. Maybe the score should have been a little higher. Obviously, the grading system isn't perfect. It may need some fine-tuning, and we are working on that. But I still believe it provides a rough measure of audit quality. Clearly, none of the 2010 reports reflected any reforms that Inspector General Heddell put in place in December of 2010 because all those reports were published 3 months before the reforms went into place before October 1, 2010. That was a good 3 months before those reforms were approved. Shortly after my report card was issued, Inspector General Heddell pounced on it. He objected to the low score. He complained that it did not adequately reflect $4.2 billion in what he calls ``achieved monetary benefits'' identified in the 2010 audits. To address Mr. Heddell's concerns, I had my staff ask the audit office to prepare an information paper on the reported savings. That document was provided to me on June 20. I call it a ``crosswalk.'' It takes me to the exact page in each report where savings are discussed and identified. This document lists $4.2 billion in ``identified potential monetary benefits'' and $4.2 billion in ``collections.'' These alleged savings were uncovered in 19 reports, including one classified report we didn't look at. After reviewing the crosswalk, I concluded that Inspector General Heddell had a legitimate gripe about the report card. The report card should have included a section on savings. The first time around, we did not give sufficient credit for those accomplishments. As a practical matter, we gave those reports only partial credit for pinpointing waste. I say partial credit because six of those reports were given top scores in my report card, so they did get some credit--just not enough credit. In order to fully assess Mr. Heddell's complaints, I directed my staff to reassess the scoring process for all 18 unclassified audits. In rescoring the reports, we asked ourselves key questions such as, Was the audit objective aligned with the inspector general's core mission? Did contract audits connect all the dots in the cycle of transactions? Did they match contract requirements with payments? Did the audits answer the key oversight question, which is, Did the government receive what it ordered at an agreed-upon price and schedule? Did the audit verify the exact dollar amount of alleged fraud and waste using primary source payment records? I do not have time to go into this, but the use of primary source payment records is very important if we are going to follow the money, and following the money is where we determine whether there is fraud, waste, and abuse. Other key questions we asked were: Were the recommendations tough and appropriate? Did they recommend accountability for waste and mismanagement? Did they propose workable remedies for recovering improper payments? How quickly were the audits completed? The answers to these questions take us right to the heart and the soul of an audit--any audit, in any department. They are a good yardstick for measuring audit quality. This is my bottom line: Were the audits hard-hitting, down-in-the- trenches audits that produced results or were they softball audits with no redeeming value? After completing the review, my staff upped the overall score of those 18 reports from a D-plus to a solid C. Excellence in several reporting categories pushed the scores up as follows: All reports were highly relevant and were aligned with the core mission. They detected and reported $4 billion in waste. Most reports offered reasonable recommendations for recovering unauthorized payments. Poor performance in other categories pulled scores down as follows: Most reports did not verify exact dollar amounts of waste using primary source payment records. I wish to emphasize again the necessity of using primary source pay records. Follow the money. Most dollar amounts for alleged savings were taken from untested Army budget documents. Most did not offer meaningful recommendations for holding responsible officials accountable for waste and mismanagement. Of course, in government, if people are not held responsible for what they do and accountable for what they do, then, of course, we do not see change in culture. So accountability and responsibility and holding people responsible is very important if we are going to bring changes. Then, lastly, I would say, most reports were old and stale, having taken far too long to complete. I wish to point this out by saying, the single biggest factor that keeps dragging the scores down into the pits is timeliness or lack of it and, in most cases, the lack of it. The Audit Office continues to publish old, stale reports. Of these 18 reports we reviewed and on which I am reporting to you, they took an average of 17 months to complete. Eight took a total of 168 months to complete, and none of these numbers includes the 4 to 6 months it takes to get an audit started. So we are looking at a minimum of 2 years to complete top- quality audits. Under my scoring system, audits completed in 6 months or less earn a grade A, those completed in 12 months earn a C, and those that take more than 15 months get an F. These 18 reports, of course, as we can see from my comments, were over the top. So they earned a grade of F for taking so long to finish. I have said this before, and I wish to say it again. The power of top-quality audit work is greatly diminished by stale information. Out- of-date audits have little impact--with the passage of time, records disappear, particularly financial records--because following the money is a very important part of good auditing. People retire and move on. Money cannot be recovered and no one can be held accountable, and without people being held accountable, we do not change the culture of organizations. The new Deputy for Auditing, Mr. Blair, is part of the problem. He has not set any goals for audit completion times. I hope he will do that. Reasonable goals need to be established. I would like to summarize. In my summarization, I would point out that I wish to talk about the $4 billion that was potential waste and was saved. These 18 reports clearly put the spotlight on $4 billion of potential waste. The auditors detected it. They reported it. They did exactly what they are supposed to do. That is a major accomplishment worthy of recognition and praise. So they ferreted out waste. They presumably saved the money. But what happened to the $4 billion? Busting $4 billion in waste did not produce $4 billion in savings. The savings touted by Inspector General Heddell were lost, in a sense. Then there is a technical lingo around government: The money got reprogrammed. In plain English, that means it got put to better use but not necessarily saved. As seen through the eyes of this skeptical watchdog, all the loose change got scooped up and shoveled out the backdoor and into the jaws of the Pentagon spending machine on some other program. That machine is known to have an insatiable appetite for money. The disappearance of the savings is part semantics. The word ``waste'' is not in the audit lexicon. Sprinkling waste with perfume and calling it savings does not make it savings. Perhaps if the auditors started calling it what it is--waste--it might be easier to reach the Promised Land, but they never got there. Mr. President, 99.9 percent of the $4 billion got spent. Only in government could we spend all the money and still claim savings. I yield the floor. I suggest the absence of a quorum.

Mr. GRASSLEY

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

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I don't intend to use but 1 minute because I spoke yesterday on this nomination, but I would urge my colleagues to support the nomination of Paul A. Engelmayer to be district judge. He is very well qualified, and I would encourage a ``yes'' vote. I yield back the remainder of my time.

Mr. GRASSLEY. I ask for the yeas and nays.

Mr. GRASSLEY

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

Mr. GRASSLEY. Mr. President, today the Senate will vote on the nomination of Paul Engelmayer to be United States District Judge for the Southern District of New York and Ramona Villagomez Manglona to be Judge for the District Court for the Northern Mariana Islands. The seat to which Mr. Engelmayer is being considered has been deemed a judicial emergency. With this vote, we will have confirmed 29 article III judicial nominees. Eighteen have been for such judicial emergencies. Ms. Manglona's confirmation vote marks the second article IV judicial confirmation this year. I am pleased we are moving forward with filling two more vacancies. We continue to make great progress in processing President Obama's judicial nominees. As of today, the Senate has confirmed 60 percent of President Obama's nominees since the beginning of his Presidency. That is not including the two Supreme Court Justices nominated by President Obama. As I am sure my colleagues recall, those nominations consumed a considerable amount of time in the committee and on the Senate floor. During this Congress, the Judiciary Committee has held hearings on more than 72 percent of the President's nominees. Another hearing is scheduled to take place this Wednesday. During the comparable time period for President Bush, only 64 percent of President Bush's nominees had hearings by this time. We have also reported 64 percent of the judicial nominees, compared to only 56 percent of President Bush's nominees. Let me say just a few words about Mr. Engelmayer and then Judge Manglona. Mr. Engelmayer graduated summa cum laude from Harvard University in 1983. He then graduated magna cum laude from Harvard Law School in 1987. Following law school, the nominee clerked for Judge Patricia Wald on the U.S. Court of Appeals for the District of Columbia and then for Justice Thurgood Marshall of the Supreme Court of the United States. After his clerkships, Mr. Engelmayer joined the U.S. Attorney's Office for the Southern District of New York as an assistant U.S. attorney. In 1994, he became an assistant to the Solicitor General of the United States. In 2000, the nominee entered private practice with Wilmer Hale and was later named Partner-in-Charge of the New York office. The ABA Standing Committee on the Federal Judiciary has given Mr. Engelmayer a unanimous ``Well Qualified'' rating. I support this nomination and congratulate him on his professional accomplishments. Now I have a few words about Judge Manglona. Judge Manglona received her bachelor off arts degree from the University of California at Berkeley in 1990. In 1996, she graduated from the University of New Mexico School of Law. Following law school, the nominee clerked for the Superior Court of the Commonwealth of the Northern Mariana Islands. She then worked in the Attorney General's Office and in 2002, the Governor appointed her attorney general for the Northern Mariana Islands. In 2003, she was appointed to serve as an associate judge for the Northern Mariana Islands Superior Court. During her time on the superior court, she has also served as a judge pro tem on the Guam Superior Court and the Guam Supreme Court. The ABA Standing Committee on the Federal Judiciary has rated Judge Manglona unanimously ``Qualified.'' I also support this nomination and congratulate her on her professional accomplishments. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, I come to the Senate floor to tell my colleagues why I support the issue of cap, cut, and balance. On August 2, our Nation will be unable to borrow money to meet our current obligations. We have known for a while this was coming. Our annual deficits have been near $1.5 trillion for the past 2 years and are going to be that large this year as well. With deficits of that size, no one should be surprised that we have hit the debt ceiling, which raises the question then: What has the President offered to confront this looming crisis? I ask that question because people expect a President to lead, and we have had an executive budget and an executive budget law since I think the 1920s putting the President in the lead on these issues. So I ask another question: What has the Senate Democratic majority done to address our deficit crisis? Because it is the responsibility of the majority to present a budget to the Congress of the United States, and we have not had a budget resolution for more than 800 days now. So I think you can draw the conclusion, whether it is the President of the United States or the Senate majority, the answer is simple: Not much has been done. Last year, President Obama virtually ignored his own deficit reduction commission. Remember, in February 2010 the President appointed a lot of people to a deficit reduction commission to give us a plan of what could be done about this fiscal situation that has happened so dramatically in the last 2 years, and there was no recognition in December when they reported that the President said that is the thing that should be done in this country. This year, he did offer a budget, as he has to do under the budget law, February 14 of this year. That budget would increase spending, increase taxes, and still add trillions to our debt. Everybody would think that a Democratic President suggesting a budget would be well-received in a body that is controlled by the same political party. But that budget he presented in February was so ill- conceived and out of touch that it was defeated here in the Senate by a vote of 97-0. Let me emphasize that by saying not a single Senator of either party voted for President Obama's budget. Of course, it is very obvious that every member of the President's party said no to the President's budget. For most of this year, President Obama said we should raise the debt ceiling without taking any measures to address our long-term deficits and debt. It was the position of this administration that Congress should simply rubberstamp another debt ceiling hike with no plan in place to reduce our deficits. That plan was voted on in the House and was soundly rejected there as well. All of the Republicans and nearly half of the Democrats in the other body voted against increasing the debt ceiling without deficit reduction. So it seems to me we have a lot of bipartisan agreement, when people say we have no bipartisan cooperation, that with the Senate's vote on the President's budget and in the other body with nearly half of the Democrats opposing a debt ceiling without deficit reduction, that there is a clear understanding in a bipartisan way in the Senate that the President's budget spends too much, taxes too much, and leaves too much debt. In the House of Representatives, there is a strong feeling that is bipartisan that if you are going to have a debt ceiling increase, there needs to be deficit reduction. So don't ever say there is not bipartisan agreement, because it has been expressed in votes in both Houses. The President then gave a budget speech in April, and I presume he recognized the inadequacy of his budget presented to Congress in February. He outlined a budget framework that would reduce that budget that was presented in February by $4 trillion over 12 years. So the President very quickly in about 60 days came to the conclusion that his budget was out of step with what people of even his own political party felt was necessary so he could find $4 trillion to trim out of it. But do you know what he hasn't done yet that a President ought to do in an environment where we have an executive budget process? He still hasn't presented the details of that budget. The Director of the Congressional Budget Office, Dr. Elmendorf--as we all know, a person who is a devoted public servant, doing what is intellectually right all the time when he tries to help us decide how much money taxes are going to bring in or how much is going to be spent on a particular policy of Congress--was asked if he could estimate the budget impact of this new framework that came with the President's speech on April 13, in which he came to the conclusion you ought to spend $4 trillion less than what he thought he could spend on Valentine's Day. That is not necessarily a Valentine's gift in his February budget. This is what the CBO Director said in regard to that April 13 speech. He said: We don't estimate speeches. We need much more specificity than was provided in that speech for us to do our analysis. But, so far, the President has not provided those specifics. We have heard a lot from the White House about the need to come up with a plan, when the President has not presented a plan. The White House itself has never offered a single debt ceiling proposal for voters, and the Senate Democratic leadership has also seriously shirked its responsibilities because, as I said once before today, they have not put forward a budget in more than 800 days, even though the law requires that they do it. Every family in America who works hard and sacrifices to pay their bills ought to be ashamed of the failure of the Senate to offer a budget, in violation of the law. In sharp contrast, Members of the House fulfilled their responsibility and passed a budget earlier this year. So the very same majority party in this body that has not presented a budget for 800 days has done nothing in regard to the House budget but demagog. While they can't find time to compile their own budget, they sure found time to make speeches that are derogatory about the House budget. The House budget, then, obviously means the House of Representatives did their responsibility under the law by presenting a budget and adopting a budget. While Members on the other side come to the floor to oppose and demagog the bill I am speaking about--the cut, cap, and balance bill-- they have offered no plan of their own. While there is now a framework from the so-called Gang of 6, their plan also lacks any specificity. Perhaps that is the political strategy the other side has chosen. Voters and the American people cannot be upset with the position you have taken if you have not taken a position. It is like a rule for political leaders: You never get in trouble for a speech you do not give. Perhaps this strategy may be politically expedient, but it is going to drive our economy and our country off the cliff. The strategy of placing a higher priority on the next election rather than the economic and fiscal situation facing our country is how we got into this mess. Based on the lack of proposals put forth by the other side, one could assume they are perfectly content borrowing 40 cents for every dollar we spend. Are they pleased with the deficits of $1.5 trillion annually? We could conclude they must be because they have not offered a plan to reduce the deficits. On top of that, they have argued for tax increases. They must believe we have a revenue problem. According to their argument, the American people are not handing over enough of their money to satisfy the needs of Washington to spend. I am not sure we can ever tax high enough to satisfy the attitude in Congress to spend. In fact, if somebody would tell me how much money they really need from the American people to satisfy their appetite to spend, and I could get a limit on it and it were a hard limit, I might even vote for it because I would like to have people say they are finally satisfied, that government ought to be so big but no bigger. But I never get those sort of broad statements in the Congress. So I have come to the conclusion that we cannot raise taxes high enough to satisfy the appetite to spend. But because we are borrowing money, the economy is not growing, and jobs are not being created because Washington is spending too much. Of course, the other side believes the economy is not growing because we are not spending enough from Congress. Remember, just a few years ago they passed the $800 billion so-called stimulus as a means to keep unemployment below 8 percent. That was early February 2009. That is when Speaker Pelosi said: Yes, we wrote the bill. We won the election. So employment shot above 8 percent right away. It got up over 10 percent. It is at 9.3 percent. So the promise of a $830 billion stimulus keeping unemployment under 8 percent just did not work. What did they do under those circumstances? They borrowed money and spent it on government programs. Where is the U.S. economy today? I will say it again: 9.2 percent unemployment, more than 14 million Americans out of work, and now the national debt is more than $14.3 trillion. This experiment called the stimulus proved that government spending does not stimulate private sector job growth. Do you know why? Government consumes wealth; government does not create wealth. The only jobs created by government are government jobs. They don't add value to the economy; they are a cost to the economy. Do we have to have government? Yes. Do we have to have government employees? Of course we have to have government employees. But to think we can hire more government employees and create wealth is false. The fact is, we are the hole we are in because of our spending problems, not because we do not have enough revenue coming in. Look at this historically. Spending has averaged about 20 percent of our gross national product. That is probably over four or five decades. Today and in recent years spending has grown to 25 percent of the gross national product. This level of spending cannot be sustained, particularly when revenue has historically been around 18 percent of GDP. This very day it is less than 18 percent because the economy is not growing, but a 50-year average is 18 percent of GDP. For my colleagues who think we can reduce deficits by increasing taxes, they need to understand it just does not work. Professor Vedder of Ohio University has studied tax increases and spending for more than two decades. In the late 1980s he coauthored, with Lowell Galloway also of Ohio University, a research paper for a committee of Congress called the Joint Economic Committee that found that every new dollar of new taxes led to more than $1 of new spending by the Congress. In other words, raise taxes $1 and you think we would go to the bottom line and reduce the deficit? But, no, $1 coming in, we spend more than $1, so we make the deficit worse. Professor Vedder has now updated his study. Specifically he found: Over the entire post World War II era through 2009, each dollar of new tax revenue was associated with $1.17 of new spending. History proves tax increases result in spending increases. We know increasing taxes is not, then, going to reduce the deficit. Instead of going to the bottom line, tax increases are a license for Washington to spend even more. History also shows that tax increases do not increase revenue. Everybody thinks if we raise the marginal tax rates we will bring in more revenue. But the taxpayers, workers, and investors of this country are smarter than Members of Congress are who believe that. Regardless of the rate, over the past 40 years--I am sorry, I don't have a chart with me. I had a chart with me a week ago that demonstrated this. But if you listen closely, you will get the message of the chart. Regardless of the rate of taxation, over the past 40 years revenue has averaged, as I said before, about 18 percent of gross domestic product. Higher tax rates just provide incentives for taxpayers to invest and earn money in ways that reduce their tax liability. We cannot tax our way out of this problem. We have a spending problem, not a revenue problem. That is why I am supporting the only plan that has been put forth to address our deficit and debt problem: the cut, cap, and balance plan passed by the House with the bipartisan support of 234 Members. This plan is the only plan offered to cut spending in the near term. We need to halt and reverse the trend of the last 2 years when government spending increased by 22 percent, not even counting the failed stimulus program of another $830 billion. We cannot increase expenditures 22 percent when the growth of the economy is about 2 percent. It just does not add up. That is how we get into trouble, and that is how we have increased a 50-year average of the national debt from about 35 percent of gross national product to--after 2 years, it is now 65 percent, and it is on a path to go over 90 percent. We know where Greece is right now when they are over 100 percent. It is going to lead to failure. We are on that path right now, and we have to preempt that. This bill before us also will impose budget caps to get our spending down to a manageable level compared to our gross domestic product. Finally, it would impose a balanced budget amendment to our Constitution, similar to what--I don't know whether it is 46 States or 49 States--but most States have a constitutional amendment requiring a balanced budget. You know what. It works. We have to stop to think, if a State that is as liberal as New York, if they can elect a liberal Democratic Governor, and if he can cut, cut, cut, to live within that constitutional requirement of a balanced budget, it ought to be something we can do in Washington DC. It is a discipline that works in the States. It is a discipline that we need through our Constitution so when we take an oath to uphold the Constitution, the requirement of a balanced budget is something we swear to, and we will deliver on our promise to the American people. It only makes sense to impose a requirement that we live within our means. Washington proves again and again that it needs this kind of discipline. I say to my colleagues: If you do not support this plan, then offer your own plan. You know the debt limit must be increased, but you also know we must take action to reduce the future levels of deficits and begin to bring our debt down. Where is your plan to do that? Where is your budget resolution that has not been presented in the last 800 or more days to the Senate, violating the budget law? How will you meet the responsibilities, then, of being elected to this office where you take an oath to uphold the laws and the Constitution of the United States? The trajectory of our debt is alarming. It will soon undermine our economy and our economic growth. If we do nothing, our children and grandchildren will have fewer economic opportunities than we have had. So this is not just an economic issue, this is not just a fiscal issue, this is a moral issue of whether this generation, my generation and people who are even younger than me but spending a lot of money, ought to live high on the hog and leave it to young people to pick up the bill. Without a plan to put our fiscal situation on a better path, the next generations will have a lower quality of life than the one we have experienced. We cannot let that happen. We must take action to correct our course. I urge my colleagues to support the cut, cap, and balance plan. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask that the order for the quorum call be suspended.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, the Supreme Court earlier this month issued a very important decision which bothered me--a decision that I think shows that dissenters in this decision are judicial activists. It is important not only on the merits of the case but because it shows how this country is only one vote away from unprecedented judicial activism. The Obama administration is encouraging this judicial activism. The Obama administration is taking legal positions that threaten the role of Congress as a coequal branch of our government. Those positions challenge the separation of power that is designed to protect the freedom of Americans, and even the right of people to govern themselves, which is the basis of representative government and the purpose of the Congress. The United States happens to be a party to the Vienna Convention on Consular Relations. This treaty gives rights to the citizens of countries who are parties to that treaty to have access to their country's consular officials if they are arrested abroad. There are some foreign nationals in this country who were sentenced to death without those rights being respected. All of these death sentences appear to be valid under the American Constitution. The story is complicated, but in 2008 the Supreme Court ruled that failure to comply with the treaty was not an obstacle to the execution of a foreign national who had been sentenced to death. This was the case even if the President ordered a State to allow the criminal to challenge his sentence in light of the treaty, and even if the criminal obtained a judgment from the International Court of Justice that his conviction violated international law. The Court said that Congress could pass legislation to make the treaty apply to people on death row who had not received consular access. We in the Congress have never passed such a law. Now to the Supreme Court case that concerns me in light of this background on the consular relations treaty. In 1994, Humberto Leal Garcia, a Mexican national, kidnapped a 16-year-old girl, raped her, and bludgeoned her to death. He did not ask for access to the Mexican consul, and he did not receive access. He did not challenge his failure to receive consular access during his trial. Only after he brought State habeas corpus litigation did he raise this claim; and even then, he did not raise consular notification as an issue in his first habeas corpus petition. Mr. Leal did obtain a ruling from the International Court of Justice that his conviction and sentence were obtained in violation of international law. The International Court of Justice ordered that he was entitled under national law to receive another review of his conviction and sentence, regardless of whether habeas law allowed him to raise such an issue. But that ruling is obviously not binding on American courts, as no country in the world, including the country of Mexico, enforces International Court of Justice rulings as part of its domestic law. As his execution date approached, Mr. Leal sought a stay in the Supreme Court. Since Mr. Leal received a fair trial under American law, and there was no question concerning his guilt, his request should have been rejected, and rejected unanimously. But that is not what happened. He was executed, but the Supreme Court's ruling was shockingly close--5 to 4. The Department of Justice, through the Solicitor General, Donald Verrilli, asked the Supreme Court to grant the stay. Its brief was truly astonishing. It did not argue that there was any doubt Mr. Leal was guilty. It did not say Mr. Leal had been harmed in any way by the Vienna Convention violation. It cited no case that provided an example where a stay had been issued in similar circumstances. It raised no arguments for the stay that were based on American law, because American law did not support a stay. Instead, the Department of Justice relied on international law and made policy arguments. It argued that Mr. Leal's execution would create negative effects on America's international relations. It argued that his execution would violate our international legal obligations, and it argued that the mere introduction of legislation--understand this, just introducing a bill and at the same time having the support of the Obama administration-- should allow the Court to issue a stay to preserve its jurisdiction if time were given to allow the bill to be enacted. This is the position that worries me and threatens the role of Congress as a coequal branch of government. Everyone knows bills are not laws. Bills are what we introduce. If we pass bills, they become law. The Founding Fathers made it very difficult to enact laws. There are two Houses of Congress, and each has to pass the same version of the bill and the President has to sign that bill or a supermajority of both Houses must override a veto. This was done to protect the rights of the American people. Only if a bill passes through a specified process can a bill become a law. A court following the rule of law can only enforce what actually becomes a law. There may be times when an agency might pay attention to a bill that is introduced, but that is an agency. In the case of courts, a court should only apply what has actually become law--in other words, a bill passing both Houses of Congress, signed by the President--not pay attention to a bill that has just been introduced. The Solicitor General's brief relied on a bill, not a law. The name of the bill is the Consular Notification Compliance Act. That bill would retroactively allow prisoners on death row whose Vienna Convention rights were violated yet another bite at the apple. If the bill passed, they would be able to delay their death sentences--lawful sentences under American law--with another round of judicial review for compliance with what? International law. Although the bill is strongly supported by the Obama administration, it has not passed, so it is not law, it is a bill. It is going to have a hearing soon, but it is not scheduled to be placed on the committee agenda for markup. It is clear there is no chance this Congress would pass a law that retroactively allowed foreign nationals who face lawful death penalties another round of judicial review based upon the Vienna Convention. Congress simply will not pass a bill that gives Federal judges another opportunity to display their dislikes of the death penalty by delaying cases for no good reason. Only Congress can legislate. But the Obama administration argued in the Court that the Supreme Court should grant a stay, even though Congress has not legislated, simply because the executive branch strongly supported the bill, which theoretically-- but only theoretically--could pass at some future time. Do you know what disturbs me? Four Justices agreed with this outlandish position. There is absolutely no precedent for the position. These dissenters accepted an Obama position that was made out of whole cloth. When courts rule based on law, we have the rule of law. When they rule based upon policy preferences, we have judicial activism, not the rule of law. The Obama administration asked for a stay based upon policy preferences, based on international law, and based on that administration's view that a bill it supports takes overwhelming precedence over a considered decision of Congress not to pass that legislation. Four Justices--just one short of a majority--were willing to disregard American law in favor of international law, and also in favor of policy implications, and also based upon a bill being introduced in Congress. This is not only inconsistent with the rule of law, it is a threat to American democracy. How extreme. The American people, through their elected representatives, have enacted the death penalty and established limits on habeas corpus petitions that impede executions. The people's representatives--those of us in the Congress--also declined to enact a bill to implement the Vienna Convention. Notwithstanding that decision of the people's representatives, this administration and four Justices would have used an unpassed bill to delay a death sentence. How extreme. They would have had the courts not allow the preferences of the American people as expressed through their elected representatives but, instead, their own policy preferences. How extreme. But under our system of government, the results of the democratic process are entitled to prevail, unless the Constitution--and only the Constitution--clearly provides otherwise. The position of the Obama administration and the four dissenting Justices also is harmful to American democracy in yet another way. If the American people dislike what Congress is doing, it is very simple. In the next election, they can elect new Representatives and Senators. They can ask that Federal judicial nominees be stopped or that laws be passed that overturn judicial decisions made under Federal law. But what are the American people to do if judges make decisions based on the views of foreign governments and international tribunals that are contrary to our very own law? What if judicial rulings are designed to enforce decisions of the International Court of Justice, rulings that are not binding as Federal law? Americans cannot influence the views of foreign governments or the rulings of international tribunals. Had the Obama administration and the four dissenting Justices prevailed, the American people would have lost a part of the right to govern themselves. That right would have been replaced with ``obedience without recourse'' to foreign powers over whom our people exercise no voice. That is not the system the Founding Fathers bequeathed us. The question of whether courts should apply American law or foreign law is of great concern to me and to other members of the Judiciary Committee, and maybe to a lot of Senators who aren't on that committee. Those of us on the committee have thought about this specific question long before this recent Leal case that has come, I guess within the last 3 weeks. And I have asked judicial and administration nominees about these very issues at their confirmation hearings. For instance, just a few months ago, I posed a question to the nominee for Solicitor General, Mr. Verrilli, about an amicus brief he had filed on behalf of foreign nationals who had been sentenced to death. In that brief, Mr. Verrilli argued not that the prisoner's constitutional rights had been violated, but that ``[i]t is in the interests of the United States and the world community that the legal standards of the United States should reflect and be informed by international human rights.'' I asked Mr. Verrilli, were he confirmed, whether there were any circumstances in which he would argue before the Supreme Court in a death penalty case that the Court be ``informed by international rights?'' He responded: I will adhere to the view that foreign law, including international human rights law, has no authoritative force in interpreting the Constitution and laws of the United States, except in those rare instances where federal statutes incorporate or make international and/or foreign court decisions binding legal authority. Responding to my question on the difference between international human rights and our own constitutional rights, Mr. Verrilli stated: International human rights are set forth in international treaties, conventions and customary international law. They are not binding and enforceable in the United States unless Congress has made them so. The Leal case does not involve a Federal statute of the type Mr. Verrilli cited, nor does it concern any international standards binding and enforceable in the United States because Congress made them so. I believe Mr. Verrilli's brief as Solicitor General is very inconsistent with what he related during his confirmation hearing. The brief relied on international human rights, and its only reference to American law was this bill that I have referred to--not a law, a bill--which, under our constitutional system, is as different from a law as night is from day. I would also note that Mr. Verrilli stated during his confirmation hearing: If the Attorney General [or the President] directed that I take a position . . . one that I believe to be an indefensible view of the law, I would not lend my name or that of the Office of Solicitor General to carrying out the order, and would certainly resign rather than carry out the order. Mr. Verrilli obviously does not believe that reliance solely on international law and a bill is an indefensible view of the law. I disagree with him on that point. Similarly, during her confirmation hearing, Justice Sotomayor was asked about the application of foreign or American law. She was one of these dissenters. She stated: I do not believe foreign law should be used to determine the result under constitutional law or American law, except where American law directs. In the Leal case, foreign law should not have been used to resolve the case because American law did not direct that foreign law apply. When Justice Kagan appeared for her confirmation hearing, she stated that in deciding cases, ``you're looking at law all the way down, not your political preferences, not your personal preferences.'' However, the law in the Leal case is clear. Executive branch policy arguments and unenacted bills are not law. I am not saying the Solicitor General or these Justices who dissented lied at their confirmation hearings or made a mockery of the confirmation process, but Judiciary Committee members foresaw cases such as Leal and asked the nominees to address the role of foreign law in constitutional cases. I believe, although they do not, what these individuals wrote in the Leal case is inconsistent with what they said at the time of their confirmation hearings. Finally, one of these issues could arise again in a different legal context. Like the death penalty cases, there is ongoing litigation challenging the constitutionality of the Defense of Marriage Act. Like the death penalty cases, the Defense of Marriage Act is the subject of a bill. The particular bill--called the Respect for Marriage Act-- notwithstanding its Orwellian name, would repeal the Defense of Marriage Act. The Department of Justice has already decided not only to defend the Defense of Marriage Act but now argues the Defense of Marriage Act is unconstitutional. The Department, in light of its Leal brief, may be considering making the implausible argument the courts should strike down the Defense of Marriage Act simply because a bill has been introduced to repeal it--the same argument used in the Leal case before the Supreme Court. You might well argue the introduction of a bill that is strongly supported by the administration is enough to lead courts to believe the Congress has already repealed the law anyway, so why not have the Court simply declare the law unconstitutional. The Department should not make such an argument, and I can tell the courts that, like the bill to make the Vienna Convention apply retroactively to convicted criminal defendants who face the death penalty, this Congress will not--and I repeat, will not--pass the Respect for Marriage Act and courts should not consider its introduction in resolving DOMA's constitutionality. Mr. President, obviously, I am disappointed the Obama administration has advanced policy arguments rather than legal arguments in the Supreme Court. How ridiculous it is to try to convince the Supreme Court that just because a bill is introduced they ought to make a decision based upon that bill being introduced. In the absence of arguments based on American law, it should not have asked the Court to rule based on policy. Rather, it should have either argued based on American law--even if American law did not conform to its view of desirable policy--or it should have declined to participate in the case. I am also disappointed that four Supreme Court Justices voted to advance their views of policy rather than law, which is the essence of judicial activism. We were--or you could say we are--only one vote away from a Supreme Court majority that would have applied policy preferences in favor of international law rather than American constitutional law. We were only one vote away from a Supreme Court majority that would have usurped the separation of powers by considering a bill to be the same as a law that Congress passed. And we were only one vote away from a Supreme Court majority that would have applied the ruling of an international tribunal over which Americans have no say rather than a body--as in this Congress of the United States--that is representative of and answers only to the American people. I yield the floor, and I suggest the absence of a quorum.

Mr. GRASSLEY

Mr. GRASSLEY. Yes.

Mr. GRASSLEY. Madam President, now you hear the other side of the story. It is a privilege for me to come to the floor of the Senate to speak on the issue of the bill before us, which is a sense-of-the- Senate bill, which means basically the Senate is debating something that is not shooting with real bullets. In other words, it just expresses the sense of the Senate, it does not change any law, so it doesn't amount to much. As the President and congressional leaders continue to debate how best to reduce the deficit, it seems my friends on the other side of the aisle and my President continue to demand a tax increase as part of any deal. For sure, any discussion of reducing the deficit should include a discussion of tax reform, but tax reform is different from tax increases. You heard the previous speaker speak about Republican plans that deal with reducing expenditures, and that is right, because we believe the deficit problem in this country is not because the American people are undertaxed, it is because Congress and Washington overspend. However, what is being discussed with this bill currently is tax increases on targeted groups, supposedly because they can afford it. This is not tax reform. Professor Vedder of Ohio University has studied tax increases and spending for more than two decades. In the late 1980s he coauthored with Lowell Galloway, also of Ohio University, a research paper for the Congressional Joint Economic Committee. That study found that every new dollar of new taxes led to more than $1 of new spending by the Congress. It did not reduce the deficit then--you raise a dollar, you increase the deficit. I will be a little more specific. Working with Stephen Moore of the Wall Street Journal, Professor Vedder updated that research last year and came to the same result. Specifically, Moore and Vedder found: Over the entire post-World War II era, through the year 2009, each dollar of new tax revenue was associated with $1.17 in new spending. That is like a dog chasing its tail. Very few dogs catch them, so when you raise a dollar here, common sense might dictate it goes to the bottom line, but it doesn't work out that way. It actually increases the deficit because Congress believes we have a new dollar coming in, let's spend $1.17. History proves tax increases result in spending increases. We know that increasing taxes is not going to reduce the deficit. History also shows that tax increases do not increase revenues. That is probably contrary to most people's common sense, but I have a chart here that I think demonstrates this very clearly. I will be somewhat repetitive because I want to leave my remarks and go to this chart, and I will refer to it again. What this chart basically shows is that over a long period of time, going back to World War II to the present, all the taxes coming into the Federal Government have been roughly 18.2 percent of gross national product, but pretty much even-steven across the board. Sometimes it is up a little bit, sometimes down a little bit, but for 50 or more years it is averaging about 18.2 percent of gross national product. What this chart also shows is--contrary to what you believe, that if you raise taxes you are going to bring in more revenue, and if you reduce taxes you are going to bring in less revenue--that is not true. That gets to this issue of taxing the wealthy. It gets to the issue of raising taxes on anybody. From World War II until Jack Kennedy, President Jack Kennedy, we had 90 percent marginal tax rates. Then from President Kennedy to President Reagan, we had 70 percent marginal tax rates. Then in the last half of the Reagan administration and up until 1986 it was reduced to 50 percent, under Reagan's administration. Then Reagan had another tax bill and it was reduced to 30 percent. Then of course President Bush the dad made this promise in the campaign: Read my lips, no new taxes. But he didn't keep his promise so the taxes went back up to about 40 percent for a period of time until you get to a period when Bush the son comes into office and the marginal tax rate is reduced to where it is now, 35 percent. But whether you have high marginal tax rates or low marginal tax rates, you get about the same amount of revenue. I am going to be repetitive on that point but it is very important that you understand that. History shows that tax increases do not increase revenues. The chart here shows that revenue as a percentage of gross domestic product hovers around 20 percent as far back as post-World War II. I said in my off-the-cuff remarks it averaged out about 18.2 percent. This chart also shows where you have high and low marginal tax rates over those same years. During the last years of World War II, we had a 94-percent tax rate. Then from 1950 through 1963, it was 90 percent, as this chart shows, and under President Kennedy--and I want to emphasize that he was a Democrat--he was smart enough to reduce marginal tax rates to incentivize entrepreneurship. He reduced the marginal tax rates to 70 percent. They stayed around 70 percent until President Reagan brought it down to 50 percent. Let me say at this point, I gave President Reagan credit for it, but I was a brandnew Member of the Senate Finance Committee in 1981 and we had some very brave Democrats on that committee who believed that 70 percent was too high and it was going to promote entrepreneurship more if you reduced it to 50 percent. President Reagan gets credit for it. I don't think any Republican on the Senate Finance Committee could take credit for it because we would have been accused, as we have just been accused, of wanting to reduce taxes on wealthy people, so thank God there were a lot of smart, intellectually honest Democrats on the Senate Finance Committee in 1981, who said the tax ought to be reduced to 50 percent. Well, then it went down to 30 percent when we reduced marginal tax rates further during the Reagan administration. Then, as I said before, the first President Bush reneged on his promise to not raise taxes, and the marginal tax rates went back up to 40 percent and stayed there until the tax relief enacted under the second President Bush. During all of these tax increases and decreases, the amount of revenue as a percentage of GDP stayed roughly flat, with a 50-year average of 18.2 percent. So everybody thinks that if you raise the marginal tax rates, you are going to bring in more revenue--seemingly common sense but not true because the taxpayers, the workers in America, the investors in this country that create jobs are smarter than we are, but we don't think they are smarter than we are. And we have had 93 percent marginal tax rates, 70 percent, 50 percent, 30 percent, back to 40 percent, now 35 percent. Regardless of that rate, we get roughly the same amount of revenue. Higher tax rates just provide incentives for taxpayers to invest and earn money in ways that result in the least amount of taxes paid or you might say it this way: Some people just say to themselves that they are not going to work hard because why should I work so darn hard if I am going to send the money to Washington for people in Congress to spend and waste? In other words, taxpayers have decided they are going to give us politicians in Washington just so much money to spend, and it comes out about right here. We ought to have some principles of taxation that we abide by, and I abide by this principle that 18 percent of the gross domestic product of our country is good enough for the government to collect and to spend. That leaves 82 percent in the pockets of taxpayers for them to decide how to spend. When you send money to Washington with 535 of us deciding how to spend it, it doesn't do as much economic good or turn over as much in the economy and create jobs as it would if it was left in the pockets of the 130-some million taxpayers individually to decide how to spend it. This benchmark of 18 percent of gross domestic product is good, and it has been consistent throughout recent history. It is a principle we should keep in mind while we debate Tax Code changes. This level of taxation--another reason I say it is justified is it has not been harmful to the economy, as higher tax rates such as we find in Europe are harmful to the economy--much higher tax rates than we have in this country--and it seems to be a level of taxation that there has not been a great deal of revolt by the taxpayers of America against. There is another principle I would like to have you keep in mind; that is, What is the purpose of tax law? Those who support bills such as the one we have here currently debated, this meaningless bill, assume that the key objective for our Federal Government through the Federal income tax laws should be to ensure that income is distributed equally throughout the country as opposed to government taxing for the purposes of government but not for the purposes of the redistribution of wealth. In other words, the authors of this bill believe the Federal Government is the best judge of how your income should be spent. Bills such as the one we are considering today assume--I say it for a second time--assume that 535 Members of Congress know how to best spend the resources of this country, and presently that is about 18 percent, but that is not enough. Well, actually, they are spending more than 18 percent because the expenditures of this country add up to about 25 percent of the gross national product from the Federal Government because we borrow 42 cents out of every dollar we are spending today. It assumes that government creates wealth and should therefore spread it around the way they do in Europe. In fact, government doesn't create wealth; government consumes wealth. Only workers and investors, laborers, and people who provide capital and, in turn, people who use their brain to invent and create, is what creates wealth. Yet, as history shows, there is evidence that tax increases lead to more spending--and I quoted Professor Vedder--and that revenues as a percentage of gross domestic product pretty much stay the same regardless, even if the marginal tax rates are very, very high. It would be one thing for me to vote for a tax increase if it went to the bottom line: reducing the deficit. It is quite another thing to vote for a tax increase that just allows more spending and raises the deficit instead of getting the deficit down. The resolution before us now in the Senate requires us to concede ``that any agreement to reduce the deficit should require that those earning more than $1,000,000 per year make a meaningful contribution to the deficit reduction effort.'' The bill does not state that such a ``meaningful contribution'' would be accomplished through tax increases, but how else would the authors of this bill and the taxpayers intend to or make such a contribution? Let me make clear that I do not support this bill and will vote no on its adoption. However, I think it is a good thing we are debating such an issue. It is clear that those who support this bill believe those earning more than $1 million per year are not paying their fair share. Note, however, that just last year, these very same people believed that a single person who earned $200,000 or a married couple who earned $250,000 weren't paying their fair share. In evaluating whether people are paying their fair share, experts frequently look at whether the proposal retains or improves the progressivity of our tax system. Critics of lower tax rates continue to attempt to use distribution tables to show that tax relief proposals disproportionately benefit upper income taxpayers. We keep hearing that the rich are getting richer while the poor are getting poorer, don't we? Almost every day. This is not an intellectually honest statement, as it implies--what does it imply? It implies that those who are poor seem to stay poor and that those who are rich seem to stay rich. So I want to dispute that position. In 2007, the Department of Treasury published a report entitled ``Income Mobility in the United States From 1996 to 2005.'' The key findings of this study include the following: There was considerable income mobility of individuals in the U.S. economy during the period 1996 through 2005 as over half of taxpayers moved to a different income quintile over this period. Roughly half the taxpayers who began at the bottom income quintile in 1996 moved up to a higher income group by the year 2005. Among those with the very highest incomes in 1996--the top 1/100 of 1 percent--only 25 percent remained in the group in 2005. One in four 10 years later. So the poor aren't always poor and the rich aren't always rich. Moreover, the median real income of these taxpayers actually declined over this period. The degree of mobility among income groups is unchanged from the prior decade (1987 through 1996). So I used the group 1996 through 2005, and I am comparing it with the group 1987 through 1996, so I want to repeat that the degree of mobility among income groups was unchanged over a 20-year period of time. Continuing to quote: Economic growth resulted in rising incomes for most taxpayers over the period of 1996 through 2005. Median income of all taxpayers increased by 24 percent after adjusting for inflation. The real incomes of two-thirds of all taxpayers increased over this period. In addition, the median incomes of those initially in the lower income groups increased more than the median income of those initially in the higher income group. Therefore, whoever is saying that once rich, Americans stay rich, and once poor, they stay poor, is purely mistaken because America is a country and land of opportunity. Now, I want to say that the Internal Revenue Service data supports the analysis I just gave. I was done quoting at that point. A study of 400 tax returns with the highest income reported over 14 years--and I don't know whether these are the same 400 taxpayers my friend on the other side just referred to in his speech, but a study of 400 tax returns with the highest incomes reported over 14 years, from the year 1992 to the year 2006, shows that in any given year, on average, about 40 percent of the returns that were filed were not in the top 400 in any of the other 14 years. I got the impression that the top 400 taxpayers in the previous speech were maybe always the same people, but 40 percent were not in that group. The so-called shared sacrifice bill before the Senate now does not acknowledge these trends; hence, I think it is intellectually dishonest. It presupposes that anyone making more than $1 million should be contributing more to reduce a deficit that they likely did not create in the first place. We created it. The bill assumes that the folks in this income category have always made more than $1 million, that they haven't paid their dues on their way up the ladder of success and, as a result, should pay a penalty for their current success even if they are on the way down the ladder. The bill also assumes these folks will continue earning what they are earning now. As I just noted, however, the Treasury report and the IRS tax data contradict this position. I welcome this data on this important matter for one simple reason: It sheds light on what America really is all about, what this great country is all about--vast opportunities. Of course, as I just said in these statistics, but you can see it in a lot of different ways as well, we are a country of great economic mobility. This country is built by people from all over the world. Our country truly provides unique opportunities for everyone. These opportunities include better education, health care, financial security, and probably a lot of other things. But, most importantly, our country provides people with a freedom to obtain the necessary skills to climb the economic ladder and live better lives. We are a free nation. We are a mobile nation. We are a nation of hard-working, innovative, skilled, and resilient people who like to take risks when necessary in order to succeed. We have an obligation as lawmakers to incorporate these fundamental principles into our tax system. On another matter in this debate, we have also heard much about ``closing loopholes.'' Well, that sounds good. I don't want to tell you how I believe that ought to be done. There are things that are legal, and there are things that are not legal. There are things that are legal and there are things that aren't legal. Let me say if there are, in fact, loopholes to be closed, I would support closing them. During my tenure as chairman and then ranking member of the Finance Committee, I worked with colleagues from both sides of the aisle to cut off tax cheats at the pass. The American Jobs Creation Act signed into law in October of 2004 included a sweeping package to end tax avoidance abuses such as corporations claiming tax deductions for taxpayer-funded infrastructure such as subways, sewers, and bridge leases; corporate and individual expatriation to escape taxes; and Enron-generated tax evasion schemes. We closed them. One of the tax avoidance provisions the jobs bill shut down was so- called corporate inversions. Average workers in America can't pull up stakes and move to Bermuda or set up a fancy tax shelter to avoid paying taxes. Companies that do this make a sucker out of workers and companies that stay here in this great country and pay their fair share of taxes. So that was closed. Corporate inversions, we called that. We also closed loopholes used by individual taxpayers. The jobs bill contained a provision that restricted the deduction for donations of used vehicles to actual sales price. Prior to that fix, individuals were claiming inflated fair market values before they gave their car to a nonprofit organization. Then in the Pension Protection Act, which was signed into law in August of 2006, I championed reforms to deductions for gifts of ``fractional interests'' in art as well as donations to charities that were controlled by the donor. Because if you give money away, it ought to be given away. A person should not be able to control it after they give it away. The same way with art. In both cases, individuals were taking huge deductions for donations without providing equivalent benefits to the charities to which they donated. In addition to ensuring income and deductions are properly reported, I also supported giving the Internal Revenue Service more tools to go after tax cheats. The jobs bill contained provisions that required taxpayers to disclose to the IRS their participation in tax shelters and increased penalties for participating in such tax shelters as well as not disclosing such participation to the IRS. I also authored the updates to the tax whistleblower provisions included in the Tax Relief and Health Care Act which was signed into law in December of 2006. There was a whistleblower statute long before that, but because of the low dollar threshold, it encouraged neighbors to blow the whistle on their neighbors. So the 2006 changes I championed increased the awards for those blowing the whistle on the big fish--individuals and businesses engaged in large-dollar tax cheating through complex financial transactions. I don't know why it took the IRS so long to get this law under way because they have had plenty of whistleblowers come forward, but we have only had one time so far--I think we will get a lot of others now--but we have only had one time so far under this provision, which was instituted in April of this year, and we recovered $20 million for taxpayers that otherwise would have been lost to fraud--from one company. These are just a few examples of my support for provisions to stop abuses of the Tax Code to make sure everyone pays their fair share. If and when we get around to considering comprehensive tax reform, I look forward to shutting down any other abuses that exist. But first we need to be clear on what a loophole is. Itemized deductions are just that: itemized deductions. They are not loopholes. Similarly, deductions and tax credits that enable a corporation to zero out its tax liability are not loopholes. For instance, if a person had a loss last year, they can carry it forward to this year. The question of whether deductions and credits should be limited is a question that should be answered not to raise revenue but in the context of comprehensive tax reform. Eliminating deductions and credits for certain taxpayers should be subject to extensive review and extensive debate. Taxpayers should not be targeted for tax increases for political sport, as this resolution before us does. I wish to finish by summing up in three points, very quickly. First, according to this chart, tax increases don't--well, not according to this chart. That is the second point I will make. First, tax increases don't reduce deficits and they don't increase revenue as a percentage of GDP. Secondly, we ought to have some principles of taxation. First of all, this chart shows that we get about the same amount of revenue coming in over a 50-year period of time--about 18.2 percent of gross national product. We have high marginal tax rates, really low marginal tax rates, but it still brings in about the same amount of revenue. Second, we ought to have some principles of taxation that we abide by. Limiting revenues to the historical average of 18 percent of GDP should be one, while ensuring income equality should not be one. In other words, we raise revenue for the purpose of funding the functions of government, not to redistribute wealth. Last but not least, it is right to consider tax reform when discussing deficit reduction. However, the proposals put forth so far, including the current bill, are political proposals--not reform proposals. Tax reform requires Presidential leadership, and we are just now seeing that. I mean, we are not seeing it on tax reform, but we are finally seeing it on deficit reduction. But I don't think it is going to last very long. Madam President, I yield the floor, and I suggest the absence of a quorum.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, the State of Iowa has lost one of its native sons, and the Nation has lost a true patriot. SFC Terryl L. Pasker from Cedar Rapids, IA, was shot and killed in Panjshir Province, Afghanistan, while serving with the Iowa National Guard in support of Operation Enduring Freedom. He was 39 years old and was just completing his second tour in Afghanistan. My thoughts and prayers are with his wife Erica, his parents Mary and David, and those who knew him and cared about him. Terryl Pasker is described as an upbeat, religious man. He was known as a hard worker and he owned a contracting business in his civilian life. The loss of someone in their prime, with a bright future and a whole life left to live is a tragic thing. It gives us pause to reflect on the tremendous sacrifice we ask of our servicemembers, and have since the first minutemen rallied at Lexington and Concord. I would like to pay tribute to the life and service of SFC Terryl Pasker and ask that my colleagues join me in honoring his memory.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise to pay tribute to a noble fallen warrior. CAPT Matthew Gunnar Nielson of Jefferson, IA, gave his life for his country on June 29, 2011, during an attack by insurgents in Badrah, Iraq. He was 27 years old. My prayers are with Captain Nielson's parents, Roger and Christine, and all his family and friends who are feeling his loss. In a statement, his family said, ``Since Matt was a small boy he loved anything military, so he died doing what he loved best. Serving others was of the utmost importance to him and how he wanted to spend his life. He always gave his all, whatever he was doing. Matthew was a beloved son, brother, friend and Soldier. He's already home, and we know we'll be together again someday. Apart, but forever in our hearts. Psalms 11.'' What can I say about such selfless service and sacrifice? We just celebrated 235 years of independence and liberty, which is an occasion to reflect on the incalculable debt we owe to Matt and his comrades in arms over the years who have secured that legacy for us and for posterity. So long as we continue to have brave patriots like Matthew Nielson who are willing to give their all for their fellow Americans, our heritage as a free people will be in safe hands.

Mr. GRASSLEY

Mr. GRASSLEY. I would like to continue, if there is no objection.