Orrin Hatch

Mr HATCH

Mr HATCH. Mr. President, I rise today to discuss my vote in opposition to the President's nomination of Gina McCarthy as the Administrator of the Environmental Protection Agency. I praise Ms. McCarthy for her extensive experience and expertise in regulating air quality at the Federal level as well as at the State level. Throughout her career she has been able to be an effective regulator under Republican Governors as well as a Democratic President. Even with the opposition she faced during the months leading up to her confirmation, it was always clear to me that Ms. McCarthy would be approved. My ``nay'' vote was not against Ms. McCarthy. My vote was against President Obama's overreaching environmental policies and against the EPA. The environmental policies of this administration are clearly a war on fossil fuel and a war on Western jobs. The President's recent announcement of a Climate Change Action Plan will be implemented by EPA and will have a direct impact on jobs and the pocketbooks of the American people. This plan targets coal-fired powerplants by proposing Federal carbon emission standards that will cost billions of dollars nationwide to implement and will raise the price of electricity for private citizens as well as businesses. The Western United States is rich in coal, oil, and natural gas. We need to make it easier, not harder, to develop those resources. The development of the abundant and affordable energy that we are blessed with as a nation is crucial. The effort by this administration to quell the development of these resources is unacceptable. I cannot support them and, that being the case, I am not able to support the nomination of Ms. McCarthy.

Mr. HATCH

Mr. HATCH. Mr. President, over the last few years, I have come to the floor many times to advocate for comprehensive tax reform. I share the belief of many in Congress that tax reform is a necessary step to ensuring economic growth and prosperity in the future. This is why, as the ranking member of the Senate Finance Committee, I have made tax reform my top priority. We are now at a crossroads when it comes to tax reform. Before us there are two alternative paths. The first path is the one we took back in 1986. It is the path that former House Democratic Leader Dick Gephardt and former Treasury Secretary James Baker advised members of the House Ways and Means Committee and the Senate Finance Committee to take. As you will recall, they were two critical players in the last successful tax reform effort. In 2011, at one of our hearings, they advised us to not mix deficit reduction and tax reform. This was a joint Senate Finance and Ways and Means Committee hearing. To paraphrase these two former leaders: Each is a hard enough task by itself, but doing them together is nearly impossible. That is one path we can take. The path that separates our tax reform efforts from our deficit reduction efforts. In 2011, they both advised us not to mix deficit reduction and tax reform. They just basically said that each is a hard enough task by itself, but doing them together is nearly impossible. That is one path we can take, the path that separates our tax reform efforts from our deficit reduction efforts. The other path we can take is to condition tax reform on the raising of additional revenues. Sadly, that seems to be the preferred path of many of my friends on the other side of the aisle. I will never fully understand why, except their propensity to spend. According to many Democrats in the Senate, there can be no deal on tax reform unless they get a second significant tax increase this year. We heard just today from the Senate Democratic leadership that they want the Senate Finance Committee to use the Senate budget, which included nearly $1 trillion in tax hikes, as the model for tax reform. Essentially, what they are saying is that unless they get a big tax hike, we have to keep the tax system as it is, with all of its complexity, inequities, and distortions. Right now this position is held by many on the other side of the aisle, and it is the biggest barrier to fundamental tax reform. Today, I would like to take a few minutes to examine this position and to discuss the merits of conditioning tax reform on yet another significant tax increase. Last October, one of my friends on the other side put it this way: Tax reform 25 years ago was revenue neutral. It did not strive to cut the debt. Today we cannot afford for it not to. Our national debt today is approximately 73 percent of GDP. That is nearly double what it was in 1986. At first glance, this argument may appear to be reasonable. However, it falls apart under further examination. If my friends on the other side of the aisle were serious about deficit reduction, they would not focus their efforts on tax hikes. If they wanted to get a handle on our Nation's debt problems, they would work with Republicans to address the main drivers of our debt and deficits, our unsustainable entitlement programs. No one who has spent more than 5 minutes examining our Nation's finances seriously disputes that the main drivers of our current debt and deficits, and the source of the coming fiscal calamity, are Federal entitlement programs, especially our health care entitlements, Medicare and Medicaid. I have a chart from the Bipartisan Policy Center that tracks the trend lines on Federal spending. As the chart shows, in the coming years, health care entitlement spending will overwhelm our Federal fiscal picture and consume an outsized share of our economy. That is represented by the top blue line on the chart. All other categories of major Federal spending either increase at significantly lesser rates or decline and stabilize. As we can see, Social Security kind of levels off, discretionary spending--both defense and nondefense--we have seen that go down. This is other mandatory programs. As we can see, when it comes to deficit reduction, getting our debt under control, entitlement reform, that upper line, that is going off the charts. That is where the bodies are buried. Yet if you listen to my friends on the other side of the aisle, the problem is not our entitlement programs. The problem, they say, is that the American people simply are not being taxed enough. Of course, the actual numbers tell a different story. Over the last 40 years, Federal revenues as a percentage of the gross domestic product have averaged roughly 17.9 percent. While in recent years that number has decreased due to the struggling economy, tax revenues are at a pace to rise over the historic average and settle around 19 percent of GDP. Let me repeat that. Absent any changes in tax law, revenues are set to rise above historic levels relative to GDP, the gross domestic product. So despite my friends' claims to the contrary, the root of our current fiscal crisis is not the lack of revenues, it is unsustainable spending. More specifically, it is entitlement spending. That is just health care. That doesn't include some of the others. That is why all serious bipartisan deficit reduction discussions over the last few years have included structural reforms to our entitlement programs. Without significant changes, programs such as Medicaid and Medicare and Social Security will remain unsustainable. In order to strengthen and preserve these programs for future generations, we need to reform them. If we do not reform them, we face a fiscal disaster, and it would be a terrible disaster for all of our young people living today who are going to have to foot this bill. All of the major discussions seeking to reach a so-called ``grand bargain'' on deficit reduction have come down to a mix of different policies, but while they have all had different approaches, all of them have included structural entitlement reforms. When I talk about deficit reduction discussions, I am referring to the Bowles-Simpson plan, the Domenici-Rivlin plan, the negotiations led by Vice President Biden, the G8 Senate talks, the negotiations between Speaker Boehner and President Obama, and the so-called supercommittee. Each of those grand bargain discussions divided deficit reduction policy issues into four categories. These categories are: No. 1, discretionary spending; No. 2, nonhealth mandatory spending; No. 3, health care entitlement programs; and, No. 4, revenue. Those have been the agreed-upon areas of focus in our deficit reduction efforts. Yet, if you listen to what my friends on the other side of the aisle have been saying recently, you will see that their focus is entirely one- dimensional. We don't hear much talk anymore about addressing discretionary spending. We certainly don't hear much in terms of reining in entitlement spending. No, their only focus is on raising taxes. More precisely, their most recent argument has been that we have cut so much spending over the last few years that we are now at a point where tax hikes are the only viable deficit reduction option. Now, of course, with the exception of the sequester cuts that took effect this year, we have not really seen any real spending reductions as of yet, just promises, which future Congresses could easily undo. Even though only a small portion of the promised spending cuts has actually taken place, my friends on the other side of the aisle like to claim they have all already happened. Still, let's take a look at the record. Let's assume for a few minutes that all of the recently enacted deficit reduction is real and take a closer look at what has been done with respect to deficit reduction categories I referred to earlier. In the last 2 years two bills have been enacted with the purpose of major deficit reduction. The first was the Budget Control Act of 2011. The second was the fiscal cliff deal or the American Tax Relief Act of 2012. According to the Congressional Budget Office data and consultation with the Senate Budget Committee, here is what has been done so far: The category that has been tapped the most is discretionary spending, to the tune of $1.36 trillion of promised spending reductions over 10 years. Remember, that is over 10 years. Once again, these are almost entirely promised spending cuts that have yet to be realized. If history has told us anything, it is that future promises to reduce spending aren't likely to be kept. They are very unlikely to be kept. If you don't believe me, look at the efforts by my friends on the other side of the aisle to undo even the small amount of spending cuts that are actually in place this year. Indeed, Democrats in Congress have been actively looking for ways to eliminate the cuts for discretionary spending. If history is any indication, they may very well be successful in spite of the promises they made. Those who argue against these cuts do not want to merely provide flexibility over how the cuts will occur. They don't want any cuts to occur even though they are spending cuts relative to a bloated baseline that was supposed to be only temporarily elevated. Still, if we assume that against all odds these spending cuts remain in place, we will have reduced discretionary spending by $1.36 trillion relative to a baseline of bloated spending. The next highest deficit reduction category is revenues. Revenues have been increased by roughly $600 billion over 10 years--part of the fiscal cliff deal. This includes only the revenues generated by the fiscal cliff deal. It does not include the $1 trillion of new taxes enacted as part of ObamaCare. Unlike the promised discretionary spending cuts I cited earlier, this revenue number is very real and not just promises. While it may be a 10-year number that can theoretically be changed, history tells us that once tax hikes are in place, they always tend to stay there. So of the four deficit reduction categories, we have already taken significant steps with regard to promised discretionary spending reductions and actual revenue hikes. Where are we with the other categories? As I said, health care entitlement spending is the driver of future deficit and debt. No one who looks at this seriously disputes this. The trust funds in Social Security, which are to finance retirement and disability payments, are on clear paths to exhaustion, with the disability insurance trust fund scheduled to dry up in 2016. Yet, to date, very little of our deficit reduction attention has been focused on entitlement spending. So far we have done absolutely nothing to deal with unsustainable Social Security promises, and we have done nothing to address the insolvency of the retirement and disability trust funds. So far we have reduced health care entitlements by a mere $81 billion over the next 10 years. That amounts to roughly 4 percent of overall promised deficit reduction we have enacted. That amount is minuscule relative to the amount of scheduled spending entitlements over the next 10 years. Take a look at this chart. We can barely see the red line on the right side of the chart. That red line stands for $81 billion in entitlement cuts. If we look at the 10-year spending--as the chart behind me shows--over the next decade, we will spend roughly $22 trillion on the three major entitlement programs. That is trillion with a ``t.'' Despite cutting spending and reducing deficits over the last couple of years, we have only been able to reduce entitlement spending by a mere $81 billion. Look at that little red line compared to the 10-year spending on Medicare, Medicaid, and Social Security, which is unsustainable, and yet nothing is being done by the majority. By the way, all of those spending reductions have come in the form of cuts to health care providers. They are cutting out doctors, hospitals, and health care providers, as if that is going to keep them on the job. There is a high percentage of doctors who are now ready to retire or quit and find other ways of living. All of those spending reductions have come in the form of cuts to health care providers, not structural entitlement reforms, and they know that is not sustainable. Just that little bit is not sustainable. Once again, this approach is at odds with the grand-bargain efforts we have seen over the last few years. All of those efforts--every single one of them--put structural entitlement reform on the table. Yet, to date, my colleagues on the other side of the aisle have been unwilling to do the same. As I said, my friends like to brag about all of the promised deficit reduction they have enacted thus far--even the deficit reduction they are actively trying to repeal--but they refuse to even entertain a serious conversation about the main sources of our future debt and deficit. So where are we? The Senate Finance Committee is engaged in a bipartisan effort to reform our Nation's Tax Code and bring some sense of sanity to our Nation's tax system. Chairman Baucus and I have asked our colleagues to assist us in this effort by sharing their views on what elements of the current Tax Code should be preserved. I would like to thank my Republican colleagues on the Finance Committee for their input thus far. I have met with every one of them individually on this issue except for one, and he is meeting with my staff. I really appreciated their thoughtful comments and advice. While I remain hopeful that we will be able to move on tax reform this year, I am disheartened by comments I heard from my friends on the other side of the aisle. Indeed, many of my Democratic colleagues have stated that they are unwilling to engage in tax reform without assurances that it will have to include another massive tax increase. Once again, their message to the American people is that we have to keep the current system--which virtually everyone in the country agrees is a problem--unless the Republicans agree to higher taxes. They want to hold simplicity in the Tax Code hostage to demands for even more taxes. They want to hold efficiency in the economy--which stimulates growth and creates jobs--hostage to demands for the second tax hike of the year in order to pay for more of their spending and more of their expansion of government even further. They want to hold competitiveness of our businesses at home and around the globe hostage to demands that flowthrough businesses face yet another tax hike--even after having been hit already at the start of this year. My colleagues insist that their demands for higher taxes are all about deficit reduction. But let's face it. If deficit reduction was the real goal, entitlement reform would also be on the table. It would have to be on the table. After all, that is where the money is. That is where we have a chance to really reduce the deficit. That is where the future of our young people is going to be killed if we don't attack that problem now and do it in an intelligent way. According to my friends on the other side of the aisle, entitlement reform is not on the table. Despite the stated desire of President Obama and a number of congressional Democrats for a grand bargain on deficit reduction, when the rubber meets the road they simply are not willing to engage in a real discussion about entitlement reform. Sure, they will talk about cuts to providers and other cosmetic changes to these programs, and they will talk about modifying cost-of-living adjustments in Social Security if they get hundreds of billions of dollars of new tax revenue in return. But at the end of the day structural entitlement reforms simply are not part of their deficit reduction equation. Despite many claims to the contrary, Republicans are willing to engage, as they have in the past, in a bipartisan grand bargain for deficit reduction. Ask Senators Crapo, Coburn, and former Senator Gregg. They voted for Bowles-Simpson. Oddly enough, the remaining sitting Democratic Senator who voted for Bowles-Simpson has walked away from the entitlement reform concessions he made and instead has focused on calls for more revenues and as a result tax reform is being held hostage. Republicans and Democrats agree on the importance of tax reform. Our tax system is in dire need of reform. It is, quite frankly, one of the major obstacles standing between us and sustained economic growth. Most Democrats claim they agree with this sentiment, but their desire for more revenues apparently trumps this belief in the need for tax reform. Something has to change. As I have said before, we have been counseled by some of our former leaders not to mix tax reform and deficit reduction. I think that is pretty good advice, and these are two of the leaders who helped to put through the 1986 bill. They are both highly regarded by people on both sides of the aisle here in the Senate. Sadly, if Democrats in the Congress continue on their current course, neither tax reform nor deficit reduction will be possible. Indeed, if they continue to condition tax reform on additional tax hikes and if they continue to refuse to engage in a real discussion about entitlement reform, very little is going to be accomplished on either front. This spending game has got to be over. We have to start living within our means. We on this side of the aisle--and I in particular--have seen every tax increase amount to more spending, not deficit reduction, so it is a phony argument. And that is what is going to happen if we are so dumb as to increase taxes in accordance with the comments of our leadership on the other side of the aisle that were made just today. It is unbelievable that they get away with it. It is unbelievable that after all of these years we have to put up with that type of argument when we know they are not going to use that money for the appropriate reasons, and they never have. One Senator said to me the other day: I just live for the day where we reform the Tax Code and it is not changed 4 years later by our friends on the other side of the aisle for the worse. The 1986 bill was a good bill by any standard. It did a lot of good, but in about 4 years our friends started to change it. As a result, today we have the monstrosity we call the U.S. Tax Code that nobody really believes in and everybody knows is a detriment to our country. I am very concerned. I think we are going to have to have some folks stand up on the other side of the aisle. We are willing to stand with them, and we are willing to solve these problems in ways that will preserve the entitlement programs. They are not going to be preserved in their current form if we keep going the way we are. And tax increases aren't the answer either. We are spending so much, and it will not be long until we will be in a category with Greece if we don't watch it. We have to overcome this because no other entity in the world is going to bail us out; we have to bail ourselves out. We have to do it by doing what is right, now, and not by increasing taxes. It means resolving these problems on a structural reform basis. It will take good people on both sides of the aisle to do it. I call on my friends on the other side to get with it. Get real. Quit the tax charade. We know that is not going anywhere. We also know it is phony to begin with. Mr. President, I suggest the absence of a quorum.

Mr. HATCH

Mr. HATCH. Mr. President, I have just cast 13,000th vote here in the Senate. I have to admit that I never thought I would cast so many votes, but I'm grateful that I have had the opportunity to serve the good people of Utah long enough to reach this milestone. That said, I am not really one to dwell on the past. I have a lot more work here to do and a lot more votes to cast before I am done. But, I do want to thank both the distinguished majority and minority leaders for their kind words this evening and for being gracious enough to take the time to mark this occasion. I have known these good Senators a long time and I am proud to call both of them my friends. I am grateful for all of the friends and colleague I have made here in the Senate. They make it a great place to work. Amendment No. 1773

Mr. HATCH

Mr. HATCH. Mr. President, I ask unanimous consent to have printed in the Record the following seven letters expressing support for S. 1270, the Secure Annuities for Employee (SAFE) Retirement Act of 2013: Fidelity Investments, National Benefit Services, LLC, National Rural Electric Cooperative Association, Principal Life Insurance Company, Small Business Council of America, Transamerica Retirement Solutions, and the U.S. Chamber of Commerce.

Mr. HATCH. Mr. President, I ask unanimous consent to have printed in the Record two letters expressing appreciation for my having introduced S. 1270, the Secure Annuities for Employees--SAFE--Retirement Act of 2013. One is from the National Association of Insurance Commissioners and the other is from the National Organization of Life and Health Insurance Guaranty Associations.

Mr. HATCH

Mr. HATCH. Madam President, last month I spoke here about the confirmation process and how the majority was committing filibuster fraud. The leaders on the other side of the aisle, including the majority leader and the majority whip, voted for judicial filibusters more than 20 times by this point in the previous administration. They succeeded. There were five times as many judicial filibusters at that time during the Bush administration as there have been today. Looking at executive branch nominations, those same Democratic leaders voted to filibuster President Bush's nominees to be Assistant Secretary of Defense and EPA Administrator, and twice voted to filibuster his nominee to be U.N. Ambassador. They must have thought very differently then about whether the President deserves his team. Their actions then spoke more loudly than their words do today whether they think all nominees do deserve an up-or-down vote. The Senate recently confirmed the Directors of OMB and the CIA, the U.S. Trade Representative, the Secretaries of Energy, Interior, Treasury, State, Transportation, and Commerce this year by a collective vote of 816 to 61. That does not sound like a Senate that is in jeopardy or trouble. In fact, it does not sound like they even have a case to make to do what they have alleged they are going to do. The Congressional Research Service says the Senate is considering President Obama's executive nominees faster than during President Bush's second term, but none of that is good enough for this majority. They not only want more, but it appears they are willing to get it by any means necessary. According to media reports, the majority leader is being pushed by political interests to use a parliamentary gimmick to limit or abolish filibusters. In other words, his political base, especially Big Labor, wants him to put short-term partisan politics ahead of the integrity and tradition of the Senate itself. If simply saying that is not enough to show how dangerous it is, we are in more trouble than I thought. Thomas Jefferson called the Capitol the first temple to the sovereignty of the American people. The people established our Constitution with its separation of powers. They designed the legislative branch with an action-oriented House and a deliberation- oriented Senate. We call ours a system of government because it includes all of these parts designed to be different and yet to work together. Many people bemoan the division and conflict in Congress, the partisanship and on and on. Yes, there will be conflict over the important issues facing our country. Men and women of different perspectives, views and ideologies and serving different States serve in Congress. But I always thought we should be of one mind about the long-term integrity of the system of our institutions. For more than two centuries, the Senate has been designed to play its own particular part in the legislative process. Form follows function, they say. So our rules reflect our role. For more than two centuries the minority has had some basic rights in this body, including the right to debate. That right has always annoyed the majority and empowered the minority. I know that from experience, as I have been among the annoyed, just as today I am among the empowered. The majority knows it too. A decade ago when they were in the minority they began for a time using that right to debate to defeat judicial nominees who otherwise would have been confirmed. Now back in the majority, they want to ban the very tools they found so useful just a few years ago. Now that the majority leader is done using the opportunity for extended debate, he wants to make sure no one else can use it. Why? For one simple reason. Because they want their way every time. They think they are entitled to it, and if they cannot get it the old- fashioned way, by persuading their colleagues and the American people, then they will simply rig the rules. This short-term power grab, however, will cause long-term damage to the Senate and to the system of government of which it is such a vital part. Do not think just because they say they are limiting it to the executive branch appointments, excluding judges, do not think that is not going to lead to all kinds of other obnoxious approaches toward the Senate. A little dose of history provides a big dose of clarity for this debate. For more than a century the right to keep debate going belonged to each individual Senator. There was no rule at all for ending debate. A single Senator could prevent bills from passing by preventing debate from ending. We have had a rule for ending debate for nearly a century. Today it is easier to end a debate than at any time since the turn of the 19th century--not the 20th century, the 19th century. Not only that, but the majority is using that rule more effectively today to prevent filibusters than the rule has been used in the past. It is all there in the public record. When we vote to end debate, we prevent a filibuster. A higher percentage of votes to end debate has succeeded in recent Congresses than in the past. To top it off, just a few months ago, the Senate overwhelmingly adopted two new standing orders and two new standing rules giving the majority even more power considering nominations and legislation. But using the rules to their advantage is not enough for the majority. Gaining even more power through those new orders and rules is not enough. Now the majority threatens to use a parliamentary maneuver to weaken or abolish the right to debate itself. But as I said, the Senate rules reflect the Senate's role. Changing those rules, especially in the way the majority is talking about, means changing the Senate's role in our system of government. A few partisan victories simply cannot be enough to justify that. The minority leader has faithfully reminded us of the majority leader's past promises not to change the Senate's rules or procedures except through the process provided for in the rules. On January 27, 2011, the majority leader said: ``I will oppose any effort in this Congress or the next to change the Senate's rules other than through the regular order.'' My question is this: When the majority leader said: ``I will oppose,'' did he really mean ``I will lead''? The integrity of this institution and the system with which it is a part should matter more than the politics of the moment. If our commitment to this institution and to keeping our word no longer matter, we will be breaking the trust of the American people and failing in our duty to them. This must not happen. The Senate is a venerable institution. If the majority continues to go down the road they are going down, it is going to be much less venerable, and it is going to be a broken institution. Keep in mind, their decision, if they do choose to do this, will work against them someday. I have to say that I am very concerned because I believe that not only is it wrong, what they are going to do, but it is based upon false premises. When the majority leader says we have filibustered hundreds of times, that is totally inaccurate, especially when the leader calls up a bill and files cloture immediately just to make it look like we are filibustering. We are fast moving away from being the most deliberative body in the world to one that is just run by the majority, similar to the House of Representatives. I hope some of the wiser Senators on the Democratic side will prevail. Right now it does not look like they will. But I will tell you this, if we go down the road that the majority leader is talking about, this institution is going to be dramatically changed for the worse. I yield the floor.

Mr. HATCH

Mr. HATCH. Will the Senator yield?

Mr. HATCH. It makes a difference between issues where the Chair has been overruled rather than the nuclear option which changes the rule, which breaks the rule and changes it. That is a significant difference. That is what is being done here by a mere majority vote. The majority wants to change a very important rule. If we go down that road, I am going to tell you, the majority is going to be a very sorry majority in the future because they may be a minority. This body has always protected the rights of the minority, whether Democratic or Republican. It is what made it the greatest body in the world. We are about to destroy that for no good reason.

Mr. HATCH. I thank my colleague.

Mr. HATCH. Let me say that there are differences in how the rules are interpreted from time to time. From time to time the Chair has been overruled. I have been here when it has. I have only been here 37 years, and I have never seen anything like this in the whole 37 years. I have to say that this is a dangerous thing to do. I predict that if our colleagues on the other side--all of whom I care for--if they do this, they are going to rue the day they did it. It is that simple. They can say: Oh, it is just an eensy-teensy little change. It is not. It is a monumental change. There is going to be a tremendous price to pay for it, to the detriment of our country--it is just that simple-- and certainly to the detriment of the Senate, the greatest deliberative body in the world. It is hard for me to understand, over two NLRB partisans whom the President just recess-appointed, ignoring the rules of the Senate, and over Cordray, who probably under any other circumstances would get through easily, but there is very good reason why he should not go through this way. ObamaCare Mr. President, I rise to speak on what is known as ObamaCare and what the Obama administration did last week, hoping the American people were not paying attention, that impacts huge parts of the President's signature domestic policy achievement as our Nation was celebrating the Fourth of July. I am talking about the administration's decision to suspend for a year--conveniently past next year's election, which is very interesting to me--enforcing what is known as the employer mandate, the requirement that businesses offer insurance to their employees or face the penalty. And then a rule was issued by the Department of Health and Human Services last Friday stating that it would not verify people's incomes before giving out premium subsidies. My gosh, we have fraud all over the Federal Government, and they do something this stupid and undesirable? I am certainly glad employers got some relief. It is quite a message from the Obama administration, quite a message the Obama administration is sending the struggling families and individuals who will get no relief from this monstrosity of a law and its burdensome individual mandate tax. Republicans in Congress believe this is unfair as such. Senator Thune spearheaded a letter to President Obama, which I enthusiastically signed, urging him to permanently delay the whole entire law and treat individuals the way he is going to treat businesses. I am glad it has been put over for businesses, even though I question why it was put over for this next year. But why not do it for the individuals who are suffering from it? If it is good for the goose, it should be good for the gander. Shouldn't the Obama administration give the same relief to everyone? Furthermore, I would like to point out that we have always known this law was a budget buster. With the employer mandate delayed, I have joined with a group of Republican committee leaders in the House and Senate asking for the Congressional Budget Office to get us an updated cost estimate of the bill. I can't say what CBO will find, but I have a feeling that ObamaCare's price tag will continue to soar. It is already off the charts. Everybody knows it is an abominable bill, and that includes Democrats as well. What happened last week is just the latest in a series of confirmations that the President's health care is simply not ready for prime time. Unfortunately, it is the American people who pay the price for the largest expansion of government in generations. They will pay the price through higher taxes. They will pay the price through higher health care costs and insurance costs. They will pay the price with more and more government regulations and debt. They will pay the price when they are forced into what are called exchanges that are simply not ready and unlikely to be ready in the near future. This law, which was jammed through Congress on a purely partisan vote, is simply too big to work. The lesson is that asking government to do this much--when those of us who fought it tooth and nail said at the time it amounts to a government takeover of one-sixth of the American economy--will not succeed and cannot succeed. That is a lesson the Obama administration doesn't seem to get, doubling down on selling ObamaCare that is less popular today than when the President signed it into law. In fact, the White House is rolling out a massive multibillion-dollar PR campaign using taxpayer dollars to try to convince the American people that it is all the administration promised, shaking down the health care industry, professional sports teams, and movie stars in the process. Where is it going to end? What is the matter with this administration? Can't they just live with the facts and acknowledge that this is a dog? In fact, a cynic might argue that ObamaCare was designed to fail in order for the Federal Government to step in for a true, European-style single-payer system that many on the extreme left wanted all along. In other words, socialized medicine with the Federal Government controlling every aspect of our lives from a medicine and health-care standpoint. Now it seems as though every day we learn about more and more problems with ObamaCare. What do we know about it less than 4 months out from the open enrollment in the Federal and State health insurance exchanges which are supposed to occur on October 1? We have heard from countless experts who say the exchanges will be rife with issues once they are supposedly up and running. Indeed, those experts have predicted everything from ``glitches'' to ``consumer horror stories.'' Two GAO reports released in June confirm that the Obama administration is ill-equipped for the implementation of both the federally facilitated health insurance exchange and the so-called Small Business Health Option Program Exchange. And that is two reports from GAO saying the administration is ill-equipped to implement those federally facilitated health insurance exchanges. Citing the programs' delays and missed deadlines, the GAO concluded that there is potential for ``implementation challenges going forward.'' While we have been hearing about the problems with the exchanges for months now, we have not heard an explanation from the administration as to how--despite all of these reports--all of this is supposed to be up and running by October 1. I hope I am wrong, but I have a feeling come October millions of Americans are going to find themselves unable to navigate these waters. Sadly, the problems with the exchanges aren't the only difficulties with ObamaCare. Over the last several months we have heard numerous reports about the problems at the Internal Revenue Service. Let's face it. The IRS has never been beloved. Indeed, millions of Americans loathe and fear the IRS, and the recent scandal surrounding the targeting of conservative groups has not helped the agency's reputation either. At the heart of this recent scandal, there are claims by the IRS that they were simply unable to manage the increased workload that came with an influx of applications of groups applying for tax exempt status under 501(c)(4). According to the IRS officials, the increase in applications were so massive that examiners had to find new ways to categorize and screen the documents submitted by these groups. They say that was the main cause of the targeting scandal. Let's assume these arguments are true for a moment. When all is said and done, the number of applications of groups applying for 501(c)(4) status increased by 1,700 over a 4-year period. The IRS was apparently so flummoxed by an increase of less than 2,000 applications that it had to resort to inappropriate and potentially illegal measures. Give me a break. If this is true, the country is in real trouble. If the IRS cannot manage an increase of 1,700 applications of groups applying for tax exempt status, how will it handle its significant role in implementing ObamaCare or even handling the so-called premium supports? Under the so-called Affordable Care Act, premium subsidies--complex tax credits designed to defray the costs of purchasing health insurance based on household income--will go to an estimated 7 million tax filers according to the Joint Committee on Taxation. Within 2 years, that number will nearly double. And they can't take care of 1,700 applications for 501(c)(4) that are basically and relatively simple? In other words, the number of premium subsidy applications will jump from zero to 7 million in just 1 year. That is 7 million applications for people across a wide income spectrum claiming subsidies that did not exist before. Only God knows how many of those claims are going to be made fraudulently since they don't seem to be able to handle them. Basically, the Obama administration would have us believe that while a 4-year increase of 1,700 applications for tax exempt status was enough to give the agency fits, it is perfectly capable of handling 7 million new filings for a brandnew health care entitlement. On top of that, they want us to believe they can continue processing these subsidies as they double in number over the first 2 years. Needless to say, I am more than a bit skeptical. Of course, it is difficult to figure out exactly what the Obama administration expects the American people to believe when it comes to the IRS implementing ObamaCare. That is because despite all the upcoming deadlines, it is still not clear how the agency plans to fulfill this new responsibility; and despite numerous Congressional inquiries--as well as those from GAO and the Treasury Inspector General for Tax Administration, or TIGTA--no one really knows how the Affordable Care Act office in the IRS is going to work. One of the few things we know for sure is that the person who headed the IRS division that was responsible for targeting conservative organizations now heads the division responsible for implementing ObamaCare. How lucky can we be? That is hardly a comforting thought. Make no mistake, processing these complex premium subsidies will not be a walk in the park. These credits are both advanceable and refundable-- meaning they will be paid out first and verified later. Some have referred to this process as ``pay and chase.'' Many of my Democratic friends have referred to tax expenditures they don't like as ``spending through the Tax Code.'' That label is usually not accurate, but when we are talking about refundable credits, it is precisely on target. The problem is that over the years, the IRS has struggled to administer these types of tax credits. One needs to look no further than the earned income tax credit, or the EITC, to see the inherent problems with refundable credits. In a report issued this past April, TIGTA found that 21 to 25 percent of total EITC payments were improperly given out. If you assume that same percentage of improper payments will apply to the $1 trillion we will spend on ObamaCare premium subsidies--which is fair, due to the fact that the IRS has no way of verifying household income, and now the Department of Health and Human Services said it will not even try to verify a person's income--we could be looking at $210 billion to $250 billion in improper payments over the next 10 years. When is it going to end? When are the taxpayers going to get a break? This administration doesn't seem to know how to get us there. Some of that will be the result of fraud and some of it will simply be due to filing errors. Either way, if the IRS's track record with refundable credits is any indication, we are looking at hundreds of billions of dollars in improper payments when it comes to the ObamaCare premium subsidies. Now with the Obama administration abandoning any income verification, we are left with a policy that is little more than an honor system for hundreds of billions of dollars of premium subsidies. I will say it again: An honor system at a time when the Finance Committee and the administration are trying to crack down on improper government payments both within the tax system and our Federal health programs. If the definition of insanity is doing the same thing over and over expecting different results, then this is the definition of insanity on steroids. Couple that with the already soaring pricetag of the subsidies and we have a disaster on our hands. In his fiscal year 2012 budget, President Obama put the cost of the first year of premium subsidies at nearly $16 billion. In his most recent budget, that number soared to nearly $22 billion without any additional explanation. Why are these costs going up? There are a number of possible explanations. For example, there is the fact that due to the cost imposed by ObamaCare, more and more employers are opting to drop coverage, thereby pushing more and more people into the exchanges subsidized by these very same tax credits. At the same time, we know in order to avoid providing health care benefits, many employers are moving employees into part-time work, which, once again, pushes more people into receiving premium subsidies in order to purchase health insurance. Of course, there is the looming fact that despite the President's claims that his health care law would reduce the cost of health insurance, the cost of insurance premiums has continued to skyrocket. All of these are potential explanations of why the estimated cost of the premium subsidies has gone up in the President's budget. Yesterday a group of my Senate colleagues and I sent a letter to Secretary Lew and Secretary Sebelius asking for an in-depth analysis as to how much of a burden the new health insurance exchanges will be on the Federal budget given the skyrocketing pricetag of these premium subsidies. This is a reasonable question given the magnitude of America's debt. Between the dramatically increasing costs, the daunting tasks of administering these credits through the Tax Code, and now the administration is pulling back antifraud requirements, the chances for success are extraordinarily slim. As I said earlier, this law is too big, too cumbersome, too inclusive, and too costly to work. I have never supported it, and for good reasons. What is most disconcerting is that it is the millions of Americans who work hard every day to pay their bills, put food on their tables, and send their children to school who will bear this burden. For their sake, the best solution is a permanent delay of the whole law--and not just for the business sector but for everybody. That is what we need to do. We have to get rid of this pay-and-chase system that is going on right now where the government just pays in accordance under the honor code they described and later have to chase those who have defrauded the government. It is just unbelievable. Well, look at the premium subsidies. These are tax credits in ObamaCare designed to defray the cost of purchasing health insurance. These are going to go to some 7 million tax filers in households earning as much as $94,000 a year. How many people who are making much more than that will claim they are making less than $94,000 a year? Well, if we look at the past, there is going to be a lot of them. What is the IRS going to be able to do? They will not be able to approve it because they don't have the mechanisms to do it. My gosh. The administration said they are just going to rely on the filer to self-report their income to get access to the credits. Give us a break. My gosh. Like I said, the projected figure for subsidy expenditures has gone from $16 billion to $22 billion in just a couple of years. It is mind-boggling that they get away with it. It is mind-boggling that the American people have not risen up in rebellion against this stupid bill, and it is mind-boggling to me how my colleagues on the other side continue to defend this monstrosity. Every day we hear about more and more problems with it. Every day we hear about more and more costs. Every day we hear about more and more fraud. Every day we hear about people in the government who don't understand it and can't figure it out. When are we going to grow up and realize this is a dog and it is hurting America? I will be honest. I believe within a year or two the President is going to throw his hands in the air and say: This is not working. We have to go to a single-payer system--in other words, socialized medicine where the government will control all of our lives and will determine who gets health care and who doesn't. I have to say that is where we are headed. I hope I am proven wrong in the future, but I know I am going to be proven right. I can just see it. If it happens, it will have been done by our friends on the other side--100 percent--who voted for this dog. They don't seem to recognize it is eating America alive. I don't understand it. I love my colleagues on the other side. We have been friends for a long time. I have been here 37 years. There are only two Senators in that 37-year period whom I thought had no real reason to be here. I have loved everybody else, some more than others, of course. The fact is what is happening has happened because of the Democratic side of this floor, and we have to get some heroes over there to start standing and saying: We are not going down that road. We are not going to become socialism revisited, even though many of their supporters want that, as is evident to anybody who looks at it. When is our media going to take up and realize this is what is happening to our country and it is wrecking it. On top of that, we have this absolutely idiotic desire on the part of my friends on the other side to change the rules--to break the rule to change it. I yield the floor. I suggest the absence of a quorum.

Mr. HATCH

Mr. HATCH. Mr. President, I ask unanimous consent to have printed in the Record the following seven letters expressing support for S. 1270, the Secure Annuities for Employee, SAFE, Retirement Act of 2013: Committee of Annuity Insurers, Great American Life Insurance Company, Insured Retirement Institute, Investment Company Institute, Metropolitan Life Insurance Company, National Association for Fixed Annuities, and the National Association of Insurance and Financial Advisors.

Mr. HATCH

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

Mr. HATCH

Mr. HATCH. Mr. President, 23 years ago I stood here on the Senate floor as we voted 91 to 6 for the conference report on the Americans With Disabilities Act. I predicted this landmark piece of legislation would literally unlock the resources of individuals with disabilities that had previously been wasted. I worked long and hard to get it enacted into law. It is one of the bills of which I feel most appreciative. In 2008, I again stood here on the Senate floor as we passed the ADA Amendments Act by unanimous consent. I said it was part of our ongoing effort to expand opportunities for individuals with disabilities and to help them participate in the American dream. I remain committed to that effort. Both of these legislative achievements were the result of negotiation and compromise, and they directly addressed and provided concrete solutions to problems faced by American citizens. We should address such public policy issues through the legislative process so elected representatives make the decisions that affect Americans and are consequently accountable to them. There is underway an effort to promote the rights and opportunities of persons with disabilities through a treaty rather than through legislation. Advocates of the U.N. Convention on the Rights of Persons With Disabilities--or CRPD--appear to believe that statutes and treaties are simply alternative means to accomplish the same end. Although I have labored with these advocates on disability legislation, I must respectfully but firmly disagree. My record on disability legislation speaks for itself, but I cannot support the CRPD because the cost to American sovereignty and self- government clearly outweighs any concrete benefit to Americans. When Alexander Hamilton explained the American system of representative self-government, he famously said that in America, ``The people govern; here, they act by their immediate representatives.'' Those words today are inscribed above an entrance to the House of Representatives in the Capitol, a building that Thomas Jefferson described as ``dedicated to the sovereignty of the people.'' That sovereignty certainly includes the authority to elect representatives and the authority of those representatives to enact laws. But it is much more than that. The American people also have authority to define our culture, express our values, set our priorities, and balance the many competing interests that exist in a free society. To put it simply, the American people must have the last word. The CRPD would undermine that sovereignty, compromise self- government, and give the last word to the United Nations. Let me explain how. The CRPD is not a treaty with other nations but a treaty with the United Nations itself. Ratifying it would create a wide range of obligations for the United States and authorize the United Nations to determine whether we are meeting those obligations. The U.N. Web site says the CRPD legally binds any nation ratifying it to adhere to its principles. The treaty applies those principles in more than two dozen areas of national life including education, health, employment, accessibility, and independent living, as well as participation in political, public, and cultural life. Article 8 even requires ratifying nations to ``raise awareness throughout society, including at the family level, regarding persons with disabilities.'' The treaty also spells out what adherence to its principles in these many areas will require. Ratifying nations must enact, modify, or abolish not only laws and regulations at all levels of government-- Federal, state, and local--but also social customs and cultural practices. Ratifying nations must refrain from engaging in any acts or practices that are inconsistent with the treaty as well as ensure that all public authorities and institutions act in conformity with it. The heart of the CRPD is a committee of 18 experts elected by the nations ratifying the treaty that has authority to determine if those nations are in compliance. Each nation must submit to this committee periodic comprehensive reports on measures taken to meet the obligations imposed by the treaty. The U.N. committee dictates the content of these reports, evaluates whether a nation is in compliance, and makes whatever recommendations it so chooses. I commend to Senators an article coauthored by our former colleague from Arizona Jon Kyl and published in the current issue of the journal Foreign Affairs. He explains well how international law can undermine democratic sovereignty. Of this particular treaty, the CRPD, he writes, If the treaty has a practical effect, it would be due in large part to interpretations made by foreign government officials and judges and by nongovernmental organizations, none answerable to American voters. Under the U.S. Constitution, ratified treaties are the supreme law of the land. Since the United States has long had the most progressive disability laws and policies in the world, we likely are already doing much that the CRPD requires. But that is not the point, and instead highlights the real problem. Ratifying the CRPD would endorse an official ongoing role for the United Nations in evaluating virtually every aspect of American life. Ratifying the CRPD would say the United Nations, not the American people, has the final say about whether the United States is meeting its obligations in these many areas. It would impose this cost to American sovereignty and self-government with no real concrete benefit to Americans. Ratifying the CRPD will not establish a single right for a single American. It will not provide for Americans with disabilities anything that American law has not or could not provide. It would not even help Americans with disabilities who travel overseas because their treatment depends on the laws and policies of other countries, not ours. The CRPD's combination of obligations and U.N. oversight can help move nations that have not done so on their own toward protecting the rights and promoting the opportunities of persons with disabilities. That, I take it, is a strategic purpose of the treaty. But the United States is not only far down that road, we literally blazed the trail, and I was a significant part of blazing that trail. Treaty advocates argue that the CRPD's impact on American sovereignty and self-government can be minimized by the many caveats that would accompany ratification. These are commonly referred to as reservations, understandings, and declarations. The legal status of these caveats, however, is unclear. The CRPD itself states that ``[r]eservations incompatible with the object and purpose of the [CRPD] shall not be permitted,'' a judgment reserved to the U.N. committee. No less an authority than Harold Koh, former State Department legal adviser and now Sterling Professor of International Law at Yale, has questioned whether such declarations have ``either domestic or international legal effect.'' Treaty advocates also emphasize that the U.N. committee will have no formal authority to interfere domestically in the United States. But as I explained, American sovereignty and self-government are not so narrow that they could be undermined only if we literally let the United Nations run our country. The United Nations and its components hardly need a treaty to opine on aspects of American life and public policy; they already do so--and we have seen it many times. It is, however, something else entirely for the United States formally to endorse the right of the United Nations to do so and subject ourselves to their evaluation. Treaty advocates say that ratifying the CRPD would give the United States a ``seat at the table'' to promote the rights and opportunities of persons with disabilities around the world. Ratifying the CRPD will neither create, nor is necessary to maintain, America's global leadership on behalf of persons with disabilities. We had the most progressive laws in the world decades before the CRPD existed. Individual nations, as well as the European Union, are today modeling their laws after ours even without ratifying the treaty. The only table in this arena at which the United States doesn't already have a seat is the U.N. disability committee. But do the math. The committee has 18 members who are elected by the CRPD's state parties, currently 132 nations. The chances of the United States having a seat at that table at any particular time are remote and will get even smaller as even more nations ratify the treaty. Besides, as I noted, advocates acknowledge that the U.N. committee has no formal authority anyway. Finally, treaty advocates say the ratification by the United States will encourage other nations to do so. But at least 19 nations on four continents--from Norway and the Russian Federation to Barbados, Israel, and Liberia--have ratified the CRPD since it was received here in the Senate a little more than a year ago. I have not addressed substantive issues with the CRPD as currently drafted, but I will mention one. For more than four decades, American disability law and policy have used an objective, functional definition of disability. A disability is an impairment that substantially limits a major life activity. The CRPD, however, states that ``disability is an evolving concept'' involving barriers that hinder ``full and effective participation on an equal basis with others.'' The threat to American sovereignty and self-government I have described would exist even if the CRPD utilized a similar concept of disability. But at least by the CRPD's terms, it appears the U.N. committee will use an evolving concept of disability to evaluate how the United States has implemented its objective concept of disability. There exists virtually nothing that the United States could do after ratification that it could not or does not already do today. The truth is that every argument for ratifying the CRPD applies properly to other countries, not to the United States. The only real benefit of ratification that I can see would be to endorse the principles and policy statements in the treaty. The United States, however, either already does so by law or can do so in ways that do not undermine our sovereignty and self-government. In the end, the most potent kind of leadership is the kind that America has exercised for decades--decades already, taking real action to protect the rights and promote the opportunities of persons with disabilities. I remain as committed as ever to that ongoing responsibility. I suggest the absence of a quorum.

Mr. HATCH

Mr. HATCH. I thank the Chair. (The remarks of Senator Hatch pertaining to the introduction of S. 1270 are printed in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. HATCH

Mr. HATCH. Mr. President, I rise to speak about the pension reform legislation I am introducing today. I am taking this step for a simple reason: America cannot continue sleepwalking into the financial disaster that awaits us if we do not get the public pension debt crisis under control. The bill I introduce today is called The Secure Annuities for Employee Retirement Act of 2013--the SAFE Retirement Act, for short. In addition to public pension underfunding, the SAFE Retirement Act addresses two other critically important aspects of retirement policy: 401(k) plan coverage and access to professional investment advice for workers and retirees. I will briefly address each part in turn. I have been working on the public pension underfunding problem, which I call the pension debt crisis, for some time. Two years ago, I stood before this Senate and described the financial challenge public pension plans pose to Americans. I described how the gap between the pensions that have been promised to workers by State and local governments and the money set aside was as much as $4.4 trillion short by some estimates, more than the total amount of municipal bond debt nationwide. I explained that the problem of public pension underfunding existed before the 2008 recession and any attempt to lay blame for the problem at the feet of Wall Street or big business or some other group was just blame shifting. I observed how the business world long ago recognized that traditional pension plans--defined benefit plans--had become unsustainable for most private companies and that most had moved toward 401(k)-style plans--or defined contribution plans--because costs are lower and more predictable and they fit well within an increasingly mobile and dynamic workforce. As usual, governments have been slow to innovate, slow to adapt, and when they have acted, their actions have been too limited to solve the problem. I said at the time I had not settled on the best solution, but that I was working hard and talking to the experts about the best way to proceed. That is what we did. Last year, after extensive study, I delivered a report about the public pension debt problem titled ``State and Local Government Defined Benefit Plans: The Pension Debt Crisis that Threatens America.'' The study showed that public pension underfunding is a longstanding problem and that thecurrent pension debt crisis goes back more than a decade, if not further. The report explained why public pension debt is a Federal concern, reviewed previous Federal attempts at legislation and more recent State legislative measures focused almost exclusively on new employees and the attempt by the Government Accounting Standards Board to restore a level of discipline to public pension accounting. At the end of the report, I laid out four essential goals for public pension reform. First, public pension plans must be affordable for public employers and taxpayers. Second, plans must be structured so taxpayers in the future have no liability for past years of employee service. Third, public plans should provide retirement income security for employees. Finally, fourth, a Federal bailout of the States must he avoided at all costs. As you will see, I listened to people on all sides of the public pension debate, including employee groups who want public plans to provide lifetime income. I could have merely recommended that State and local governments move to a 401(k)-style plan, but I settled instead on a policy of trying to achieve retirement income security as well. Despite numerous legislative initiatives enacted at the State and local level, the public pension debt crisis has gotten worse, not better. In my report, I warned that examples such as Prichard, AL, Vallejo, CA, and Central Falls, RI, were only the beginning. Sadly, I was right. Since that time, we have witnessed the pension debt crisis descend on much larger cities such as San Jose, CA, Stockton, CA, San Bernardino, CA, and Detroit, MI. Does anyone doubt that a State could be next? How many times does the credit rating of Illinois have to be downgraded before we act? How long can Rhode Island hold out when it is expected to save its struggling cities while it struggles with its own State pension crisis? The problem is getting more serious every day, and the four goals I outlined in my report cannot be reached merely by fine-tuning the existing pension structures available to public employers. A new public pension design is needed, one that provides cost certainty for State and local taxpayers, retirement income security for State and local employees, and does not include an explicit or implicit government guarantee. I am pleased to say I believe I have designed such a plan. Title I of the SAFE Retirement Act creates a new pension plan called an annuity accumulation retirement plan. I call it the SAFE Retirement Plan. The concept of the SAFE Retirement Plan is simple: take advantage of the lifetime income that fixed annuities can provide while mitigating the volatile effect of interest rates on pension levels by purchasing an annuity contract for each worker every year during their career so a worker builds a solid pension year by year during their entire working life. With a SAFE Retirement Plan, employees receive a secure pension at retirement for life that is 100-percent vested, fully portable, and cannot be underfunded. Employers and taxpayers receive stable, predictable, and affordable pension costs. Underfunding is not possible. The life insurance industry pays the pensions and bears all of the investment risk. Unlike current public pension plans, the SAFE Retirement Plan will be protected by a robust and multi-faceted State insurance regulatory system built to ensure financial strength and solvency and backed by a State law-based consumer safety net. Rather than repairing their pension plans, States that adopt the SAFE Retirement Plan will be upgrading their pension plans. Remember, there is no Pension Benefit Guaranty Corporation backing State and local pension plans, and there never will be. Corporations that sponsor pension plans pay premiums to the PBGC, and their workers and retirees receive a level of insurance in the event the plan does not have assets sufficient to pay promised benefits. State and local workers enjoy no such protection, so another solution is needed. The SAFE Retirement Plan, in my opinion, is the answer. It is supported by a well-regulated, highly solvent State insurance system and has a built-in financial backstop that does not rely on State or Federal taxes. Honestly, regardless of which side of the debate Senators have been on to date, they must acknowledge that from a solvency perspective, this is a big improvement over the current public pension system. I know some will argue my bill will give too much new business to the life insurance industry. That is not how I look at it. The way I see it, my bill takes advantage of the life insurance industry to help Americans solve a serious pension problem. After all, the life insurance industry is the only industry in the world designed from the ground up to manage longevity risk. Annuity contracts purchased through a SAFE Retirement Plan will be competitively bid upon, on a group contract basis, so the workers receive the highest possible pension in retirement. Government finance officers will be involved in the bidding process to ensure best practices, and life insurance companies will be supervised by their respective State insurance departments. The life insurance industry is reliably solvent because State insurance regulations are strict, with stringent reserve requirements and conservative investment standards. In fact, State-licensed life insurance carriers survived the 2008 stock market meltdown in far better condition than any other part of the financial sector. The status quo is no longer acceptable. In fact, maintaining the status quo comes with a very high cost. In 2011, S&P downgraded the United States in part because of the enormous debt represented by underfunded State and local pension plans. The credit rating agencies have downgraded Illinois multiple times, and Moody's has begun scrutinizing State and local pension obligations more closely. What will happen when the credit rating agencies see that most State and local governments have no serious plan to address the crisis? A pension is insurance against outliving the money you have available to pay your monthly bills. It cannot be denied that people are living longer. As wonderful as that is, it also means we need to find new ways to stretch our monthly pension dollars over longer lifetimes. The SAFE Retirement Plan can meet the test. In addition to public pension reform, title II of the legislation I introduce today has several important private pension reforms. The centerpiece is the Starter 401(k), a new type of 401(k) plan that allows employees to save for retirement while placing minimal burdens on employers. Starter 401(k) plans allow employees to save up to $8,000 each year but do not require employer contributions. This plan will be especially useful to small companies that do not have a retirement plan and startup companies that must devote all of their resources to building their business in the early years. The Finance Committee has received evidence in hearings that access to a retirement plan at work is the best way to ensure that individuals save for retirement. The policy goal of Congress, therefore, should be to encourage employers to establish and maintain a workplace retirement plan. The corollary is that Congress should not adopt policies that discourage employers from maintaining a retirement plan. The Starter 401(k) is a winner on all counts. It is targeted at businesses that do not already have a plan for their employees, it allows employers to help employees save their own money in amounts greater than they could on their own, and it has none of the expensive and burdensome testing and contribution obligations for employers associated with other retirement plans. As one of the many supporters of this bill told me: `` [T]he Starter 401(k) is an idea whose time has come.'' In addition to the Starter 401(k), the private pension reforms I introduce today will help employers by simplifying reporting rules, easing discrimination testing safe harbor rules, allowing modernized electronic disclosure options, and encouraging the provision of lifetime income options for employees. These are commonsense and long- overdue reforms to our Nation' s retirement savings laws, especially with regard to small-and mid-sized employers. Last but not least, title III of the legislation I introduce today will ensure that retirees continue to have affordable access to professional investment advice. The Acting Secretary of Labor is set to rewrite a 1975 regulation and dramatically expand the ERISA fiduciary duty and prohibited transaction rules applicable to 401(k) plans. The Acting Secretary also intends to apply the new and restrictive rules to IRAs, which will cause investment advisers to stop providing advice to many IRA owners. I have written to the Secretary of Labor in the past about the issue, but my concerns have not been addressed. In fact, there have been a number of letters from Members in both Houses of Congress and on both sides of the aisle imploring the Department of Labor to reconsider the issuance of the expansive and burdensome regulations. Forty Members of Congress have written the Labor Secretary on this issue just since February, to no avail. In light of the DOL's--the Department of Labor's--intransigence, my bill includes a legislative solution to the problem. The IRA prohibited transaction rules are codified solely in the Internal Revenue Code and address transactions that involve self- dealing and conflicts of interest. Prior to the issuance of a 1978 Executive Order, Treasury had jurisdiction over the IRA prohibited transaction rules governing investment advice. The 1978 order transferred Treasury' s jurisdiction to the DOL. The SAFE Retirement Act restores jurisdiction for IRA prohibited transaction rules to the Treasury Department. In addition, Treasury will be required to consult with the Securities and Exchange Commission when prescribing rules relating to the professional standard of care owed by brokers and investment advisers to IRA owners. The 1978 Executive Order also transferred to the DOL some of the Treasury Department's joint jurisdiction over the prohibited transaction rules applicable to retirement plans. The bill I introduce today restores joint jurisdiction to Treasury and the DOL. Joint jurisdiction makes sense in light of the DOL proposal to expand the 1975 regulation because Treasury must enforce prohibited transaction violations through the assessment of excise taxes. Treasury should have a role to play in any expansion of the rules because expanded rules will mean more excise tax cases for the IRS to process. If the Acting Secretary of Labor believes that the 1975 fiduciary regulation that has governed retirement investment advice for nearly four decades should be revisited, then the 1978 decision to grant the Secretary of Labor additional ERISA regulatory authority also should be revisited. After all, we do not know that the DOL would have been granted additional authority in 1978 if the sensible 1975 regulations had not been issued. Make no mistake, the position I take today regarding IRA investment advice is not a partisan position. In the last Congress, 124 Members from both sides of the aisle and from both Chambers--including 75 Democrats, I might add--wrote to the Labor Secretary asking her not to take this course of action. The Secretary finally withdrew the proposal last year. But now that the Acting Secretary is again threatening to introduce this ill-conceived rule, dozens of Members of Congress have again written the Acting Secretary asking that IRAs be protected. I ask unanimous consent that I be able to complete my remarks.

Mr. HATCH. I would like to submit for the Record two letters written in March and June of this year by a total of 40 Members of the House Democrat caucus once again asking the DOL to avoid the mistake it is about to make.

Mr. HATCH. These letters are proof positive that opposition to the Labor Department's fiduciary regulation continues to be both bipartisan and bicameral. As I close, I also wish to have printed in the Record copies of the many letters I have received in support of the SAFE Retirement Act of 2013.

Mr. HATCH. These letters come from businesses and organizations representing employers, life insurance companies, State insurance commissioners, State guarantee associations, and tax policy groups. These letters demonstrate that the SAFE Retirement Act is good policy and will make good law. America's retirement system deserves no less.

Mr. HATCH

Mr. HATCH. Mr. President, I rise to speak about the pension reform legislation I am introducing today. I am taking this step for a simple reason: America cannot continue sleepwalking into the financial disaster that awaits us if we do not get the public pension debt crisis under control. The bill I introduce today is called The Secure Annuities for Employee Retirement Act of 2013--the SAFE Retirement Act, for short. In addition to public pension underfunding, the SAFE Retirement Act addresses two other critically important aspects of retirement policy: 401(k) plan coverage and access to professional investment advice for workers and retirees. I will briefly address each part in turn. I have been working on the public pension underfunding problem, which I call the pension debt crisis, for some time. Two years ago, I stood before this Senate and described the financial challenge public pension plans pose to Americans. I described how the gap between the pensions that have been promised to workers by State and local governments and the money set aside was as much as $4.4 trillion short by some estimates, more than the total amount of municipal bond debt nationwide. I explained that the problem of public pension underfunding existed before the 2008 recession and any attempt to lay blame for the problem at the feet of Wall Street or big business or some other group was just blame shifting. I observed how the business world long ago recognized that traditional pension plans--defined benefit plans--had become unsustainable for most private companies and that most had moved toward 401(k)-style plans--or defined contribution plans--because costs are lower and more predictable and they fit well within an increasingly mobile and dynamic workforce. As usual, governments have been slow to innovate, slow to adapt, and when they have acted, their actions have been too limited to solve the problem. I said at the time I had not settled on the best solution, but that I was working hard and talking to the experts about the best way to proceed. That is what we did. Last year, after extensive study, I delivered a report about the public pension debt problem titled ``State and Local Government Defined Benefit Plans: The Pension Debt Crisis that Threatens America.'' The study showed that public pension underfunding is a longstanding problem and that thecurrent pension debt crisis goes back more than a decade, if not further. The report explained why public pension debt is a Federal concern, reviewed previous Federal attempts at legislation and more recent State legislative measures focused almost exclusively on new employees and the attempt by the Government Accounting Standards Board to restore a level of discipline to public pension accounting. At the end of the report, I laid out four essential goals for public pension reform. First, public pension plans must be affordable for public employers and taxpayers. Second, plans must be structured so taxpayers in the future have no liability for past years of employee service. Third, public plans should provide retirement income security for employees. Finally, fourth, a Federal bailout of the States must he avoided at all costs. As you will see, I listened to people on all sides of the public pension debate, including employee groups who want public plans to provide lifetime income. I could have merely recommended that State and local governments move to a 401(k)-style plan, but I settled instead on a policy of trying to achieve retirement income security as well. Despite numerous legislative initiatives enacted at the State and local level, the public pension debt crisis has gotten worse, not better. In my report, I warned that examples such as Prichard, AL, Vallejo, CA, and Central Falls, RI, were only the beginning. Sadly, I was right. Since that time, we have witnessed the pension debt crisis descend on much larger cities such as San Jose, CA, Stockton, CA, San Bernardino, CA, and Detroit, MI. Does anyone doubt that a State could be next? How many times does the credit rating of Illinois have to be downgraded before we act? How long can Rhode Island hold out when it is expected to save its struggling cities while it struggles with its own State pension crisis? The problem is getting more serious every day, and the four goals I outlined in my report cannot be reached merely by fine-tuning the existing pension structures available to public employers. A new public pension design is needed, one that provides cost certainty for State and local taxpayers, retirement income security for State and local employees, and does not include an explicit or implicit government guarantee. I am pleased to say I believe I have designed such a plan. Title I of the SAFE Retirement Act creates a new pension plan called an annuity accumulation retirement plan. I call it the SAFE Retirement Plan. The concept of the SAFE Retirement Plan is simple: take advantage of the lifetime income that fixed annuities can provide while mitigating the volatile effect of interest rates on pension levels by purchasing an annuity contract for each worker every year during their career so a worker builds a solid pension year by year during their entire working life. With a SAFE Retirement Plan, employees receive a secure pension at retirement for life that is 100-percent vested, fully portable, and cannot be underfunded. Employers and taxpayers receive stable, predictable, and affordable pension costs. Underfunding is not possible. The life insurance industry pays the pensions and bears all of the investment risk. Unlike current public pension plans, the SAFE Retirement Plan will be protected by a robust and multi-faceted State insurance regulatory system built to ensure financial strength and solvency and backed by a State law-based consumer safety net. Rather than repairing their pension plans, States that adopt the SAFE Retirement Plan will be upgrading their pension plans. Remember, there is no Pension Benefit Guaranty Corporation backing State and local pension plans, and there never will be. Corporations that sponsor pension plans pay premiums to the PBGC, and their workers and retirees receive a level of insurance in the event the plan does not have assets sufficient to pay promised benefits. State and local workers enjoy no such protection, so another solution is needed. The SAFE Retirement Plan, in my opinion, is the answer. It is supported by a well-regulated, highly solvent State insurance system and has a built-in financial backstop that does not rely on State or Federal taxes. Honestly, regardless of which side of the debate Senators have been on to date, they must acknowledge that from a solvency perspective, this is a big improvement over the current public pension system. I know some will argue my bill will give too much new business to the life insurance industry. That is not how I look at it. The way I see it, my bill takes advantage of the life insurance industry to help Americans solve a serious pension problem. After all, the life insurance industry is the only industry in the world designed from the ground up to manage longevity risk. Annuity contracts purchased through a SAFE Retirement Plan will be competitively bid upon, on a group contract basis, so the workers receive the highest possible pension in retirement. Government finance officers will be involved in the bidding process to ensure best practices, and life insurance companies will be supervised by their respective State insurance departments. The life insurance industry is reliably solvent because State insurance regulations are strict, with stringent reserve requirements and conservative investment standards. In fact, State-licensed life insurance carriers survived the 2008 stock market meltdown in far better condition than any other part of the financial sector. The status quo is no longer acceptable. In fact, maintaining the status quo comes with a very high cost. In 2011, S&P downgraded the United States in part because of the enormous debt represented by underfunded State and local pension plans. The credit rating agencies have downgraded Illinois multiple times, and Moody's has begun scrutinizing State and local pension obligations more closely. What will happen when the credit rating agencies see that most State and local governments have no serious plan to address the crisis? A pension is insurance against outliving the money you have available to pay your monthly bills. It cannot be denied that people are living longer. As wonderful as that is, it also means we need to find new ways to stretch our monthly pension dollars over longer lifetimes. The SAFE Retirement Plan can meet the test. In addition to public pension reform, title II of the legislation I introduce today has several important private pension reforms. The centerpiece is the Starter 401(k), a new type of 401(k) plan that allows employees to save for retirement while placing minimal burdens on employers. Starter 401(k) plans allow employees to save up to $8,000 each year but do not require employer contributions. This plan will be especially useful to small companies that do not have a retirement plan and startup companies that must devote all of their resources to building their business in the early years. The Finance Committee has received evidence in hearings that access to a retirement plan at work is the best way to ensure that individuals save for retirement. The policy goal of Congress, therefore, should be to encourage employers to establish and maintain a workplace retirement plan. The corollary is that Congress should not adopt policies that discourage employers from maintaining a retirement plan. The Starter 401(k) is a winner on all counts. It is targeted at businesses that do not already have a plan for their employees, it allows employers to help employees save their own money in amounts greater than they could on their own, and it has none of the expensive and burdensome testing and contribution obligations for employers associated with other retirement plans. As one of the many supporters of this bill told me: `` [T]he Starter 401(k) is an idea whose time has come.'' In addition to the Starter 401(k), the private pension reforms I introduce today will help employers by simplifying reporting rules, easing discrimination testing safe harbor rules, allowing modernized electronic disclosure options, and encouraging the provision of lifetime income options for employees. These are commonsense and long- overdue reforms to our Nation' s retirement savings laws, especially with regard to small-and mid-sized employers. Last but not least, title III of the legislation I introduce today will ensure that retirees continue to have affordable access to professional investment advice. The Acting Secretary of Labor is set to rewrite a 1975 regulation and dramatically expand the ERISA fiduciary duty and prohibited transaction rules applicable to 401(k) plans. The Acting Secretary also intends to apply the new and restrictive rules to IRAs, which will cause investment advisers to stop providing advice to many IRA owners. I have written to the Secretary of Labor in the past about the issue, but my concerns have not been addressed. In fact, there have been a number of letters from Members in both Houses of Congress and on both sides of the aisle imploring the Department of Labor to reconsider the issuance of the expansive and burdensome regulations. Forty Members of Congress have written the Labor Secretary on this issue just since February, to no avail. In light of the DOL's--the Department of Labor's--intransigence, my bill includes a legislative solution to the problem. The IRA prohibited transaction rules are codified solely in the Internal Revenue Code and address transactions that involve self- dealing and conflicts of interest. Prior to the issuance of a 1978 Executive Order, Treasury had jurisdiction over the IRA prohibited transaction rules governing investment advice. The 1978 order transferred Treasury' s jurisdiction to the DOL. The SAFE Retirement Act restores jurisdiction for IRA prohibited transaction rules to the Treasury Department. In addition, Treasury will be required to consult with the Securities and Exchange Commission when prescribing rules relating to the professional standard of care owed by brokers and investment advisers to IRA owners. The 1978 Executive Order also transferred to the DOL some of the Treasury Department's joint jurisdiction over the prohibited transaction rules applicable to retirement plans. The bill I introduce today restores joint jurisdiction to Treasury and the DOL. Joint jurisdiction makes sense in light of the DOL proposal to expand the 1975 regulation because Treasury must enforce prohibited transaction violations through the assessment of excise taxes. Treasury should have a role to play in any expansion of the rules because expanded rules will mean more excise tax cases for the IRS to process. If the Acting Secretary of Labor believes that the 1975 fiduciary regulation that has governed retirement investment advice for nearly four decades should be revisited, then the 1978 decision to grant the Secretary of Labor additional ERISA regulatory authority also should be revisited. After all, we do not know that the DOL would have been granted additional authority in 1978 if the sensible 1975 regulations had not been issued. Make no mistake, the position I take today regarding IRA investment advice is not a partisan position. In the last Congress, 124 Members from both sides of the aisle and from both Chambers--including 75 Democrats, I might add--wrote to the Labor Secretary asking her not to take this course of action. The Secretary finally withdrew the proposal last year. But now that the Acting Secretary is again threatening to introduce this ill-conceived rule, dozens of Members of Congress have again written the Acting Secretary asking that IRAs be protected. I ask unanimous consent that I be able to complete my remarks.

Mr. HATCH. I would like to submit for the Record two letters written in March and June of this year by a total of 40 Members of the House Democrat caucus once again asking the DOL to avoid the mistake it is about to make.

Mr. HATCH. These letters are proof positive that opposition to the Labor Department's fiduciary regulation continues to be both bipartisan and bicameral. As I close, I also wish to have printed in the Record copies of the many letters I have received in support of the SAFE Retirement Act of 2013.

Mr. HATCH. These letters come from businesses and organizations representing employers, life insurance companies, State insurance commissioners, State guarantee associations, and tax policy groups. These letters demonstrate that the SAFE Retirement Act is good policy and will make good law. America's retirement system deserves no less.

Mr. HATCH

Mr. HATCH. Madam President, last July, in an unprecedented over-reach of executive authority, the Obama administration violated congressional intent and breached over a decade of precedence by granting themselves the authority to waive critical Federal work requirements. As ranking member of the Senate Finance Committee, which has jurisdiction over the temporary assistance for needy families, or TANF, I strongly opposed this effort of the Executive branch to bypass the legislative branch of government. It is the sole responsibility of the Senate Finance Committee to develop, debate, and enact changes to the TANF programs. The TANF programs have not been fully reauthorized for over 10 years and have been funded by a series of short term extensions since 2010. During this time, poverty and, most distressingly, child poverty have risen. It is imperative to families struggling in this dire economy that the Senate Finance Committee act in a bipartisan manner to reform and improve the TANF programs. In December of last year, colleagues may remember that I sent a letter to President Obama and then subsequently went to the Senate floor and formally asked the President to instruct the Secretary of Health and Human Services to withdraw their unconstitutional welfare waiver rule and submit a comprehensive welfare reform plan to the Congress. In my letter and my remarks, I made it clear that if the President withdrew this waiver scheme and sent up a proposal to Congress, that I would commit to working with him and other Democrats to enact comprehensive welfare reform. However, in the months since I sent my letter, I have not gotten a response from the President. The welfare waiver rule remains in effect. The Secretary of Health and Human Services has failed to propose a comprehensive welfare reauthorization. According to HHS, no State has applied for a welfare work waiver. In their Statement of Administration Policy, to H.R. 890, the ``Preserving Work Requirements for Welfare Programs Act of 2013,'' the Administration writes that the reason no state has applied for a welfare work waiver is due to ``inaccurate claims about what the policy involves.'' However, the Obama administration has refused to elaborate further on these waiver policies, and Democrats in the Congress have steadfastly resisted any effort to rescind the administration's welfare waiver scheme. The insistence on the part of the administration that the welfare waiver rule remain intact demonstrates to me that the administration wants the option to waive Federal welfare requirements at some later date. Therefore, it behooves those of us who support robust welfare work requirement to oppose the administration's welfare work waiver scheme and work to remove the possibility that the Obama administration would approve proposals to gut welfare reform. This has become even more imperative because, as we learn more about how the Obama administration developed their welfare work waiver rule, the more it becomes apparent that the Obama administration has been disingenuous in it characterization of the policy and its intended outcomes. HHS initially justified their welfare work wavier scheme by suggesting that they were merely doing the bidding of the State. They referred to comments solicited by them from my State of Utah, in 2011, requesting administrative flexibility as justification for advancing policies that could undercut key provisions of welfare reform. However, in exercising the due diligence oversight role of the legislative branch, Ways and Means chairman Dave Camp and I were able to compel HHS into providing an internal memo relating to the development of the welfare work waiver rule. I ask unanimous consent to have this memo printed in the Record at the conclusion of my remarks. As my colleagues will see, contrary to claims that the Obama administration was simply capitulating to State's requests for flexibility, this memo reveals that, as far back as 2009, policy makers in the Obama administration were working to determine which provisions of welfare reform could be waived or disregarded. Therefore, the claim that the Obama administration was merely capitulating to states' request for administrative flexibility is disingenuous, at best. A careful review of this memo further reveals that HHS attorneys have concluded that the Secretary has the authority to allow States to ignore prohibitions on Federal welfare spending which would ``permit a state to extend assistance to a family for which assistance would be prohibited under Section 408 of the Social Security Act.'' Mr. President, the following individuals and activities are prohibited under section 408 of the Social Security Act: fugitive felons and parole violators, families where the adult has exceeded 5 years of assistance, noncitizens with a five-year ban on assistance as described in title IV of the Personal Responsibility and Work Opportunity Reconciliation Act, and medical services, such as abortion. Under S. 744, the legislation before the Senate today, the prohibitions detailed in title IV of PRWORA for Federal means-tested public benefits, such as cash welfare, are extended to registered permanent immigrants, blue card holders, and aliens admitted to the United States under 101(a)(15)(V) or 101(a)(15)(Y). However, under HHS's current interpretation of section 1115 authority, since title IV can be ignored, Federal welfare benefits could be paid to these groups of noncitizens. I have always wanted to support the current bill before the Senate, and I committed to working with Senator Rubio and others to try and improve the bill so that it can garner broad bipartisan support. I initially filed an amendment that would have prevented the Obama administration from potentially gutting welfare reform and explicitly prohibited them from permitting the types of spending outlined in section 408 of the Social Security Act. This amendment was deemed too broad to be relevant to the immigration debate by the Democratic majority. So, in the spirit of compromise, I agreed to limit my amendment to only apply to the section of 408 dealing with noncitizens--in other words, the ability of Obama administration to waive work requirements and permit Federal welfare spending on certain prohibited individuals and activities remains. The Obama administration's interpretation of their 1115 waiver authority is and will remain an impediment to successfully improving and reauthorizing the TANF programs. This is because any compromise could be undermined by this or any other administration. I take the chairman at his word that he intends to pursue a bipartisan consensus on improvements to the TANF programs, but I need to stress that consensus will be difficult to reach as long as this or any future administration can waive key features of a compromise reached by the Congress. This Senator remains baffled why the Obama administration is so reluctant to engage in a discussion of welfare reform. To this date, nearly a year after the Obama administration went public with their welfare work waiver rule, they have not issued a single clarification on what work or work related activity they wanted to allow states to count as work and why the current flexibility in TANF is insufficient. It appears that despite my entreaty last year for the Obama administration to engage in a dialogue about improving the TANF programs, their strategy for the immediate future appears to be one in which they will simply let TANF wither on the vine. I do not want that to happen. TANF provides critical support of working families and helps States provide services to vulnerable children. But too much of TANF spending is unaccounted for, and programs funded by TANF dollars may not be coordinated with other efforts directed towards at risk populations. The robust welfare-to-work programs from 20 years ago have virtually vanished. I know that the chairman of the Senate Finance Committee shares my concerns about the future of TANF. I understand he has a different perspective on the administration's intentions relative to their welfare waiver policies. I hope to be able to work with Chairman Baucus and the other members of the Senate Finance Committee to propose commonsense reforms to the TANF programs during this session of Congress.

Mr. HATCH

Mr. HATCH. Mr. President, I want to thank my colleague from South Carolina for his kind remarks. He is right, a lot of these folks came to the forefront on this bill.

Mr. HATCH

Mr. HATCH. Mr. President, I want to thank my friend from Montana for all the hard work he has done with regard to the Senate Finance Committee and of course the tax problems we have in this country. He has been truly dedicated to reforming our Nation's Tax Code and truly dedicated to doing it in a bipartisan manner, which is something I very much appreciate. Our work together is starting to pay off. Tax reform is building momentum. Over the past 3 months we have issued 10 bipartisan options papers that detail reform proposals in every area of the Tax Code. The full committee has met on a weekly basis to discuss these options. We have made tremendous progress. We are now entering the home stretch, all of this under the leadership of Senator Baucus. Senator Baucus and I are here today to call on all of our colleagues--all of our colleagues--in the Senate to now provide their input to help us get tax reform over the finish line. We have a historic opportunity to do tax reform this Congress, to make the code simpler and fairer for the people we serve. We are determined to make it happen, but we need every Member's participation. In order to make sure we end up with a simpler, more efficient, and fairer Tax Code, we believe it is important to start with a blank slate, a Tax Code without all of the special provisions in the form of exclusions, deductions, credits, and other tax preferences that some refer to as tax expenditures.