Orrin Hatch

Mr. HATCH

Mr. HATCH. Mr. President, I ask unanimous consent to have printed in the Record the GAO opinion letter dated September 4, 2012, and the TANF Information Memorandum dated July 12, 2012.

Mr. HATCH

Mr. HATCH. I thank my colleague. He is always gracious and a very fine man, and I enjoy serving with him very much. Cyber Security Mr. President, I was very disappointed that we were not able to proceed with the cyber security bill today. This side had the votes against cloture. The reason is because the Senate is not being run as an open Senate anymore. This is such an important bill. It is not some itty-bitty bill that we can call up and foreclose any amendments. In fact, most bills are not that are brought to the floor. I think if it were the other way around and the Republicans were in the majority and they started doing what we have been going through lately--I don't blame Senator Reid for this; I know it comes from his caucus. If we were pulling the same type of thing, I have to say the Democrats would be in orbit. Usually in the Senate we never build a procedural pyramid until after there has been a reasonable time for debate and open amendments. That is the way it is usually done. In recent months--frankly, over the last few years--they call up a bill, file cloture as though we are filibustering when we are not, and then tie up the parliamentary tree so we can't have amendments, in the greatest deliberative body in the world, supposedly. That has been very irritating to people on our side. I would caution my friends on the other side: This is getting to the point where it is becoming a matter of grave concern to everybody and irritation to everybody as well. I think we ought to get back to being the Senate that we all know works better if we respect both sides and their ability to come up and say what they need to and bring the amendments up that they feel are good amendments. But be that as it may, that is the way it is right now. We have to do the cyber security bill. Everybody knows that. The fact that cloture was not invoked does not mean we shouldn't return to that bill and put the time into it and make sure we resolve the conflicts that have arisen, some of which are very important suggestions, and allow the type of proceeding that the Senate has always been known for. Value-Added Tax I wish to change the subject. Recently, there has been some commentary about the lack of substance in our political debates. This concern, that Washington has failed to confront our deepest political challenges, which are, in large part, fiscal challenges, is not without some merit. But I would add one caveat to this analysis. It is not for lack of trying on the part of Republicans to have a grownup debate about our Nation's fiscal and economic future. Republicans are putting forward real ideas about tax and entitlement reform with real numbers attached. However, I would submit that only one side has put a team on the field for this debate. When it comes to putting forward solutions to our nearly $16 trillion of debt and our archaic Tax Code, the President and his Democratic allies have largely stayed on the sideline. Instead of offering up bold proposals to bring down the debt that has ballooned, given the President's commitment to ever larger and more active government, they have determined to give the American people talking points that attack the wealthy and successful small businesses in the name of equality. Given the fiscal cliff threatening America's families and businesses, this decision to put politics above solutions is madness. But there is a method to it. The fact is the President and his liberal allies are not able to put forward serious solutions because they are between a rock and a hard place. The rock is their base--a liberal minority that refuses any meaningful reforms of the spending programs that are bankrupting our country. The hard place is the vast majority of the American people who flatly object to the massive tax increases, and especially those 940,000 small businesses that would be hit the hardest. Of course, those massive tax increases would be required to finance on a permanent basis the President's commitment to larger government. The bottom line is that the President is unable to come clean. He cannot tell the American people what the true tax bill would be for his expansion of government. He suggests that our books can be balanced by taxing the rich. We all know that is poppycock. Hence his commitment to the Buffett tax and other redistributionist schemes that have been pursued by the Senate's Democratic leadership over the past 2 years as though they are serious. Give me a break. No serious person believes the Obama administration's government can be financed simply by going after the so-called wealthy. The only way to do it is by going after all Americans and raising taxes on all citizens. That is the silent plan the President will not discuss on the campaign trail. That is the Democrats' phantom budget. And that is what I want to discuss today. When it comes to addressing our deficits and debt, only one party in Washington has been willing to put its cards on the table. Only one party has been willing to acknowledge the difficult choices that have to be made. The other side has refused to provide any concrete solutions of their own, while demonizing anyone who has had the temerity to propose anything resembling a workable solution. A case in point. It has been more than 3 years--3 years--since the Senate, which has been under Democratic control the entire time--passed a budget resolution. Those budget resolutions are mandatory. Yet they blindly ignore it. Three years--three years--without a budget. Four years ago, if someone wrote a novel or a screenplay about a Senate majority that refused to pass a budget for 3 years, people in both parties would have laughed and called it absurd. Yet here we are 3 years later. In fact, the only budget proposals from the Democrats have come from the White House and they have been anything but serious. According to the CBO, the President's most recent budget would keep the United States on the same unsustainable path, with an ever-widening gap between revenues and spending, varying from 8.7 percent to 2.5 percent of GDP, and averaging 3.2 percent of GDP. We should keep this in mind when we hear the President and his allies suggest we can get our debt under control simply by raising taxes on the wealthy. The President raises plenty of taxes on upper income individuals and small businesses in his budget. Yet under the President's budget, debt held by the public would still reach 76.3 percent of GDP by the end of the budget window. Even the President's budget, which raises taxes significantly, comes in with a debt limit that is well above what leading economists such as Kenneth Rogoff and Carmen Reinhart consider the danger zone of 70 percent. The President claimed a few weeks ago that his biggest failing over the last 3 years was that he cared too darn much about policy. If only that were true. But the fact is he ignores the policy experts and their warnings when it comes to the debt. Consider what CBO Director Elmendorf wrote to House Budget Committee Chairman Paul Ryan regarding the debt earlier this year. I have to say, Mr. Elmendorf is a Democrat, but I found him to be extremely trustworthy and honest. Here is what he wrote: Budgetary policies affect the economy in a variety of ways . . . All else being equal, scenarios with higher debt tend to imply lower output and income in the long run than do scenarios with lower debt, because increased government borrowing generally crowds out private investment in productive capital, leading to a smaller stock of capital than would otherwise be the case. Director Elmendorf continues: Moreover, that same crowding out leads to increases in interest rates, raising the government's interest payments and therefore further boosting government deficits and debt. A perpetually rising path of debt relative to GDP is unsustainable. That is what our CBO Director, a Democrat, says. Again, I will vouch for the fact that he is a very good economist who, as far as I have seen over all of these years I have worked with him in Washington and watched him help our committees, is totally honest. No one can legitimately dispute that our entitlement programs-- Medicare, Medicaid, and Social Security, in particular--are the major forces driving our future national debt. No one can dispute that. This chart I have in the Chamber, produced by the Bipartisan Policy Center, shows the cannibalization of the budget and ultimately the American economy if we go with the status quo on health care entitlements. Look at this blue line on the chart: health care spending. Under the questioning by Members of Congress, leading Obama administration economic policy officials, such as Treasury Secretary Geithner, basically demur on dealing with the runaway entitlement spending. You can see, it is running away. In February, Secretary Geithner identified to House Republicans that the administration was putting forth no plan to reform entitlements, but, as he said: ``we know we don't like yours.'' The only official proposals we receive from the President and his administration would simply maintain the status quo--a status quo that is so unacceptable that not one Member of the House or the Senate supported the President's budget, not one in either body. So what proposals do Senate Democrats support? Keep in mind, this blue line on the chart is the health care spending line. The red line shows Social Security, which is relatively flat. It goes up a little bit. That is the Social Security line. The green line happens to be discretionary spending, which has gradually come down--or will come down from 2012 to 2052, according to what we are trying to do. Other mandatory programs are pretty much even. But health care spending is running out of control. That is Medicaid and Medicare and all the other health care spending--but especially Medicaid and Medicare. What proposals do the Senate Democrats support? On that, they prefer to keep the American people guessing. Perhaps the President will keep the American people in the dark until he possibly gets ``more flexibility.'' Democrats have not been willing to put their vision down on paper. By comparison, there is the budget put forward by Paul Ryan. Unlike the Democrats who are hiding the ball from the American people, Republicans have not been afraid to talk about the Ryan budget. This is a comparison of budgets on this chart. The Ryan budget constrains Federal spending and keeps it close to its historic average at 21 percent of GDP. Here is the House Ryan budget, as shown on this chart in the red. By exercising that spending discipline, the budget pulls the deficit down to 1.7 percent of GDP. By comparison, President Obama's budget deficits are at 3.2 percent of GDP, on average--nearly double those of the Ryan budget. When you boil it down, there is $3.5 trillion more in deficit reduction in the Ryan budget than in the President's budget, which is represented by the blue line on the chart. There is a $3.5 trillion difference between these two. That is how much the Federal Government currently spends in 1 year. Because of the President's failure to tackle runaway entitlement spending, that yawning fiscal gap between the two plans only gets much bigger in the outyears. As you can see right here on this chart, look at how health care spending is going up in these outyears, from 2012 all the way to 2052. As you can see, it is constantly going up from 2012. Whether we are debating the budget or the debt ceiling or Taxmageddon, one thing is clear: The President and the Democrats in Congress do not like to talk in specific numbers. Instead, they want the American people to measure specific Republican alternatives like the Ryan plan against a series of campaign speeches and attack ads. The current fiscal debate is between the Ryan budget and a phantom Democratic budget. Apparently, the Chicago campaign sharpies have determined it is safer to wait until after the election to finally unveil the details of the phantom budget, which just in health care spending is going to go forever up and eat our country alive. And their advice has been heeded by the Democrats. If your proposals are never written down, no one can check your math. We do not know the actual fiscal position of my friends on the other side of the aisle, but we can fill in some blanks. We know by their vicious attacks on the spending restraints in the Ryan budget and other Republican proposals that the President and his allies in Congress have no interest--zero; no interest--in reducing spending. We know their income tax proposals do not add up to much in terms of revenue. Even if they let the entirety of the current tax relief expire--which is a distinct possibility given the game of chicken they are currently playing with the fiscal cliff--there probably is not enough money to be found in the income tax to pay for the coming explosion in entitlement spending. You can see it right there on this chart in health care alone. So where does the Democrats' phantom budget find the fiscal juice to fill its structural hole? The answer is simple: a European-style value- added tax, the VAT, or its green cousin, a carbon tax. I am quite certain my colleagues on the other side of the aisle will write this off as fear-mongering and fabrication. But what other conclusions are left to draw? Without significant reductions in spending or reforms in our entitlement system--neither of which we can expect from this President or the Democrats currently in Congress--there is not enough money to be found in traditional revenue streams to cover the President's spending bill. A VAT, a value-added tax--or some other euphemized form of a VAT--appears to be the only option left to our friends on the other side of the aisle if they want to continue spending at current projections. Many prominent Democrats have expressed some level of support for the value-added tax in the past. In 2009, during an appearance on the Charlie Rose show, then-House Speaker Nancy Pelosi said that a VAT was ``on the table.'' A year later, President Obama, in a CNBC interview, expressed a willingness to consider a VAT to address the deficit. Countless high-profile Democratic strategists and advisors--people such as John Podesta and Paul Volcker--have unapologetically suggested implementing a VAT in the United States. Ezra Klein, a writer with real cache among liberal Democrats, expressed similar views in the Washington Post in 2009. Here is a revealing quote from Mr. Klein's article: First, a simple fact: Tax rates will rise over the next decade. Even with painful spending cuts, tax rates will rise. At some point, taxes have to come further into line with spending, and that means the direction they will travel is up. But--and this isn't a fact--they won't rise within the current system. People don't trust the current tax system. It feels opaque and unfair, largely because it is. An increase in revenues will have to come alongside a change in the tax system. And the change in the tax system that most economists prefer and that most other countries use is a value-added tax. I agree with Mr. Klein that our current tax system is a mess. But while he and other liberals see that as an opportunity to seek larger pots of tax revenue elsewhere, my fellow Republicans and I see it as a call to reform the Tax Code. And we disagree on the fundamental assumption behind Mr. Klein's arguments. Like most of my friends on the other side, Mr. Klein takes at face value the benefits of future spending. Notice how he uses the phrase ``taxes will have to come further into line with spending.'' His focus is almost entirely on the revenue side, with only a passing reference to the possibility of reducing spending. A VAT would increase Federal revenues, but it would also effectively be a tax hike on every American, including those who currently pay no income tax. If a VAT were imposed on top of our existing income tax system, it would likely cripple our economy by imposing new costs on virtually every purchase of goods and services in the United States. It would hamper manufacturing and kill entire retail sectors. Worst of all, it would be the most regressive tax ever imposed on the American people, disproportionately impacting families with lower incomes who spend a higher percentage of their wages on necessities. Simply put, a VAT would be bad policy in a strong economy. But in the midst of a slow economic recovery, it would be tantamount to economic suicide. It would be jet fuel for larger and larger government. Numerous studies, including a 2010 study by former CBO Director Douglas Holtz-Eakin, have demonstrated that in virtually every instance, the implementation of a VAT in other industrialized countries inexorably led to increased spending and an expansion of government. Make no mistake, the current administration and my Democrat friends know only one way of engaging in fiscal reform--broaden the base. And every middle-income family in America should know that they will get hit with higher taxes to pay for the Democratic goal of ever-expanding government control over our economy, over our lives, and over your paychecks. The contention that implementing a VAT would make our government more fiscally responsible is a dog that just won't hunt. The purpose of a VAT would not be to shore up deficits and pay down debts, but to expand the government into new areas backed by an all-new source of funding. Once again, I am quite certain that virtually all of my Democratic colleagues would publicly deny that their phantom budget includes a VAT. For now, they want us to ignore the VAT behind the curtain and instead listen as the Great and Powerful Oz proclaims that every government program can be funded and every budget balanced simply by eliminating the so- called tax cuts for the rich. But the American people are not so easily duped. And they are showing up at Emerald City looking for real leadership and real answers, not just talking points. That is the real choice facing the American people today. They can choose the fiscal leadership of those such as Chairman Ryan who have put forth actual, real-world proposals to bring about reasonable restraints on entitlement spending and maintain taxation at its historic levels, or they can choose the President's impersonation of fiscal leadership, which is built on a phantom budget and large-scale attacks on anyone, such as Chairman Ryan, who offers a real, verifiable alternative. But let's be clear. The phantom budget simply cannot translate into reality without collecting taxes that go far beyond those the President and congressional Democrats publicly support. Given the limitations on existing revenue streams, a value-added tax, even with all of its many drawbacks, is one of very few logical alternatives left to the other side. If they do not plan on instituting a VAT, they need to come clean with the American people and let everyone know how they plan to pay for their outsized spending. Regardless of who wins this election, Congress will have to do more than just click its heels and wish for enough money to pay all our bills. Therefore, I think it is fair to assume that, in lieu of a line item for ruby slippers, the Democrats' phantom budget includes levels and forms of taxation heretofore unseen in the United States. You can be sure that if it is not a VAT, it will be something equally damaging to our economy. Let me end with one other thought; that is, that we all know, according to the Joint Committee on Taxation, of which I am a member-- but it is a nonpartisan committee run by very good economists--the bottom 51 percent of all households--not just people; all households-- do not pay a dime of income tax. We have brought that about out of compassion for them, I have to say, but it means the upper 49 percent are paying for just about everything. Well, my friend Treasury Secretary Geithner pointed out: But, yes, they pay payroll taxes. Well, we all do. That is Social Security. They do not pay a dime of income taxes. I was quick to point out to Mr. Geithner that 23 million of them, approximately, get refundable tax credits from the government that are more than they pay in payroll taxes, so they are really not paying payroll taxes. Almost 16 million of them get refundable tax credits from all of us others out there, from the government itself, which is more than they and their employers pay in payroll taxes. The fact is, I fail to understand why my friends on the other side are looking for ways to spread the base to an unsuspecting 51 percent who currently do not pay any real income taxes. I think there has to be a better way of spreading the base than doing it through a VAT, which in Europe has proven to be a ready way for politicians to increase spending over and over without really any inhibition or any real inhibition. So if what I am talking about today is prophetic, it means without question that our friends on the other side want to keep spending. They want the Federal Government to keep growing, all at a cost to individuals, and they want to do it because that is what has kept them in power all of these years, taking all of your money out there and claiming that they are compassionate with your money when they are unwilling to be compassionate enough to keep living within our means. I yield the floor.

Mr. HATCH

Mr. HATCH. Mr. President, today I rise to pay tribute to CPT Scott Patrick Pace, United States Army. Captain Pace returned with honor to his heavenly home on June 6, 2012. By all accounts, he lived a life of service, hard work, and faith. While learning about Captain Pace's life, I was struck by the description of those closest to him. They repeatedly described the Captain as someone who ``strived to do well.'' As a youth, he faced obstacles which would keep many from pursuing athletics. However, as a testament to his character, Captain Pace pushed himself and overcame this hurdle by becoming an accomplished athlete in basketball and swimming. His coaches described him as someone who ``took responsibility for himself and the team but never blamed his teammates. He's the type of player every coach wants . . . in fact ever coach wants five of him . . . Scott was a coach's dream and a leader. He'll be missed dearly in this community.'' In addition, to his accomplishments in athletics, Captain Pace excelled in academics. He was at the top of his class in High School. He initially attended Brigham Young University, before being called to a mission for the Church of Jesus Christ of Latter-day Saints in Cordoba, Argentina. After his mission, he was accepted to the United States Military Academy at West Point. At West Point, Captain Pace continued to set the example by not only graduating with a major in nuclear engineering, but continuing his love of athletics by playing varsity basketball, sprint football, and was a member of West Point's intercollegiate handball team. In fact, Captain Pace was named the most valuable player when West Point's Handball Team won the Division II National Championship. Upon graduating West Point, at the same time as his brother, Rick, Captain Pace chose aviation and became a OH-58 Kiowa Warrior helicopter pilot and a platoon leader. He then served two back-to-back deployments, for a total of 20 months, in Iraq. When he returned in 2009, Captain Pace was assigned to Fort Huachuca, AZ. There he completed the Captain's Career Course and intelligence training. After completing his studies, he was assigned to Fort Bragg, where he became the commander of Fox Troop, 1st Squadron, 17th Cavalry Regiment, 82nd Airborne Division. It was in this leadership role, when his helicopter was shot down while engaging the enemy in Ghazni Province, Afghanistan. I was also quite taken by the comments of Captain Pace's teammates, fellow servicemembers, and friends who stated he always motivated them, not only to do their best, but to be their best, even when no one else was watching. Captain Scott Patrick Pace was an outstanding young man. He was among the best our Nation has to offer. I know I am joined by the entire Senate in extending our heartfelt condolences to Captain Pace's family. Elaine and I will always keep them in our prayers.

Mr. HATCH

Mr. HATCH. Mr. President, today we are debating the proposal of the Senate Democratic leadership to raise taxes on the American people. Pursuit of this tax hike strategy is clearly being instigated by the President's reelection efforts. I suspect that many of my friends on the other side are very uncomfortable with this strategy. I can think of a number of Senate Democrats whose constituents would be surprised to learn their Senator supports tax increases on small businesses, an increase in the alternative minimum tax, and hikes in the death tax. With the economy still on the ropes, I think they would be surprised to learn their Senators supported a tax hike strategy that might win some votes but at the risk of sparking a recession. That is what the President wants. We will see if that is what he gets. He has pitched his tax hike plan as a way to be fiscally responsible. That could not be further from the truth. One need only look at the treatment of the House budget by my friends on the other side. That budget received more votes than any other budget considered by the Senate, including the phantom budget advanced by the Senate Democratic caucus. The House budget provided $180 billion more in deficit reduction than the President's budget for 2013. The House budget's extra deficit reduction of $180 billion exceeds the differences in deficit impact between the proposal I introduced with my friend and colleague, the Republican leader, and the proposal advanced by my Democratic friends. That is true even if you apply the other side's distorted and misleading accounting of the differences between the two proposals. More on that in a moment. When we hear our friends on the other side say they must risk going off the fiscal cliff for deficit reduction, consider this: They rejected out-of-hand spending restraints that provided more deficit reduction than is at stake here today. Not only are the deficit reduction numbers phony, but the President and his Democratic allies in the Senate have repeatedly suggested that they are willing to intentionally drive our economy off what Fed Chairman Ben Bernanke has called the fiscal cliff in order to make a political argument about the top marginal tax rates. The President thinks he has struck political gold with this argument. He will be able to run for reelection on a platform of raising taxes under the mantle of deficit reduction. Now, this might be politically advantageous, but I doubt it. I do know that from a fiscal and economic perspective, the President's signature proposal threatens serious damage to our already fragile economy. The President's tax increases on those he deems ``the rich'' in fact represent a massive tax hike on the small businesses that are necessary for economic and job growth. Moreover, until he gets his way on raising taxes on these small businesses, he is threatening every single American taxpayer with a tax hike. Like a petulant child, he is insisting that it is his way or the highway. We have had far too much of that. He will get his way on raising taxes on the small businessmen and entrepreneurs--who find no shelter in today's Democratic coalition of unions, lawyers, and government employees--or he will let the current tax relief expire, raising taxes on all Americans. This is the antithesis of statesmanship at a time when our economy requires serious direction. It is the political equivalent of a temper tantrum. I expect that American voters will have about as much patience for this as they would a similar fit from their children. The American people want a grownup in the White House, but on tax policy we appear to be dealing with adolescence. I have said before that the President's proposal is the policy equivalent of Thelma and Louise intentionally driving their convertible off a cliff. The difference is that there is at least some ambiguity left about the fate of Thelma and Louise. If the President gets his way and either raises taxes on small businesses or denies relief to all American taxpayers, there will be no ambiguity about whom to hold responsible when our economy crashes. When a liberal Democratic President has lost the New York Times, he has lost America. Even the Times understands what is coming if the President continues to put the pedal to the floor and drive us over the fiscal cliff. The Times wrote that ``with the economy having slowed in recent weeks, business leaders and policy makers are growing concerned that the tax increases and government spending cuts set to take effect at year's end have already begun to cause companies to hold back on hiring and investments.'' That is 100 percent right. The election is not for another 3 months, and already the President's lack of direction and the threats emanating from Democratic leadership about letting the tax relief expire are leading businesses to slow down. How can businesses plan for next year and how can they make hiring or investment decisions when they have no idea what their tax rates are going to be? They simply can't. And the President and Senate Democratic leadership, with their delay and confusion about how to extend this tax relief, are doing absolutely nothing to inspire confidence in these job creators. Rather than address the expiration of the 2001 and 2003 bipartisan tax relief, we have been debating campaign commercials masquerading as serious legislation. Last week the Senate wasted its time on yet another piece of legislation that had absolutely no chance of becoming law and zero prospects for creating jobs. It is worth comparing the puny impact of the bill considered last week to the size of the coming tax hikes--tax hikes so large that the Washington Post has referred to their impending arrival as ``taxmageddon.'' Referring to this chart, look at the impact of the 20-percent credit versus taxmageddon over the next 10 years. The Bring Jobs Home Act would only cost about $87 billion. Taxmageddon is going to cost us $4.538 trillion. Make no mistake, our small businesses and our economy face an existential threat at the end of 2012. Yet the majority leader schedules votes that generate campaign fodder rather than jobs or lasting economic growth. Facing a fragile recovery and a weak jobs market, President Obama seems content to sit idly by and allow the scheduled $4.5 trillion tax hike to occur just to make a populist political argument about the need for the so-called rich to pay what he thinks is their fair share. Congress needs to act now in order to prevent this tax hike on America's families, individuals, and job creators. Look at this chart again--the difference between the Bring Jobs Home Act and taxmageddon. It is clear that they are driving us off the cliff, and they are willing to do it for political reasons. It is critically important for our economy and the American people that we act now to extend the bipartisan tax relief originally signed into law by President Bush and extended by President Obama back in 2010. As you can see on the chart, the tax legislation to-do list, nothing was done on tax extenders, although we are willing to work on that with our committee chairman in the Finance Committee; nothing was done on the AMT patch, but we are willing to work on that in the overall scope of things; and nothing was done on death tax reform. In fact, the suggestion by the Democrats is to increase it so that all the small farms--or many of them--will get hammered with taxes, along with a lot of small businesses. Nothing was done to prevent the 2013 tax hikes. No, no, no, no on everything. This is the most crucial piece of legislation Congress can address this year. If we allow this tax relief to expire as scheduled, almost every Federal income taxpayer in America will see an increase in their rates. Yet that is what our friends on the other side said they are going to do if they don't get their way--like petulant children. Some will see a rate increase of 9 percent. Others will see a rate increase of as much as 87 percent. Because the vast majority of small businesses are flowthrough business entities, any increase in tax rates for individuals necessarily means that those small businesses will get hit with a tax increase. This tax increase lands on these small business owners even if they do not take one penny out of their business. That is what the Democrats are going to do to them. They are willing to go off the cliff and do this. Our economy simply cannot afford to take on such a fiscal shock. It was just in 2010 when the President said the economy was so fragile we needed to carry over the 2001 and 2003 tax cuts. We are in worse shape today than we were in 2010, but unfortunately-- or fortunately--we are in an election year. Unfortunately, the President is playing games with these very serious matters. Our economy simply cannot afford to take on such a fiscal shock. Economists estimate if these current tax rates are allowed to expire, the economy could contract by approximately 3 percentage points. Considering the first quarter GDP growth was 1.9 percent and that expectations are even lower for the second quarter growth--that will be reported this Friday--going over the fiscal cliff would almost certainly throw us into a recession. I don't know many economists who would disagree with that. Certainly the Fed doesn't disagree. We are going to go into a recession if the Democrats get their way. We could even slip into recession in the second half of this year, given reluctance of businesses to hire and invest due to fiscal uncertainty. For the President and others who argue we should raise the top two tax rates in the name of fiscal responsibility, I would just like to point out a few things. The Senate majority leader introduced his tax bill--one that largely mirrors the President's proposal--under the auspices of deficit reduction. It closely adheres to the Democratic talking point that the only thing standing between our deficits and fiscal stability is the current top marginal tax rates. We have heard this argument for a year and a half, with the President and his Democratic allies insisting it is not their out-of-control spending that got us into this mess but the Republicans' refusal to allow for tax hikes on the so-called rich. That is laughable. This argument sounds nice, but it is belied by the actual facts. According to the Joint Committee on Taxation, an apples- to-apples comparison of the Democrats' tax proposal and the proposal I introduced with my friend the Republican leader shows a difference of $54.5 billion. The Democrats' bill--which raises the top rates and expands the death tax, while patching the AMT for 1 year--is scored at $249.7 billion, and the score of my bill--without the 2013 AMT patch-- is $304.2 billion. So we have a debt that is fast approaching $16 trillion. Taxes are set to go up by $4.5 trillion, and Senate Democrats are crowing about their fiscal responsibility, threatening to drive the economy off the cliff, over $54.5 billion worth of tax relief? I believe this is called missing the forest for the trees. In order to satisfy their urge to redistribute $54 billion of taxpayer dollars, they are willing to risk a recession and see taxes go up by $4.5 trillion. The President recently claimed we need to raise the top two tax rates because ``it's a major driver of our deficits.'' The numbers show this is plain and simple nonsense. The real difference between the Democratic and Republican plans is only $54.5 billion--or about 5 percent of the deficit. That represents .34 percent of our national debt. To put it another way: The Democrats' tax hike proposal would only provide enough additional revenue to pay for 5 days of Federal Government spending--5 days of Federal Government spending. It is also worth noting what exactly the Democrats' refusal to provide 2 years of AMT relief means for their constituents. If Senate Democrats do not patch the AMT in 2013, their AMT will take away over 40 percent of the tax relief they claim to be providing with their bill. This is their prerogative, but I hope the hometown papers in northern Virginia, New Jersey, New York, Florida, and Colorado are paying attention. I hope they are paying close attention to what a lack of AMT relief will mean for middle-income families in those States. These tax proposals, in the end, have nothing to do with sound tax policy that maximizes economic growth, and they have nothing to do with deficit reduction. They have everything to do with pursuing an antique economic philosophy that is principally concerned with running down the economy's job creators and entrepreneurs. The explicit tax policy is only the half of it. We learned yesterday from the Congressional Budget Office the true tax bill for ObamaCare is over $1 trillion. We were promised there wouldn't be any tax increases. It is the biggest fiasco I have seen around here in almost the whole time I have been here. In fact, I can't think of anything bigger. All the new ObamaCare regulations will cost McDonald's franchisees alone more than $400 million in health care costs. The President might think Ray Kroc did not build McDonald's, but this is delusional. He might view the small businessman who took a chance and opened those franchises as not especially smart, not responsible for his own success, but this is a view that could only be embraced by an academic and activist who has no experience in the private sector. The Joint Committee on Taxation tells us that 53 percent of all flowthrough business income in the United States would be subject to the President's proposed tax hikes. Take that, small business. The President is saying: We don't care about you, I guess. I do, and Republicans certainly do. The President's proposal would take the marginal tax rate on small businesses from 33 percent and 35 percent to 39.6 percent and 41 percent, respectively. Look at this chart. This is the increase to small business--the top marginal rates. As we can see, it goes up from 33, 35 to 40 and 41 percent. How could that not help but ruin our economy? This is the kind of economic thinking we are putting up with around here, and it is all coming from the White House. Our friends on the other side apparently don't want to take the White House on. It is an increase of 17 to 24 percent on the marginal tax rates for small businesses. Ernst & Young recently released a study showing these proposed tax hikes--on top of ObamaCare's 3.8 percent tax increase--on dividends, interest and capital gains would reduce our economic output by 1.3 percent. The Ernst & Young study also found that real aftertax wages would fall by 1.8 percent as a result of President Obama's policies. Not surprisingly, the study noted 54 percent of the entire private sector workforce is employed by flowthrough businesses, such as S corporations and partnerships, the majority of which would see their taxes go up under the President's plan. That is where the jobs are. What kind of thinking are they willing to accept on the other side of the aisle? It is hard for me to believe. There isn't a person over there I don't care for. It is hard for me to believe they are not willing to stand up to this President and say: Hey, the game is over. The truth is many of the people targeted by Democrats as wealthy are, in fact, middle-income, small business owners who spent their whole lives building up a business, then selling it and falling into the top bracket just for the year of the sale. Consider a real-life example provided by the Associated Builders and Contractors. A husband and wife from Pennsylvania who retired to Florida owned an S corporation. In 2009, the couple paid no Federal income tax because they did not have enough taxable income to owe any tax. In 2010, when they sold their business, their adjusted gross income was about $780,000, and they paid $170,000 in taxes. If they had not sold their business in 2010, they would have paid no taxes. So the one-time sale of the business, built up over many years, caused these small business owners to be in one of the two top brackets for just 1 year, after years of building their business and then having to sell it and have this catastrophe fall on them. Yet the President would have the American people believe this couple is part of some rich elite who are refusing to pay their fair share. That is not all or, as Ron Popiel would say: But wait, there is more. Last week, before the ink was even dry on the Democratic leader's small business tax hike legislation, the bill was changed to substantially increase--get this--the death tax. Why was that? Because they found there was only $28 billion difference between the Democratic bill and our bill, and they wanted to find a way to get it up to $50 billion, which is, as I said, 5 days of spending around here. It might be hard to believe, but this proposal is even worse than President Obama's. The proposal by the Democratic leader would impose the death tax on 15 times the number of estates than under current tax policy, according to the Joint Committee on Taxation--the nonpartisan Joint Committee on Taxation. It would increase the number of estates hit by the death tax from 3,600 estates to 55,200. According to the Joint Committee on Taxation, 24 times more farming estates would be hit by the Democrats' death tax proposal. What is going on over there? These are intelligent people--our friends on the other side. How can they possibly live with this? According to the Joint Committee on Taxation, 24 times more farming estates would be hit by the Democrats' death tax proposal which they wrote in here. I have to believe they just did it so they could raise the difference between the two bills from $28 billion--3 days' spending by the Federal Government--to a little over $50 billion--5 days' spending. Let's call it 8 days' spending. The number of small businesses hit by this death tax spike would grow by 13 times. What would that do to the incentives for people to build small businesses, small businesses that could become big businesses and employ thousands of people? This proposal would subject 2,400 percent more farms and 1,300 percent more small businesses to the death tax. Farmers work all their lives hoping to leave their farm to their children. They will have to sell the farm to be able to pay the death taxes our friends on the other side have written into this bill. They can't be serious. But they are. I would like to be a fly on the wall when some Members of this body go home and attempt to defend their support for a proposal effectively designed to hobble small businesses and family farms. The President might think it is no big deal. I am sure he has never been on a farm, other than since he has been President. I am not sure he has ever worked with a small business. He has been a community organizer. That is important, but that doesn't necessarily qualify someone for President. After all, according to the President, those farmers and businessmen were not responsible for their success anyway. I am going to give the President the benefit of the doubt on that one. I think maybe he misspoke. But I sometimes believe, in the President's view, he thinks these folks aren't very smart; they owe it all to the bureaucrats stationed at the Departments of Agriculture and Labor and their helpful investment-creating regulations. We all know about those, don't we? The sweat and tears and sacrifice of the families and individuals who create and run small businesses have nothing on the hard work and commitment of the mid-level bureaucrats who make their success possible. But my guess is that some Members of this body have a slightly more nuanced understanding of the importance of these farms and businesses to their communities, on both sides of the aisle. They have to. There is a limit to what this President should ask of my Democratic friends, and he is asking way too much. They should stand up and say, We have had it. We are not going to do this. It seems clear what the agenda of the Senate should be. We should be focused like hawks on preventing Taxmageddon. We should be focused on job creation. Yet instead of addressing these important matters, President Obama and his Democratic allies are spinning their wheels trying to raise taxes on politically unpopular groups. Even the Democrats' treasured Keynesian economics says you do not raise taxes in a weak economy if you want to create more jobs. The President is devoting his entire reelection campaign toward tax hiking in the name of fairness. We have voted twice on proposals to raise taxes on oil and gas companies for no other reason than that Democratic pollsters found the President's base does not like oil and gas companies. Then a few months ago, we voted on the silly Buffett rule. This was not serious tax policy. It was a statutory talking point--and not a very good one at that. Then there was last week's bill on overseas investment that was little more than a campaign advertisement with cosponsors. The American people are tired of these political stunts. They are tired of the Senate doing nothing. They are tired of the Senate bringing up bills that aren't going to go anywhere. Every minute Democrats spend playing politics is a minute we fail to prevent the largest tax increase in American history. But instead of working to prevent this massive tax hike on small businesses, the President and the congressional Democratic leadership have doubled down on their tax hike strategy. Believe it or not, while doubling down on their tax hike strategy, our friends on the other side are pushing the canard that the Hatch- McConnell proposal is a tax hike. Yesterday, one of our colleagues--who I won't name, though he named me--said the following: Republicans claim not to want to raise taxes, but the Republican tax bill would let very popular lower and middle- class provisions expire that would cost 25 million Americans an average of $1,000 each. Under the Republican bill, 12 million families would see an end to the--a smaller child tax credit. Six million families would lose their earned income tax credit and 11 million families would lose their American opportunity tax credit. A little over 11 years ago, one-fourth of the Democratic caucus supported the bipartisan 2001 relief plan which is the foundation of the policy underlying the Hatch-McConnell bill. At that time, the Joint Committee on Taxation showed that the bill distributed an across-the- board tax cut which made the Tax Code more progressive. The 2003 bill was passed on a narrower bipartisan basis and extended on a broader bipartisan basis in 2004 and 2006--bipartisan. The Joint Committee on Taxation data showed that, against current law, the fiscal cliff my friends are threatening is, not surprisingly, basically the same as it was in 2001, 2003, and 2006. In other words, the Hatch-McConnell proposal provides across-the- board tax relief benefiting virtually every income tax payer, yielding a tax system that is more progressive than we would face if we went over the fiscal cliff. Let me repeat that. The Hatch-McConnell proposal provides across-the-board tax relief benefiting virtually every income tax payer, yielding a tax system that is more progressive than what we would face if we went over the fiscal cliff. The Joint Committee on Taxation analysis indicates a similar result today. To be sure, if you count continuous stimulus checks issued by the government to folks who do not pay income tax as tax cuts, the Democrats' proposal does more of that than the Hatch-McConnell proposal. There is no question about that. But when is it going to end? Is the upper 49 percent going to have to continue to carry everything in this country? Under Federal budget law, those continuous stimulus checks are counted in the main as spending. I would say to the colleague I referred to a moment ago that if the Democrats want to use that talking point--one at odds with conventional budget accounting--it is a free country. But if Democrats are going to make that strained and tortured charge, then they should also answer for the failure of their bill to patch the AMT for the year they claim to be delivering middle-income tax relief. Their plan exposes 28 million middle-income families to a stealth tax increase of over $3,500 per family. So while they claim that our bill raises taxes by cutting stimulus spending, they are mum on the massive tax increase on 28 million American families implicated in their own bill. I think we might have a case here of folks in glass houses throwing stones. Make no mistake, Taxmageddon is coming. The only good news is that Congress can prevent this historic tax increase from happening. As I mentioned, I have a bill I have introduced with Senator McConnell--S. 3413, the Tax Hike Prevention Act of 2012--which will prevent this historic tax increase and will pave the way for tax reform in 2013. That is where my focus will be until Taxmageddon is averted. I hope my colleagues will join me in preventing this looming tax increase from being imposed on the American people. Forty of my colleagues on the other side of the aisle voted to temporarily extend this tax relief in 2010, recognizing that we were in financial difficulty--we are in worse difficulty today--and they should do so again. At that time, President Obama said it would be foolish to raise taxes during an economic downturn, and he acted accordingly. I respect him for that. But he is not acting that way now. This is an election year. Our economy remains weak today. In fact, it is weaker in terms of growth in GDP than it was at the end of 2010, and incoming data clearly point to even more slowing in the economy as uncertainty from the fiscal cliff has begun to strangle hiring and investment. My friends on the other side have got to wake up to these facts. The only thing that appears to have changed is that President Obama has apparently chosen the path of class warfare and is pursuing a politics-driven tax agenda. I remember days in the past when my friends on the other side would rise up against even their own President when it came to good economics. I hope they will again, but it appears that it is not so today. My hope is my colleagues, who have supported this tax relief in the past, will put the President's shortsighted and self-interested partisanship aside and vote on behalf of their constituents in favor of S. 3413 to extend this tax relief to America's families and small businesses. For the sake of the more than 12.7 million unemployed Americans, my hope is that we act to prevent the President's campaign drive to malign small businesses and raise their taxes, and that it does not get in the way of sound tax policy and job creation. To put us through this for a difference of a little more than $50 billion between the two bills is amazing to me. That amounts to about 5 days of Federal spending. And to do this because the President wants it done? Sometimes it is good for this body to stand up and say, Mr. President, you are going too far. What have I proposed? I proposed that since it is even worse than 2010, when the President thought it was the wise thing to do in a fragile economy that we put over the 2001, 2003 tax cuts for 1 year--1 year--and that we strike out a new force in this Senate and in the House to do tax reform in that year on a bipartisan basis. I don't believe that is an unreasonable request, especially under the circumstances that we have seen with the potential of Taxmageddon. I actually believe it would be very wise on the part of all Senators to do exactly that. And wouldn't it be wonderful if we could work together for a change over the next year, knowing that year is devoted to tax reform. Madam President, I ask unanimous consent to have a letter dated July 25, 2012, from the Associated Builders and Contractors printed in the Record.

Mr. HATCH. Madam President, I yearn for the day when we can see both sides come together and work together--work together in the best interests of the country. We know this Presidential election is close. We know they are virtually in a tie right now. Let that play itself out, but let's do what is right here. Let's not hammer small business. Let's not have the biggest tax increase in history. Let's not put this country into a recession--and maybe even a depression. It was irresponsible, in my eyes, for any Democrat or any Republican to say that if you don't give us what we want, we are going to allow Thelma and Louise to go off the cliff. And we are Thelma and Louise in this situation. We can work together on an economic program that hopefully everybody in this body--or at least the vast majority--can support in a bipartisan way. I hope we can get through this. I am very concerned about our country and very concerned about the way these types of things are being brought up in this election year. I will make one last comment. The Senate is not being run like the Senate. We are not going according to the regular order. We are not going through the committees. It is pure politics. I expect a little bit of that, but I don't expect everything to be pure politics. When our side isn't even given a chance in many circumstances to bring up amendments in the greatest deliberative body in the world, you can see why there are some bad feelings around here. And it is all being done to protect some Members here rather than doing what is right for the economy and for our country. We have got to wake up and start doing things in a little better fashion around here. I hope we can. I hope my colleagues on the other side will accept my suggestion here. It is done in good faith. I believe we can dedicate next year to tax reform, and I believe we can get it done if we work together. I believe we can bring this country out of the morass it is in. And I suspect if my colleagues on the other side will support what I have suggested here today, the economy will start to turn around almost immediately. It seems to me it would be to their benefit in this Presidential election year, even though I don't trust what some have done in the past. Madam President, I yield the floor.

Mr. HATCH. I wish to thank my friend from California for her kindness and for her graciousness in allowing me this little bit of time to make final remarks with regard to this bill that Senator McConnell and I have filed. We are going to be taking two votes on a critical issue in a few moments. Action on the fiscal cliff is long overdue. Before we vote, I would like to make three points. First, it has been suggested that the Hatch-McConnell bill fails to extend the earned-income tax credit and child tax credit provisions. This is utterly false. The Hatch-McConnell bill extends these provisions as they were originally agreed to in 2001, and that agreement actually doubled the child tax credit. Democrats are complaining that our bill does not extend the stimulus provisions that expanded these provisions even further and made them more refundable. Democrats sold the stimulus bill as being ``timely, temporary, and targeted.'' Now they are holding up tax relief for nearly every income taxpayer unless these stimulus provisions that are mostly spending through the Tax Code are extended yet again. Second, the Democratic proposal includes a significant increase in the death tax. The number of death tax filers will increase under their bill by 11 times. This is what they are proposing: 98,300 new filers will now have to fill out estate tax forms, get appraisals, deals with the IRS, and get all this done within 9 months of the death of a loved one. That is the equivalent of one entire midsized American city being forced to deal with the death tax every year. Third, the Democratic bill is a massive tax increase on small business job creators. It would subject 53 percent of all flowthrough business income in the United States to higher taxes. There is a compromise here.

Mr. HATCH. I ask unanimous consent for an additional 30 seconds, with an equivalent time for the other side.

Mr. HATCH. There is a compromise here; it is the Hatch-McConnell bill. Our economy needs relief, businesses and families need certainty, and all we are proposing is extending current tax law for 1 more year so we can dedicate that year to do tax reform. By contrast, the Democratic bill offers nothing but more uncertainty and tax increases on job creators. Let's face it, we are talking about 940,000 small businesses that will be drastically affected by this. Many of those provide jobs in our society and will continue to do so if we do not clobber them with the Democratic approach.

Mr. HATCH

Mr. HATCH. Madam President, I call up amendment No. 2573 and ask for its immediate consideration.

Mr. HATCH. Madam President, I ask for the yeas and nays on the amendment.

Mr. HATCH

Mr. HATCH. Mr. President, I am pleased to cosponsor the Designer Anabolic Steroid Control Act of 2012, DASCA, introduced by Senator Whitehouse. The use of anabolic steroids or dietary supplements that contain designer steroids may trigger numerous adverse health effects, and thus Congress has passed legislation over the years to address these chemicals. The Drug Enforcement Agency, DEA, continues to investigate and uncover dietary supplement products that contain either controlled anabolic steroids or designer steroids that are structurally similar to testosterone. In the tin that it takes the DEA to administratively schedule an anabolic steroid used in a dietary supplement product, several new products can enter the market to take its place. Certain individuals have taken advantage of this lengthy DEA administrative process by continuing to create and market new derivative products by substituting and altering the testosterone molecule and then marketing them as ``dietary supplements.'' Very often, these new formulations have not been adequately tested. I worked in the previous Congress on legislation to address this issue and continued that work with Senator Whitehouse to develop a bill that would amend the Controlled Substances Act to expand the list of substances defined as anabolic steroids, and authorize the Attorney General to issue a temporary order adding a drug or substance to the list of anabolic steroids. The bill would also create new criminal and civil penalties for importing, manufacturing, or selling any product containing an anabolic steroid unless it bears a label clearly identifying the chemicals contained in the product. This bill is supported by American Herbal Products Association, AHPA, Natural Products Association, NPA, Council for Responsible Nutrition, CRN, United Natural Products Alliance, UNPA, Consumer Healthcare Products Association, CHPA, Alliance for Natural Health, ANH, and the U.S. Anti-Doping Agency, USADA.

Mr. HATCH

Mr. HATCH. Mr. President, I am pleased to cosponsor the Designer Anabolic Steroid Control Act of 2012, DASCA, introduced by Senator Whitehouse. The use of anabolic steroids or dietary supplements that contain designer steroids may trigger numerous adverse health effects, and thus Congress has passed legislation over the years to address these chemicals. The Drug Enforcement Agency, DEA, continues to investigate and uncover dietary supplement products that contain either controlled anabolic steroids or designer steroids that are structurally similar to testosterone. In the tin that it takes the DEA to administratively schedule an anabolic steroid used in a dietary supplement product, several new products can enter the market to take its place. Certain individuals have taken advantage of this lengthy DEA administrative process by continuing to create and market new derivative products by substituting and altering the testosterone molecule and then marketing them as ``dietary supplements.'' Very often, these new formulations have not been adequately tested. I worked in the previous Congress on legislation to address this issue and continued that work with Senator Whitehouse to develop a bill that would amend the Controlled Substances Act to expand the list of substances defined as anabolic steroids, and authorize the Attorney General to issue a temporary order adding a drug or substance to the list of anabolic steroids. The bill would also create new criminal and civil penalties for importing, manufacturing, or selling any product containing an anabolic steroid unless it bears a label clearly identifying the chemicals contained in the product. This bill is supported by American Herbal Products Association, AHPA, Natural Products Association, NPA, Council for Responsible Nutrition, CRN, United Natural Products Alliance, UNPA, Consumer Healthcare Products Association, CHPA, Alliance for Natural Health, ANH, and the U.S. Anti-Doping Agency, USADA.

Mr. HATCH

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

Mr. HATCH. Madam President, today we are debating a bill called the Bring Jobs Home Act. We live in serious times. We have a debt fast approaching $16 trillion, millions remain out of work, and economic and job growth has slowed to a crawl. Times such as these demand serious economic answers. So it is important that we all understand the utter lack of seriousness of this proposal. The only things serious about the Bring Jobs Home Act are its flaws. The Bring Jobs Home Act would deny the deduction for ordinary and necessary business expenses to the extent that such expenses were incurred for outsourcing; that is, to the extent an employer incurred costs in relocating a business unit from the United States to outside the United States, the employer would be disallowed a deduction for any of the business expenses associated with such outsourcing. The Bring Jobs Home Act would also create a new tax credit for insourcing; that is, if a company relocated a business unit from outside the United States to inside the United States, the business would be allowed a tax credit equal to 20 percent of the costs associated with such insourcing. On the surface, this proposal might sound reasonable. As sound bites go, the President's reelection campaign and the Senate Democratic leadership have apparently decided they can make some political hay with this proposal, but as substantive tax policy goes, this proposal is a joke. First of all, the amount of money involved is trifling. According to the nonpartisan Joint Committee on Taxation, this bill's deduction disallowance provision will only raise about $14 million per year. That is $14 million, not billion with a ``b,'' it is million with an ``m.'' Let's put that in perspective. This bill is supposedly a critical tax incentive to create jobs here in the United States. Yet, according to the Joint Committee on Taxation, a nonpartisan committee, it will only raise about $14 million per year in this multitrillion-dollar economy. Meanwhile, President Obama's campaign has now spent $24 million on ads attacking his opponent and attacking what he considers to be outsourcing, which his opponent has not done. The American people want us to address our fiscal situation and to create the conditions for robust economic and job growth. And how are the President and Senate Democrats spending their time? Advancing a proposal that raises less money in 1 year than the amount the President's campaign has spent attacking Republicans on this topic on television. If Democrats meant this as a serious revenue raiser for the government, we would all be better off if the Obama campaign had simply sent its $24 million to the Treasury Department for disbursement to insourcers rather than spend it on ads attacking American global businesses. And I think the President might get more credit for that. Simply put, this bill is misleading. Its supporters would have you believe that under current law there is some special deduction that exists for moving jobs outside of the United States of America. That is simply false. Rather, there has always been a deduction allowed for a business's ordinary and necessary expenses, and expenses associated with moving have always been regarded as deductible business expenses. So allowing a deduction for these expenses is not a special thing, it is the rule. Disallowing this deduction would be the exception, an extraordinary deviation from current tax policy. Yesterday I heard my friends from the other side say we need to end a tax deduction for jobs that a business sends overseas. I have a letter from the Joint Committee on Taxation, addressed to the bill's authors, that includes an analysis of their bill and a score. I ask unanimous consent to have a copy of the letter printed in the Record.

Mr. HATCH. Paragraph two of the letter says, and I quote: Under present law, there are no specific tax credits or disallowances of deductions solely for locating jobs in the United States or overseas. Deductions generally are allowed for all ordinary and necessary expenses paid or incurred by the taxpayer during the taxable year in carrying on any trade or business, which includes the relocation of business units. Now, perhaps my friends on the other side take issue with a description of tax policy from Congress's nonpartisan official scorekeeper. Well, if they do, I invite them--or the President, for that matter--to show me the provision of the Internal Revenue Code that contains a special deduction for shipping jobs overseas. Let me just mention that this is the Internal Revenue Code I have in my hand. It is getting so big you can hardly handle it. Maybe Joint Tax and I are wrong, so I will keep the Tax Code right at my desk, and if one of my friends wants to leaf through the Code and show me the section that provides a special deduction for shipping jobs overseas, I will stand corrected. They cannot. It is not in here, this huge conglomerated mess that we would like to reform, which will not be reformed until there is a change in administration. This administration is in the habit of pointing fingers every which way, blaming everyone but themselves for our weak economy and pathetic job growth. Just the other day the Treasury Secretary blamed Europe and rising oil prices for our economic slowdown. Yet he did not discuss the pall of uncertainty that Democratic politicians, including his boss, are putting over the economy with their refusal to extend the 2001 and 2003 tax relief unless they get their way on tax increases for small businesses. According to an analysis by the American Action Forum, the fiscal cliff facing American taxpayers is now twice the size of total GDP growth this year. If we drive over this fiscal cliff, as the President and Senate Democratic leadership are now threatening, the likelihood that small businesses will hire will decrease by 18 percent, and the effective marginal tax rate for many workers and small businesses will go over 50 percent. At least in part, and I would say in significant part, is the complete failure to provide certainty and progrowth tax policies to America's families and businesses that is dragging our economy down. Proposals such as the one before the Senate today are not helping either. They increase uncertainty for the businesses that will grow our economy and hire new workers. It is another example of the Obama administration's ``Washington- knows-best philosophy.'' Disallowing the business expense deduction means income will now be measured less accurately. Gross receipts minus business expenses equals income. That is what both accountants and economists tell us. But even through economists, accountants and businesses all measure income one way, Washington will now measure it another way. Not only is this bad for business, but by disallowing deductions for certain business expenses, this proposal would measure income less accurately. When the government's main source of revenue is income tax, it is rather important to measure income accurately. Ultimately, we know this bill is devoid of serious content because it is the product of political, not economic necessity. This bill is a sound bite, not sound tax policy. There really are not a lot of dots to connect. Really, the genesis of this bill's prioritization can be traced in a straight line from 1600 Pennsylvania Avenue to the President's reelection headquarters in Chicago. This bill is called the Bring Jobs Home Act, but its Democratic proponents have not presented any evidence of the number of jobs, if any, that will return to America if the proposal becomes law. During comments in support of the bill, the sponsor referred to a chart that said, ``[i]n the last decade, 2.4 million jobs were shipped overseas.'' But the sponsor tellingly did not say the bill will bring 2.4 million jobs back to America. The proponents of this bill have not even told us that jobs will return to America if this bill becomes law, much less how many jobs. The answer is probably none. That is exactly the sort of question we would have explored had this bill been produced by the Senate Finance Committee rather than by some campaign consultant in Chicago. The Senate Finance Committee would have held hearings, we would have talked to the experts, and we would have looked at comments on both sides of the issue. Then we would probably have had a markup. It could have been brought to the floor with full Finance Committee support--except we would never pass a bill such as this in the Finance Committee, in my eyes. Well, not with any real good intent. It is disappointing that even though the sponsor of this bill is a member of the Senate Finance Committee, the bill's sponsor chose to bypass that committee. This bill has come straight to the Senate floor without being vetted by the committee. Her colleagues on the committee would likely have had some valuable feedback for her. Both staffs on the committee would likely have had valuable expertise they could have brought to bear on this proposal. That is why I anticipate moving to commit this bill to the Senate Finance Committee. How does this bill fit with tax reform? Many on the other side say they want tax reform. I think it is fair to say there is a consensus that tax reform means getting rid of tax expenditures so as to decrease tax rates. The mantra is broaden the base and lower the rates, but this proposal would create new tax expenditures. It would narrow the base. Another major goal of tax reform is simplification, but this proposal would make the tax laws even more complicated. This proposal is the antithesis of true tax reform. Rather than coming up with more sticks to punish American businesses that compete globally, as this proposal does, we should be coming up with more carrots to encourage American businesses as well as foreign businesses to make America a more attractive place to expand, hire, and invest. Of course, the best way to do that, consistent with free-market principles, would be to lower the corporate tax rate. By creating new tax expenditures, as this act would do, it becomes all the more difficult to lower the corporate tax rate. If we want businesses to locate and hire in the United States, then we need to do what we can to make sure they are glad they are incorporated in the United States and that their headquarters is in the United States. As it stands right now, because of our worldwide tax regime, many global corporations have their parent company in the United States as a matter of historical accident. If they had to do it all over again, they very well might decide to incorporate elsewhere in the world. The way to address that, the way to make sure the United States is the place that global businesses want to incorporate is to transition our current worldwide system of taxation to a territorial tax system. A territorial tax system would only tax businesses on the profits they make in the United States. This way businesses would not be discouraged from incorporating in the United States. If a business incorporates in the United States, all of its worldwide profits are subject to U.S. tax. It is certainly true that a territorial tax regime must be done right and that the devil is in the details, but it is also clear that territorial tax regime proposals could lead to greater investment in the United States and more headquarters jobs in the United States. A territorial tax regime would put American businesses at a more competitive position when competing internationally. A territorial tax system would make us more consistent with major developed countries. So it is amazing that President Obama has decided to demagogue this issue as well, undermining the future jobs prospects of millions of Americans for years to come in order to secure his own job for another 4 years. Not content to grossly misrepresent the issue of outsourcing, he is now doing the same with territorial taxation; that is, in spite of the fact that his own agencies have been for it. And it's really quite strange. President Obama's Export Council, his Council on Jobs Competitiveness, his National commission on Fiscal Responsibility and Reform, and his Steering Committee on Advanced Manufacturing have all recommended that make the U.S. more competitive it shift to taking income on a territorial basis. For a person who claimed last week that he just cares so darn much about policy, he has an odd way of showing it when he campaigns. In the 2008 election, he fundamentally misled the American people about key aspects of the health care proposal put forward by my friend and colleague from Arizona, Senator McCain. In doing so, he kicked the legs out from a reasonable and growing consensus about how best to reform the Nation's health care system, and he did so only for his own political gain. His selfish acts on a territorial tax system have a similar flavor, and they promise to make tax reform much more difficult in the future. It is hard to see how this President could lead the country on tax reform. He attacks territorial tax regimes with a $4.5 trillion tax increase looming at the end of the year, essentially freezing job creation and economic growth. His allies in the Senate are debating this effectively useless bill on outsourcing. His administration called for the so-called Buffett tax, essentially creating a new alternative minimum tax that would provide trivial revenues and tax capital gains at higher rates than even President Carter wanted. Some say it would have given us maybe 8 days' of spending in Washington. After waiting years for a corporate tax reform proposal, this past February President Obama's administration put out a series of bullet points, the so-called framework for corporate tax reform--all fluff and no details. Tax reform is critical if we want our economy to grow and if we are going to get out of our current jobs deficit. But given this mediocre track record, I do not think the President can be relied upon to lead this Nation on this issue--not in 2012 and not in a second term either. To the extent the President's tax agenda is not attributable to politics, it can be blamed on his odd view of our economy and the businesses that grow it. I think it is fair to say the President's world view is fundamentally out of step with that of ordinary American taxpayers. Just the other day, while campaigning in Virginia, the President laid out his economic vision, channeling the economic know- how of Harvard Law's faculty lounge. He told the crowd, ``If you've got a business--you didn't build that, somebody else made that happen.'' As Charles Krauthammer put it, spoken by a man who never created or ran so much as a candy store. I do not want to demean candy stores, but that is a fact. The President made clear for all to see just what he thinks of all the hard-working, risk-taking entrepreneurs who sacrifice daily to build their businesses. His perception is that the hard work and sacrifice of those business owners and their families has nothing to do with their success. Any success they have is owing to good luck and big government, the fact that we have built some roads and so forth. My guess is that not only American business owners, but most Americans disagree fundamentally with this assessment. The President clearly does not understand or deliberately ignores economic incentives and the way they lead to business growth and job creation. This is certainly on display in the policy that will forever define this President, ObamaCare. Good intentions are not enough, and ObamaCare's small business tax credit is a case in point. This credit was designed to encourage small employers to offer health insurance. The promise was that over 4 million employers would claim $2 tax in credits to help pay for health insurance. In reality, only 309,000 taxpayers claimed the credit for a total of less than $466 million. Why was the credit such a failure at achieving its well-intentioned goal? Well, a picture is worth 1,000 words. So please look at this chart. Can you imagine what a business owner must think when they encounter an administrative nightmare like all of this? The ObamaCare tax credit for small businesses gives redtape a bad name. Talk about a bureaucratic straightjacket. No wonder the business community has failed to embrace ObamaCare. This issue of ObamaCare's manipulation of the Tax Code and its historic tax increases are deserving of extended remarks. For now, let me just say we should be pursuing laws that will help not harm businesses and middle-class taxpayers. The bill we are discussing on the floor today, like ObamaCare, is not going to help. I suggest the absence of a quorum.

Mr. HATCH

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

Mr. HATCH

Mr. HATCH. Mr. President, today I introduce the Preserving Work Requirements Act of 2012. Chairman Camp of the House Committee on Ways and Means will introduce a companion measure in the House. This bill halts last week's unprecedented power grab from the Obama administration, whereby unelected bureaucrats unilaterally granted themselves the authority to waive Federal welfare work requirements. To put this another way, unelected bureaucrats ignored the law passed by Congress, the elected representatives of the American people. They ignored the work requirements intended by Congress and by the Presidents of both parties who signed welfare reform and its subsequent reauthorizations. Ultimately, they decided they knew better than the American people. The American people, through their representatives, enacted work requirements in welfare reform. These unelected administrators decided they did not like these work requirements, so with the stroke of a pen, they have attempted to eliminate them. Not to put too fine a point on it, but this action is fundamentally illegitimate in a Democratic Republic and is just the latest example of President Obama's administration acting without legal warrant when the law stands in their way. The Camp-Hatch bill, introduced today, is cosponsored in the Senate by my friends and colleagues, Leader McConnell and Senators Grassley, Kyl, Crapo, Roberts, Enzi, Cornyn, Coburn, Thune, and Burr--valuable and distinguished members of the Senate Finance Committee. This bill includes dispositive findings clearly demonstrating that the Obama administration acted outside the scope of the law and the clear intent of Congress. I would like to stress the fact that I am introducing this legislation because I believe the Obama administration grossly undermined the constitutional authority of the legislative branch to effect changes and settle the law. It does not mean I believe the 1996 law is perfect in every way and cannot be improved upon. That could not be further from the truth. A case could be made that due to prolonged inaction the TANF Programs, the Temporary Assistance for Needy Families Programs, have withered on the vine, and now many States see TANF as a funding stream rather than a welfare program. An exception to this is my State of Utah. Utah runs a gold standard welfare program which focuses, like a laser, on work. By work, I mean real work, as in a paying job; work as most Americans define work, not work as defined in the ``Alice in Wonderland'' world of TANF, where running errands, smoking cessation, and bed rest count as work. Utah would like some relief--I think a lot of other States, in addition to Utah, would like some relief--from a number of administrative procedures in order to focus even more vigorously to moving welfare clients to jobs. This is a very reasonable proposition, especially if combined with a robust evaluation of the success of moving clients into work. I do not want the introduction of this legislation to prevent the Obama administration from bypassing Congress to imply that when Congress does take up the reauthorization of the TANF Programs, that I will not be open to giving States flexibility in exchange for results. The fact remains that this administration and the Democratically controlled Senate could have made welfare reform a priority for several years. They did not. For the administration to be arguing now that they need to give States flexibility under TANF rules is so urgent the need to bypass Congress right this very minute does not pass the laugh test. I am going to do everything I can to stop the administration from going forward with its waiver scheme. Then we should roll up our sleeves and take a good, honest look at how welfare reform has been working for the past 16 years. Domestic social policy is rarely permanently settled. Things change; people change. A law that is more than halfway through its second decade can most assuredly be updated and improved. That is why we have reauthorizations. I do not view the Preserving Work Requirements for Welfare Programs Act of 2012 as the end of the debate on how best to get families out of poverty. In fact, I see it as the beginning of what I hope will be a thoughtful and deliberative discussion of these critical issues. Finally, some in the press have attempted to characterize this debate, which at its heart is one of Executive overreach as a standoff between me and my own home State of Utah. As they say in the country, that dog just won't hunt. I have consistently supported State flexibility in exchange for measurable outcomes. One of the few pieces of domestic social policy legislation that has actually been enacted during this session of Congress, Public Law 112-34, was authored by Chairman Baucus and me to provide States with waivers to improve outcomes in their child welfare systems. Utah has applied for one of these child welfare waivers. As Casey Stengel said: You can look it up. I worked very hard back in the middle 1990s to get welfare reform passed. We required a work part of that. We said: We are going to help you folks. We are going to subsidize you, we are going to give you help financially, but at the end of a certain period of time, you better have a job. The work clauses of that bill have helped millions of people to get jobs and get the self-esteem that comes from working and supporting themselves. To have this administration unilaterally, and without any congressional authorization, modify that work requirement is just plain wrong. Frankly, I will be for flexibility in the work requirement, but I don't consider bed rest work. We can list 10 or 15 other things that the administration has been talking about that don't qualify for work either. This is an important issue. I hope the Congress will stand up for itself and let this administration know there is a limit to what we are going tolerate from an Executive order standpoint.

Mr. HATCH

Mr. HATCH. Mr. President, today I introduce the Preserving Work Requirements Act of 2012. Chairman Camp of the House Committee on Ways and Means will introduce a companion measure in the House. This bill halts last week's unprecedented power grab from the Obama administration, whereby unelected bureaucrats unilaterally granted themselves the authority to waive Federal welfare work requirements. To put this another way, unelected bureaucrats ignored the law passed by Congress, the elected representatives of the American people. They ignored the work requirements intended by Congress and by the Presidents of both parties who signed welfare reform and its subsequent reauthorizations. Ultimately, they decided they knew better than the American people. The American people, through their representatives, enacted work requirements in welfare reform. These unelected administrators decided they did not like these work requirements, so with the stroke of a pen, they have attempted to eliminate them. Not to put too fine a point on it, but this action is fundamentally illegitimate in a Democratic Republic and is just the latest example of President Obama's administration acting without legal warrant when the law stands in their way. The Camp-Hatch bill, introduced today, is cosponsored in the Senate by my friends and colleagues, Leader McConnell and Senators Grassley, Kyl, Crapo, Roberts, Enzi, Cornyn, Coburn, Thune, and Burr--valuable and distinguished members of the Senate Finance Committee. This bill includes dispositive findings clearly demonstrating that the Obama administration acted outside the scope of the law and the clear intent of Congress. I would like to stress the fact that I am introducing this legislation because I believe the Obama administration grossly undermined the constitutional authority of the legislative branch to effect changes and settle the law. It does not mean I believe the 1996 law is perfect in every way and cannot be improved upon. That could not be further from the truth. A case could be made that due to prolonged inaction the TANF Programs, the Temporary Assistance for Needy Families Programs, have withered on the vine, and now many States see TANF as a funding stream rather than a welfare program. An exception to this is my State of Utah. Utah runs a gold standard welfare program which focuses, like a laser, on work. By work, I mean real work, as in a paying job; work as most Americans define work, not work as defined in the ``Alice in Wonderland'' world of TANF, where running errands, smoking cessation, and bed rest count as work. Utah would like some relief--I think a lot of other States, in addition to Utah, would like some relief--from a number of administrative procedures in order to focus even more vigorously to moving welfare clients to jobs. This is a very reasonable proposition, especially if combined with a robust evaluation of the success of moving clients into work. I do not want the introduction of this legislation to prevent the Obama administration from bypassing Congress to imply that when Congress does take up the reauthorization of the TANF Programs, that I will not be open to giving States flexibility in exchange for results. The fact remains that this administration and the Democratically controlled Senate could have made welfare reform a priority for several years. They did not. For the administration to be arguing now that they need to give States flexibility under TANF rules is so urgent the need to bypass Congress right this very minute does not pass the laugh test. I am going to do everything I can to stop the administration from going forward with its waiver scheme. Then we should roll up our sleeves and take a good, honest look at how welfare reform has been working for the past 16 years. Domestic social policy is rarely permanently settled. Things change; people change. A law that is more than halfway through its second decade can most assuredly be updated and improved. That is why we have reauthorizations. I do not view the Preserving Work Requirements for Welfare Programs Act of 2012 as the end of the debate on how best to get families out of poverty. In fact, I see it as the beginning of what I hope will be a thoughtful and deliberative discussion of these critical issues. Finally, some in the press have attempted to characterize this debate, which at its heart is one of Executive overreach as a standoff between me and my own home State of Utah. As they say in the country, that dog just won't hunt. I have consistently supported State flexibility in exchange for measurable outcomes. One of the few pieces of domestic social policy legislation that has actually been enacted during this session of Congress, Public Law 112-34, was authored by Chairman Baucus and me to provide States with waivers to improve outcomes in their child welfare systems. Utah has applied for one of these child welfare waivers. As Casey Stengel said: You can look it up. I worked very hard back in the middle 1990s to get welfare reform passed. We required a work part of that. We said: We are going to help you folks. We are going to subsidize you, we are going to give you help financially, but at the end of a certain period of time, you better have a job. The work clauses of that bill have helped millions of people to get jobs and get the self-esteem that comes from working and supporting themselves. To have this administration unilaterally, and without any congressional authorization, modify that work requirement is just plain wrong. Frankly, I will be for flexibility in the work requirement, but I don't consider bed rest work. We can list 10 or 15 other things that the administration has been talking about that don't qualify for work either. This is an important issue. I hope the Congress will stand up for itself and let this administration know there is a limit to what we are going tolerate from an Executive order standpoint.

Mr. HATCH

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

Mr. HATCH. Madam President, the American people are struggling. Our economy is barely keeping its head above water. Millions of citizens remain out of work. President Obama has spent trillions in taxpayer dollars, and there is nothing to show for it. He talks about investments--investments in infrastructure, in roads, and in bridges-- while he has spent trillions. Where are the roads? Where are the bridges? Where is the new electrical grid? This reckless spending is a sin of commission. But the administration's sins of omission are perhaps worse. With businesses and families lacking any certainty at all about their tax rates next year, the President and his liberal allies have, nonetheless, steadfastly refused an extension of the 2001 and 2003 tax relief. Even worse, they are so committed to raising taxes on small businesses--the same small businesses that must be cultivated to get our economy and job growth moving again--that he and his Democratic allies in the Senate have put their feet down and are denying tax relief to anyone unless they get their way on tax increases. And make no mistake about it, increasing taxes is what they intend to do. They intend to do it so they can spend more. They live to raise taxes. It is almost as though their only source of pleasure is hiking taxes. Taking money out of the private sector and controlling it for their liberal agenda is like some power trip for the left. And do not fall for that red herring fiscal responsibility argument advanced by my friends on the other side. If you look at comparable policy between the Hatch-McConnell amendment and the Democratic leadership's position, they differ by about $41 billion for the policy for 2013. That $41 billion represents 1.1 percent of the spending proposed in the President's budget for 2013. The House budget, rejected by our friends on the other side, would reduce the deficit by restraining spending by $180 billion--more than four times the deficit reduction that would be achieved through the tax hikes insisted upon by the Democrats. But what does that tax increase mean in terms of harm to the economy? My friends on the other side of the aisle should consider this: Today, a study commissioned by the National Federation of Independent Business, the S Corporation Association, and the U.S. Chamber of Commerce confirmed again that the President's attempt to stick it to the rich is going to end up skewering small businesses and the families who work for them, or would like to work for them. This report, published by Ernst & Young--one of the great accounting firms in this country--and authored by Dr. Robert Carroll and Gerald Prante, found that if the President gets his way, the economy will be 1.3 percent smaller than it would be and there would be 710,000 fewer jobs. Study after study confirms that the President's policies prioritize spreading the wealth around over growing the economy and creating jobs. The Vice President spoke yesterday about the values of Republicans and the values of Democrats. Naturally, he spoke pejoratively about Republican values. I disagree with him, naturally, on his negative assessment, but I do agree that there is a clear distinction--a clear choice--between the values embraced by Republicans and Democrats. Republicans want to grow the economy and create jobs so that American families can thrive. However, to judge by their single-minded pursuit of tax increases, President Obama and his liberal allies appear to value a politics of class envy and wealth redistribution. Having Washington bureaucrats manage the economy in the name of wealth equalization is their first priority, regardless of any evidence that this tax policy undercuts economic growth and job creation. Unfortunately, the President's economic ethic is significantly hampering our economic recovery with disastrous consequences for America's families. Today, Ben Bernanke, the Chairman of the Federal Reserve, testified before the Senate Banking Committee. As the Senate's Democratic leadership and the President ignore the fiscal cliff, Chairman Bernanke's words are a somber reminder of what we face if we do not address the fiscal cliff. He testified that the recovery ``could be endangered by the confluence of tax increases and spending reductions that will take effect early next year if no legislative action is taken.'' He stated that the public uncertainty about the resolution of these issues is a negative drag on the economy, and he concluded that addressing this cliff ``earlier rather than later would help reduce uncertainty and boost household and business confidence.'' But instead of addressing these critical economic issues, the Senate spent another day voting on the same doomed piece of partisan legislation. Rather than take on the hard work of addressing the fiscal cliff that our economy is approaching, we spent precious time yesterday debating the DISCLOSE Act. For those who are not aware, this is a bill that had one purpose: to discourage political engagement by President Obama's opponents. It takes a pretty bad bill to unify the ACLU; that is, the American Civil Liberties Union, and the NRA against it. But the DISCLOSE Act has brought the lion and the lamb together against it. It is bad enough that we spent all of yesterday debating a bill that has no shot of becoming law. It is even worse that we devoted nearly an entire day today to debating the same bill again. In the meantime, the American people continue to suffer under this weak economy. And to defend their lack of action, the President and his allies have engaged in some revisionist fiscal history. I want to begin by correcting the record on this revisionist fiscal history. I will follow that with a discussion of the other side's insatiable appetite for taxes and spending. We have recently been debating whether we should adopt the President's policy to raise taxes on small business. We have also discussed the tax monster that is stalking the American people under the guise of ObamaCare. In both of these debates, we have heard a good deal of fictional accounting. These accounts share much with other stories we have heard from the other side over the past decade. You hear it from our friends in the majority whenever the Senate discusses spending or tax policy. I have noticed that the arguments boil down to two points. My friend and colleague, the former chairman and ranking member of the Senate Finance Committee, Senator Grassley, came up with this thumbnail description of this creative historical account: First, all of the so-called good fiscal history of the 1990s was derived from the partisan tax increases of 1993. That is their argument. And second, all of the supposedly bad fiscal history taking place within the past 10 years is to be blamed on the bipartisan tax relief plans originally enacted during the last administration and continued under the present administration. You could go one step further and, as a policy premise, refine that thumbnail description to two short sentences. First sentence: Lower taxes are bad. Second sentence: Higher taxes are good. Not surprisingly, these revisionist historians support higher taxes and higher government spending. Not surprisingly, the revisionists oppose cutting taxes and cutting government spending. I direct folks to the Senate floor remarks I made on Valentine's Day last year. It is important to reiterate the main point of those remarks. Our friends on the other side assert that raising taxes was the key to a growing economy in the 1990s, and raising taxes could work this magic again. A quick look at the data from the 1990s shows this assertion can be summarily dismissed. I have a chart. According to the Clinton administration's Office of Management and Budget or OMB, the impact of the much bragged about tax hike bill of 1993 was minimal. The Clinton administration OMB concluded that the 1993 tax increase accounted for only 13 percent--as you can see, the green bar on the circular chart--the 1993 tax increase accounted for only 13 percent of deficit reduction between 1990 and 2000. Thirteen percent puts the 1993 tax increase behind other factors, such as defense cuts, other revenue, and interest savings. The data clearly shows that tax increases did not drive the deficit reduction. As a matter of fact, only 13 percent of the positive fiscal history of the 1990s is due to the 1993 tax increase. That is it--13 percent. It is right here on the green part of the chart. Well, what about the last decade? The period of 2001 to 2010 saw a lot of deficits. From what you hear from our friends on the other side, those deficits are a direct result of the tax relief that benefited virtually every American taxpayer. Yet CBO data tells us a different story. On May 12, 2011, CBO released a recap of the changes over the last decade. At the start of 2001, as everyone agrees, CBO projected a surplus of $5.6 trillion. Over the decade, deficits of $6.2 trillion materialized. That is a swing of $11.8 trillion. What did CBO say were the causes? My friends on the other side might be surprised to learn that the answer is not primarily tax relief. Higher spending accounts for 44 percent of the change. Higher spending, no question about it. Let me repeat that. Higher spending was the biggest driver of the deficits of the last decade. Economic and technical changes in the estimates accounted for 28 percent of the change. So all tax relief, including the tax relief passed by Democratic Congresses and tax relief signed into law by President Obama, accounts for 28 percent. The tax relief legislation, much maligned by our friends on the other side, accounts for less than half of the fiscal change attributable to tax relief. Specifically, the bipartisan tax relief bills of 2001 and 2003, including the AMT patches in those bills, accounted for 13.7 percent of the fiscal change of the last decade. That is not Orrin Hatch speaking, it is the nonpartisan congressional scorekeeper, CBO. So how much of the bad fiscal history of the last decade is attributable to tax relief? Twenty-eight percent. That is it. That includes the tax cuts in partisan bills such as the stimulus. If you isolate the bipartisan bills that are the object of sharp criticism from our friends on the other side--the 2001 and 2003 tax cuts--you will find that those bills account for only 13.7 percent of the fiscal change in the last decade. Abnormally low levels of spending contributed significantly to the surpluses of the 1990s. Abnormally high spending drove the deficits of the past decade. Abnormally high spending is driving our current deficits, and it will drive our future deficits as well. To my friends on the other side, if we focus instead on hiking taxes way above their historic averages, we are misleading and mistreating the problem. The reason for our previous surpluses was low spending, and the reason for our current deficits is high spending. We cannot tax our way to fiscal health. I now turn to a second issue that demands a response. It has a corollary of the theme underlying the revisionist fiscal history I have discussed. It is the insatiable appetite for taxes and spending that we see from the President and my friends on the other side. Last week, President Obama once again called for tax increases in order to fund his so-called progressive vision of government. I am specifically speaking of the President's latest proclamation that the tax relief of 2001 and 2003--tax relief supported by the President and 40 Senate Democrats in 2010--should not be extended for people earning $250,000 or more a year. This was breathlessly reported in some quarters of the fourth estate as if it constituted news. In my opinion, the more proper and accurate response would be to borrow from President Ronald Reagan when he said ``there you go again'' to Jimmy Carter in a 1980 debate. Perhaps ironically President Reagan was responding to President Carter's comments on a national health insurance proposal. President Reagan was more right than even he knew. Getting back to taxes and the role of government, President Reagan was essentially making the same point this chart shows, which is liberal logic. No matter what problems face the left, the answer is always the same solution. Health care is too expensive; raise taxes. Spending is out of control; raise taxes. Gas prices are too high; raise taxes. Too many people are unemployed; raise taxes. It is a broken record. Again, no matter what problem faces the left, the answer is always the same. More taxes are always needed in order to increase the size and scope of the government in people's lives. The Supreme Court recently affirmed the point of this chart--the liberal solution to rising health care costs and lack of coverage were tax increases. The propensity of President Obama and his ideological allies to raise taxes is nothing new, and it is widely acknowledged as well. Back in August of 2008, David Leonhardt wrote a piece in the New York Times that quoted then-candidate Obama. It is titled ``Obamanomics,'' and here is what he said: If you talk to Warren, he'll tell you his preference is not to meddle in the economy at all--let the market work, however way it's going to work, and just tax the heck out of people at the end and just redistribute it. That way you're not impeding efficiency, and you're achieving equity on the back end. In order that people may peruse the whole story, I ask unanimous consent that the Internet Web address to Mr. Leonhardt's piece be printed in the Record.

Mr. HATCH. For those of us not invited to the local Dairy Queen for a Blizzard with the oracle of Omaha, the Warren cited in this quote is none other than Warren Buffet. He is a friend of mine--you know, the same Buffett from which the Buffett rule or Buffett tax is named. Setting aside the ridiculous notion that Americans are as oblivious to taxes as cattle are to the purposes of the slaughterhouse they are being led into, this quote very accurately illustrates the liberal attitude toward taxes, which is that they always need to go up. This chart illustrates government revenue as a percentage of GDP. Look at that. The purple line is total government. The red line is Federal Government. The green line is State and local government. When we combine them, we get the purple line, which is well over 25 percent for most of the time, from 1970 up to 2010. There are some fluctuations, but over the last 40 years, revenues have been roughly stable. We can see in the past 10 years a dip around the time the so-called Bush tax relief was enacted, followed by a rebound as the tax cuts promoted growth, followed by a dip in revenues as the recession set in. We can see that it came down around 2000, went up a little more, and then came down again. According to the CBO, as of June 5, 2012, Federal revenues averaged 17.9 percent of GDP over the past 40 years. The same CBO report--the 2012 long-term budget outlook--forecasts that under current law, Federal revenues will be 18.7 percent of GDP next year in 2013 and will be 23.7 percent of GDP in 2037. Somebody could say that current law is not realistic and some tax provisions that are scheduled to expire will likely be extended. To account for this, CBO has an alternative fiscal scenario which assumes the extension of certain tax policies through 2022. CBO assumes this would lead to the Federal revenues increasing to 18.5 percent of GDP in 2022, with that level being preserved going forward. We definitely know that President Obama doesn't support the assumptions that are part of CBO's alternative fiscal scenario because earlier this week he called for taxes to increase on hundreds of thousands of small businesses--almost 1 million small businesses and business owners. The question remains, Why do my friends on the other side think taxes always need to go up? The answer to this question is more complex than I am going to discuss right now, but part of the answer is that taxes need to go up in order to increase the size and scope of government in the lives of all Americans. Here is another chart that compares State and Federal Government revenues, which we have just examined, with total government spending. We will notice Federal Government spending is the purple line on the top most of the way through except where it intersects with the red line, which is total government revenue. All of a sudden total government revenue goes down, but total spending seems to go up between 2005 and 2010. We can see that over the past 40 years it looks like spending has been inclined to move up, but only in the past few years does it jump to unprecedented heights. Virtually every action taken by the Obama administration and Democratic Senate leadership has amounted to an increase in the size and scope of government. The continuing government takeover of health care is just the single most prominent example right now. On all fronts, President Obama's expansion of government is on the march, trampling whatever gets in its way. The chart behind me is a combination of Federal and State spending. If we are just talking about the Federal Government, in the CBO document I cited earlier, it is projected that debt will eventually reach 200 percent of our economy--that means of the GDP--that health care spending will rise to record levels, and that Medicare and Social Security are on a path to disaster. Getting back to the chart, the combined State and Federal spending and revenues--the purple line--what I find particularly striking is the large gap between the spending and revenue lines. Once again, as CBO has indicated, that gap is likely to increase to more than twice the size of our whole economy. We are already at 103 percent of GDP. If I recall correctly, Spain is a little more than half of that-- around 70 percent. Yet Spain is considered in real trouble in Europe. Once again, as CBO indicated, that gap is likely to increase to more than twice the size of our whole economy. Finally, here is a chart of Federal and State government spending as a percentage of GDP. Look at this. I apologize for being repetitive, but if there is one message that should be taken from my remarks today, it is one that I and others have been making a long time. That message is that the United States doesn't have a tax problem; it has a spending problem. We keep hearing that Republicans are too beholden to an antitax ideology, and that any resolution of our debt crisis will require that Republicans get with the program and acknowledge the need for increased taxes. As I have shown, this characterization of our fiscal and political problems is not close to half right. By far, the greatest cause of our fiscal shortcomings is increased spending. Our increasingly precarious fiscal situation did not arise from a dramatic decrease in taxes but, rather, is being caused by a dramatic increase in Federal spending. There is a continual effort underway to deny this reality but reality it remains. I have a chart that summarizes the latest tactic being used to convince people that exploding government spending is not the disaster it appears to be, and this is called the rich guy chart. As John Stossel has pointed out, people like free stuff. The problem with free stuff from the government is that nothing is free. To quote John Stossel, ``It's an Uncle Sam scam.'' Stossel was specifically discussing the ability of people to exploit a tax credit for electric vehicles in order to acquire golf carts, but the principle applies to any instance where the government supposedly provides something for nothing. This is where the cartoon of the rich guy behind me comes in. Goodies from the government are a lot less appealing when there is a pricetag involved, and many people would like to decide how they are going to spend their own money. The left's preferred solution to this little quandary is to have someone else foot the bill. For President Obama, that someone else is, in his words, ``the rich,'' which includes all these small businesses that are formed in subchapter S corporations and other passthrough entities, including partnerships, LLCs, and so forth--small businesses that are vital to our economic recovery. Unfortunately, that approach is just as realistic as the cartoon I am using to illustrate my point. While many of us may not while away our leisure time down at the club playing whist with monocled robber barons, a lot of us probably know of small businesses in our communities that employ us or our neighbors and provide goods and services that consumers want and our economy demands. When liberals are talking about this guy in the top hat with the monocle, they are talking about the hard-working small business owner. So when President Obama talks about increasing taxes on the rich, he is talking about increasing taxes on around 940,000 small business owners who are already in the top two tax brackets. A lot of people who would not pay the Obama tax increase work for someone who would be hit by it. What we have seen is that President Obama and his allies want to increase the size of government and, in part, they want to fund this expansion with higher taxes on so-called rich people. I want to conclude my remarks with a question. If we are getting more government, what are we getting less of? I am going to go back to the chart I displayed earlier of government spending as a percentage of GDP. This one right here. We can see government spending is going up, but what is going down as a result? What does the area on the top of that chart, which is diminishing, represent? This is a subject that lends itself to prolonged discussion, but for one answer we can get back to Mr. Leonhardt's piece in the New York Times. This is the same piece from August 24, 2008, and contains a quote from then-candidate Obama critiquing his friend Warren's argument. President Obama said: I do think that what the argument may miss is the sense of control that we want individuals to have in determining their own career paths, making their own life choices and so forth. And I also think you want to instill that sense of self- reliance and that what you do will help determine outcomes. Let me refer to the Obamanomics II chart. If candidate Obama was in the midst of an internal struggle over the appropriate role of government back in 2008, that struggle is over--self-reliance lost and taxing the heck out of people and redistribution won. It runs through the theme of his revisionist fiscal history, and it is the ethic underlying the insatiable appetite my friends on the other side have for taxes and spending. This, in and of itself, is not anything new for liberals and progressives. Once again, I will quote my friend Ronald Reagan in my response to the President's plan to tax the heck out of people in the name of redistribution: ``There you go again.'' I suggest the absence of a quorum.

Mr. HATCH

Mr. HATCH. Mr. President, today the Senate is taking more time to debate a bill that will have little consequence for the American people--all people, that is, but those who work in the White House on President Obama's reelection campaign. We are in our 41st straight month with unemployment above 8 percent, but the Senate is again taking up precious time--time that could be devoted toward creating jobs--to address legislation that is instead designed to create votes for the President's flagging reelection efforts. I would be outraged at this partisan display if it were not so pathetic, but in the end I think the American people will have enough outrage to spare. It is important for the American people to know what the Senate Democratic leadership considers pressing business. Today the world's greatest deliberative body, the Senate, takes up one of the most deliberately political pieces of legislation you will ever see. Meanwhile, my friends on the other side of the aisle are now saying that when faced with the choice of addressing the fiscal cliff we are facing at the end of this year by raising taxes on small businesses, they will take their stand with tax hikes. This is remarkable. Rather than stop the country from going over the fiscal cliff and preventing the expiration of the 2001 and 2003 tax relief, they are prepared to ``Thelma and Louise'' the American economy right off the cliff. This is an astonishing admission, but it is not surprising. We hear from the other side about Republican orthodoxy on tax relief, but we rarely hear them come clean about their own economic orthodoxy. Occasionally it emerges for all to see. On Friday in Virginia the President let his real views on economic matters slip. Here are his views on business owners. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you've got a business--you didn't build that. Somebody else made that happen. Well, the President is right that somebody did make that happen. The people who made it happen are called taxpayers. The President seems to think the Department of Transportation just made those roads and bridges happen, but that is not how it works. Nothing happens in this country--no roads, no bridges, no firefighters, no military, no public schools, no nothing--without taxpayers footing the bill. Much of that financing comes from the very small businesses on which President Obama was lecturing on Friday and on which he and his allies are desperate to raise taxes. Their economic philosophy appears to be that government is the engine of the economy when, in fact, the government ceases to exist without economic growth and the tax revenues that fund all of these investments the President wants to spend on. With this bizarre world view, it is not surprising that President Obama and Senate Democrats think it is more important to raise taxes on over 1 million small businesses than it is to prevent a recession and encourage job growth. If we do not address this fiscal cliff, taxes will go up by over $4.5 trillion over the next 10 years. The President's former Director of the Office of Management and Budget has suggested this might throw us into a recession. The Federal Reserve has suggested this dire outcome as well. But instead of dealing with it by extending the existing tax rates, the President and Senate allies are playing chicken with the economic recovery. They are playing games not only with the economy, but they are playing games with peoples' livelihoods. This is a disgrace. The American people understand that tax increases in the name of deficit reduction wind up being tax increases to fund larger government. That has been the history of my 36 years here, and the American people have the last say on this matter. A recent poll found that a majority of the American people want all the 2001 and 2003 tax policy extended-- all of it. Then we can undertake fundamental tax reform. Why can't we do that? What is the other side's objection? There is no real policy objection. The only real objection is that it diverts the President and his Democratic allies from their real pressing business, which is apparently getting the President reelected. Here we are debating another bill that will do nothing to create a job and nothing to get our economy moving again. The politically motivated bill du jour is the DISCLOSE Act. I oppose this legislation on policy grounds, but just as importantly, I oppose the majority's ongoing effort to convert the U.S. Senate into a vessel for President Obama's political campaign. The majority knows this legislation will not pass in the Senate, or at least they should know, given the fact this Chamber has already rejected this legislation. What is worse is that it appears that the majority does not even want this legislation to pass. What they want and what has become too common in the Senate these days is another dog-and-pony show--another opportunity to demonize the business community in service of the President's class warfare campaign theme. My friends on the other side of the aisle would have you believe the Supreme Court's Citizen United decision has paved the way for a corporate takeover of our election system, that corporations are spending untold millions to influence elections with no accountability. What they will not tell you is that increased spending by super PACs in this campaign cycle has nothing to do with Citizens United. While they are touting the benefits of increased disclosure, they conveniently leave out the fact that super PACs are already required to disclose their donors and that the Supreme Court in Citizens United no less actually upheld those disclosure requirements. Furthermore, and contrary to the majority's talking points, Citizens United has not led to a dramatic increase in corporate campaign spending. Yet the majority argues that the dangers of corporate campaign spending are ever present and, as a result, we need to know the names and addresses of individual donors to such campaigns. So with the dangers to democracy of corporate giving and the negative impact of Citizens United largely straw men, what is the purpose of our debating this bill today? Clearly, this effort is more about discouraging political speech than on transparency. It is just another effort on the part of the Obama administration and their congressional allies to intimidate those who disagree with the President's policies. Not able to defend these policies, it is critical that the President discourage those who would criticize them. We saw this last year when the President issued an Executive order that would, in effect, give the President the authority to deny government contracts to certain companies based on their donations or political engagement. Earlier this summer, the IRS requested confidential donor information from organizations applying for tax exempt status, information that is protected by Federal law--the confidentiality of which is protected by Federal law. This past June I was joined by a number of my colleagues in expressing our concerns about these questionable IRS practices, and we are still awaiting a response. Liberal advocacy organizations have publicly stated that they plan to use campaign disclosures to intimidate and embarrass those who have donated to opposing campaigns. As we have seen in several recent news reports, many political operatives have already done so. The DISCLOSE Act would make this type of political intimidation easier and more common. So given the other side's track record when it comes to ``transparency,'' I hope they excuse me if I am a bit skeptical when they claim this is about good government and not about punishing political opponents. If the majority wanted us to take them seriously in this effort, they would have at least included provisions that would apply the same type of standards to the labor unions who have, for decades now, bankrolled Democratic election campaigns on the local, State, and Federal levels-- and to the tune of billions of dollars, and they are the best political operatives in the business. It is no accident that the unions are far more likely than corporations to engage in the type of advocacy and political spending the majority is deriding in this debate. Yet while the language of the DISCLOSE Act ostensibly applies to union spending, the unions' bottom-up business model of funding their political activities would continue unabashed under this legislation without a single additional disclosure on the part of most unions. This can hardly be a coincidence. Mr. President, in Citizens United, the Supreme Court reaffirmed that money spent in the political process is protected by the first amendment. While this may be accompanied by spending and speech that some find objectionable, such is the natural byproduct of living in a country that has a first amendment. While colleagues are free to lament the results, they should not use this occasion as an opportunity to silence citizens who oppose their agenda and discourage their critics from speaking out. Because the DISCLOSE Act seems designed for that very purpose, I urge my colleagues to vote no on cloture. As much as I disagree with the decision of the Senate leadership to play political small ball when there are pressing fiscal issues facing this country, I appreciate their desire to shift the debate to politically expedient legislation. The fact is, from a policy perspective this administration has come up wanting again and again. Last week the President, when asked to evaluate the failings of his administration, claimed he had focused too much on policy. This is like a recent college graduate saying at a job interview that one of his biggest shortcomings is that he cares too much and sometimes works too hard. Give me a break. For all of the trillions in new spending and tax hikes, there is apparently nothing in the President's policy record worth defending. In fact, their modus operandi is to avoid any discussion of any policy at all, pretend the last 4 years did not happen, pretend the stimulus did not happen, pretend the efforts of cap and tax and union card check did not happen, pretend ObamaCare did not happen, and, instead, just smear the opponent. When the President said his administration needed to focus less on policy and more on storytelling, I guess this is what he had in mind: Rather than defend his own policies, he and his campaign surrogates would develop a storyline that smears their political opponent. That is all fine and good. As they say, life is about choices, but let's not sugarcoat this decision. It is an ugly one, and the President will have to live with it. Should the President be forced to defend his record, he would have a lot of explaining to do. Just last week we learned another doozy from his administration. In essence, by the stroke of a pen--and against the clear intent of bipartisan majorities of the American people, Congress, and the law itself--President Obama's administration has attempted to undo welfare reform, one of the signature bipartisan policy achievements of the last 20 years. Nearly 16 years ago, on August 22, 1996, after two vetoes, then- President Bill Clinton finally signed the Personal Responsibility and Work Opportunity Reconciliation Act--otherwise known as welfare reform. This landmark legislation, the product of the Republican-controlled Congress, ended the entitlement to welfare and replaced it with a block grant to the States. This block grant, known as the temporary assistance for needy families--or TANF--provided States with unprecedented control over welfare programs in exchange for meeting Federal work standards. Since enactment of welfare reform, welfare caseloads have dropped dramatically. Families receiving welfare have dropped by nearly 60 percent. People got jobs who were unemployed for years, and they gained self esteem from working. Welfare reform remains popular and is often cited as the most significant domestic policy accomplishment in decades. The core philosophy behind welfare reform is the emphasis on work and moving from dependency to self-sufficiency. Despite the popularity of welfare reform, programs created under TANF have languished. As more States were able to get credit toward the Federal work requirement based on the declining caseloads, TANF increasingly became less of a welfare-to-work program and more of a funding stream to prop up other social programs. In 2005, the nonpartisan Government Accountability Office reported that several States listed as part of their definition of a ``Federal work activity'' under TANF some of the following: One, bed rest; two, personal care activities; three, massage; four, exercise; five, journaling; six, motivational reading; seven, smoking cessation; eight, weight loss promotion; nine, participating in parent-teacher meetings; ten, helping a friend or relative with household tasks and errands. My gosh. The Deficit Reduction Act of 2005, which then-Senator Barack Obama opposed, attempted to refocus State efforts on getting individuals engaged in work and closing these work activity loopholes. The funding authority for TANF expired at the end of fiscal year 2010. The Obama administration has not proposed a comprehensive reauthorization of TANF, and TANF has continued under a series of stop- gap extensions. Late last week, the Obama administration quietly released ``guidance'' to the States, informing them that the administration had granted itself authority to waive work requirements in TANF, ``including definitions of work activities and engagement, specified limitations, verification procedures and the calculation of participation rates.'' In the 16 years since the creation of the TANF, no administration has concluded that they have the authority to waive TANF work requirements. The provision in the Social Security Act, section 1115, which allows certain waivers, does not cite the section of the law that includes the TANF work requirements. In an attempt to justify the waiver scheme, the Obama administration cites a reference in section 1115 to a provision dealing with a TANF State plan. Because the State plan section refers to the work requirements, according to the Obama administration, this allows them to waive TANF work requirements. Mr. President, if this sketchy logic is allowed to stand, a case could be made that there is virtually no domestic social program whose rules and protections cannot be waived. For example, since Medicaid is referred to in section 1115, and since the foster care programs are referred to in the Medicaid statute, a case could be made that under the administration's sketchy logic the protections for children in foster care could be waived. This executive overreach is a very serious matter with major long- range implications. The Obama administration, through this waiver scheme, is attempting to unilaterally disarm the legislative branch of the government and accomplish by executive fiat what they never even attempted to do through the regular legislative process. This administration has consistently demonstrated a flagrant disregard for the constitutionally mandated coequal branch known as the legislative branch. This is but the latest in a series of decisions that demonstrates the administration's sheer arrogance in attempting to bypass Congress without legal warrant. To be clear, disregard of Congress's power to make the laws under which we live is disregard for the American people. The essence of Republican governance is that the American people have a say in what the laws are. That say comes through their elected representatives, not some unelected bureaucrat putting out guidance that is in flat contradiction to the wishes of the people's representatives and the clear text of the law that is supposedly being enforced. Ours is a government of laws, not of men. With this action, the administration has shown that it will not let the constitutional prerogatives of Congress or the actual intent of the law stand in the way of their policy goals. We cannot let this stand. I, for one, have no intention of letting it stand. Let me just say when we did the temporary assistance for needy families bill, one of the most important provisions in that bill was the work activity provision. Because people had to go to work after a certain period of time--during which we gave them help, money, subsidization, and did all the necessary things to help them go to work--literally about 60 percent to two-thirds of those who had been on welfare, some for generations, went to work and gained self esteem by supporting themselves. I, for one, have no intention of letting it stand. I will shortly introduce legislation to halt this risky scheme and attempt to gut welfare reform. I urge colleagues to stand with me. Nothing less than the constitutional viability of the Congress is at stake. I can imagine if Senator Byrd, who was the majority leader for many years and became the principal rules person on the Senate floor for most of my service--if he were here today he would be having a fit over this type of arrogance by this administration or any other administration, Republican or Democrat. He would be standing for the rights of the Senate. I caution my colleagues on the other side that it is time for them to stand for the rights of the Senate and the House--this legislative body called the Congress. We have to quit this and quit relying on an out- of-control administration to do Executive orders that modify what is really legislation passed by this branch of government, which is supposedly coequal. I hope we will all fight. Our country will be better off if we do. I yield the floor.

Mr. HATCH

Mr. HATCH. Mr. President, I find it ironic that we are debating a bill called the Small Business Jobs and Tax Relief Act when that bill does absolutely nothing to address the death tax, one of the biggest threats to our small businesses in our country. Again, while Republicans are being accused of not wanting to move legislation to help grow the economy and develop jobs, it was interesting to read this morning that my Democratic friends still do not have any agreement among themselves on how to proceed on a number of tax issues--including the death tax. They need to get moving over there. Next year, unless Congress does something, the death tax will come roaring back at a much higher rate of 55 percent and a much lower exemption amount of $1 million next year, though those who promote the death tax characterize it as impacting only Daddy Warbucks, the Monopoly Man, and Montgomery Burns. The data does not bear out this cartoonish characterization. The death tax does not just hit those at higher income tax brackets; it has an effect well beyond small business owners and adversely impacts middle- class jobs and wages. Call it what you will, the estate tax or the death tax, but in the end it is a tax that is antismall business and antijob creation and antiwage increase. We are in the midst of another Senate floor show of pursuing legislation that will give the President and his allies campaign talking points but will do absolutely nothing to spur economic growth and job creation. Meanwhile, the Senate has failed to take action on estate tax reform. This is beyond irresponsible. I have been a long-time proponent of repealing the death tax. Not only is it double taxation and a deterrent to savings, but it also sucks up capital in the marketplace. To be clear, this is capital that could be used to hire more workers or expand small businesses or any business for that matter. This is a basic economic concept that seems lost on our current President, President Obama. During last year's deficit reduction talks, President Obama argued on behalf of tax increases saying: I do not want, and I will not accept a deal in which I am asked to do nothing, in fact, I'm able to keep hundreds of thousands of dollars in additional income that I don't need. Income that I don't need? This is a point that could only be made by a person with a very loose understanding of how business and entrepreneurs operate. The President seems to think this so-called excess income does no good. In fact, however, it will be invested or it would be invested in new business ventures, new hires, and better wages. If these entrepreneurs with all this excess income did nothing but put that money into a savings account, it would benefit individuals looking to buy a house, buy a car or start their own business, but the President does not seem to grasp this. So it is no surprise that he and his Democratic allies have done nothing to address this job-killing death tax increase looming on the horizon. The President claims he is interested in job creation. He certainly should be after last month's anemic jobs report. Well, he need look no further than death tax repeal. I know his liberal base might not appreciate it, but the rest of the country, which is less interested in class warfare talking points and more interested in getting the economy moving again, would embrace it. The death tax adds inefficiency to our economy. It is what economists refer to as deadweight loss. In other words, it creates another burden on our free market system and prevents the full potential of economic growth. For instance, many small businesses have to purchase insurance in order to prepare for paying the death tax so they do not end up having to sell the business just to pay the death tax. This added cost is embedded into the cost of goods when sold. In other words, American consumers, American workers, or Americans looking for work are those who will ultimately have to pay the death tax. Consider also that heirs are often forced to sell an asset of the business or the business itself in order to meet this arbitrary tax due date. These assets are likely generating revenue and could be a vital part of the business. But because the tax man cometh, small businesses are forced to sell these assets to pay the death tax. We ought to repeal the death tax, plain and simple. We actually don't get that much revenue from the death tax to justify its existence. It has been a pain in the neck from the beginning. In 2010 the death tax was temporarily repealed, but in a few months the law will take a sharp turn for the worse. Back in 2010 Senators Kyl and Lincoln offered a compromise that gained bipartisan support which eventually became law. Under title III of the Tax Relief Act--a law signed by President Obama--the death tax and the gift tax are unified with a $5 million exemption amount and a tax rate of 35 percent. Under current law, however, in 2013 we will once again have a 55-percent estate tax due within 9 months of death, and in some cases the tax will reach 60 percent. The exemption amount could be as low as $1 million. That is not right. How does it benefit our economy to have small businesses and farmers wondering whether they have to sell their business or literally sell the farm to pay for an uncertain amount of taxes? It creates an accounting and financial nightmare. The estate tax is not about making the Tax Code more progressive. The estate tax is not about more redistribution. It is not about deficit reduction. It is class warfare, and while it might stir up some votes, it has an outsized and detrimental impact on our economy. Many do not realize the enormous impact the death tax has on rural America. I am not only talking about farmers and ranchers; I am also talking about small family-owned businesses that generate economic growth in smaller towns--and even larger towns. If we do not address the death tax, some businesses with assets over $1 million could be susceptible to the death tax. I know for a small business $1 million in assets is a pretty low threshold. That is why I care about this death tax debate: because of real people, real Utahans, in real communities, who will be upended if this tax increase is allowed to go into effect. When we hear about the number of individuals impacted by the death tax, that statistic actually understates the sweep of this intrusion by the Federal Government. The estate tax return is filed by the representative of the deceased. That return does not take into account the dead person's family, employees, or neighbors. All of those folks are affected if the death tax burdens that particular family business or farm. There seems to be a strategy by the Democratic leadership to drag its feet in coming up with a resolution to this impending problem. What they fail to realize is this strategy is only adding to the cloud of uncertainty--economic uncertainty--over our country and over our economy. Will Congress keep the rates and exemption amounts the same? Will Congress increase them? What do I need to do as a small business owner to better prepare my business from withstanding a tax increase? These are the types of questions more and more small business owners and farmers are continuing to ask. The uncertainty these questions generate is holding back investment, job creation, and wage growth. Yet policies to promote economic growth have, unfortunately, taken a back seat to Presidential talking points that campaign advisers think will generate votes. Attack the rich. Promise more spending. As a candidate, President Obama promised in 2008 that Washington needed to spread the wealth around. That is one promise the President has kept. In spite of an economy that demands a focus on job creation, the President and his liberal allies have spent the last year coming up with even more intensive redistributionist schemes. Recently, the Joint Committee on Taxation released an estimate on how many more taxable estates, farming taxable estates, and small business taxable estates would be affected by the increase in the death tax over the next 10 years. The numbers are truly astonishing. If Congress does not act, we will see more than a 1,000-percent increase in the number of taxable estates, a 2,300-percent increase in the number of farming taxable estates, and a 1,000-percent increase in the number of small business taxable estates. The reach of the death tax is growing, and it is going to hit not just the so-called rich but current employees and, for that matter, entire communities. Let's take a look at the tax year of 2013. It arrives in a little over 7 months, by the way. Under current law, 46,700 estates will be taxable. If we extend the Lincoln-Kyl compromise, 3,600 estates would be taxable. Now, let me refer to the Joint Committee on Taxation estate tax data chart. It is the second column on the chart. When we think about it, under current law the path on which we seem to be slow- walking means more than 10 times the number of estates will be hit by the tax. The Lincoln-Kyl compromise means only the top 10 percent--the wealthiest estates--would be hit by the death tax. If we project out the 8 years of current law over 10 years, we will find that roughly 570,000 estates will be taxable over that period. Under the Lincoln-Kyl compromise, which is the current estate tax regime, roughly 41,000 estates would be taxable over that period. So 570,000 estates under the law that many Democrats would want or only 41,000 estates would be taxed under the Lincoln-Kyl compromise. In a recent interview with the Associated Press, Secretary of Agriculture Kathleen Merrigan described an epidemic of sorts that is hitting our farmlands across the United States. She did not talk about rising fuel prices or droughts. Instead, Secretary Merrigan discussed how our country's farmers and ranchers are getting older, and fewer young people are taking their places. I have heard time and time again that the death tax is the No. 1 reason family farms and businesses fail to pass down to the next generation. If Congress does not act soon, the Joint Committee on Taxation estimates that another 2,000 farming estates will be hit by the death tax next year. Keep in mind farmers sometimes carry debt. That would reduce the value of the farm, but on the other hand farmers have other farm-related assets such as combines and other equipment that are not included in the figures I cited. This data shows the failure to address the estate tax cliff will undermine many family farms. For those folks who are working this land, this is an unwelcome uncertainty. As I indicated earlier, the tax is an impediment to passing on the family business, in this case the family farm. A much higher death tax, apparently supported by many Members on the other side, will undermine many family farms and small businesses. Yet these family farms and small businesses form the economic backbone of their communities. Do we really want to send the signal that those who work hard, save, and want to pass something on to their families exist solely to fund bloated Federal programs? Why work hard? Why save? Why not work less? Instead, if the President is just going to spread the wealth around, it might just be easier to go into debt and live beyond one's means. There is something fundamentally unjust about the estate tax. Contrary to the claims of the President and his most liberal supporters, a person's wealth is the result of his or her labor. When one builds a business, one puts their sweat and ingenuity into it. To then be punished for this--to have it taken away at the moment of death by the Federal Government--is an assault on personal liberty and freedom. John Locke, the great philosopher, understood this. America's Founding Fathers understood this, and they would no doubt be appalled to know that behind the Grim Reaper now stands an IRS agent waiting to collect and deliver the government's share. But today's so-called liberals have abandoned this classical liberal philosophy--the philosophy of natural rights and liberties upon which our Nation was founded--in favor of a redistributionist philosophy that undermines rights and undermines our economy. Time is running out. We cannot continue this cycle of passing temporary tax relief and then waiting until the very last minute to decide what to do next. We owe it to family farms and small businesses to figure out a way to pass a permanent solution so each year businesses are not left wondering whether they will have to shut their doors in order to pay the death tax. Also, for those who love to raise taxes on small businesses, keep in mind these small businesses pay a lot of income tax each year into the Treasury's coffers. Do we want to kill the goose that is laying the golden eggs? If we are serious about providing true tax relief that will help small businesses grow, we can sit here and debate whether a bandaid will be the cure to our ailing economy, or we can begin the debate over how to prevent historic tax increases from hammering our small businesses and farms. I urge my friends in the Democratic leadership to put the death tax on the Senate's radar screen. I suggest the absence of a quorum.

Mr. HATCH. Should we go to the bill?

Mr. HATCH

Mr. HATCH. Mr. President, I yield back time. Cloture Motion