Orrin Hatch

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to announce the introduction of a bill that, if enacted, would empower the States to more wisely spend the $31 billion in unemployment funds that have been allocated to them for the remainder of this year. This bill will allow states to avoid job-killing unemployment tax hikes while strengthening the safety net program for unemployed workers. I am honored to introduce this legislation simultaneously with a bill being introduced today in the House by The Honorable Dave Camp, Chairman of the House Ways and Means Committee. The Jobs, Opportunity, Benefits and Services Act of 2011, or JOBS Act for short, is just that. A pro jobs bill that goes to the heart of what unemployment benefits are meant to be: not a permanent welfare payment, but a bridge to help unemployed workers until they can find a new job. A hand up, not a hand out. This bill is sorely needed. Since the recession began, 33 States have borrowed $48 billion in Federal funds to pay for unemployment benefits. These loans, if gone unpaid, will result in increased taxes on employers and job creators. Three States already have been forced to do so, and experts predict that 21 additional States will be required to raise taxes on jobs this year if nothing is done. The JOBS Act allows states the flexibility to manage their unemployment funds to pay benefits, reduce their borrowings, or establish programs to help unemployed workers get jobs. The States can decide for themselves where their greatest needs lie. Under current law, States don't have the flexibility they need to adapt. The Federal Government pays for up to 73 weeks of unemployment, an all-time record. But not every state needs to spend the money the way Washington dictates. For example, North Dakota has only a 3.6 percent rate of unemployment, but the unemployed can collect up to 34 weeks of unemployment paid for with Federal funds, in addition to the normal 26 weeks under pre-recession law. This bill would allow States to more wisely direct those Federal funds. How does the bill work? The $31 billion in Federal funds already allocated to the States will be advanced to them and will remain available for unemployment benefits or, if the State chooses, some or all can be used to repay their loans in order to avoid raising taxes, or enact programs that will lead to the rapid reemployment of unemployed workers. What this bill will not do is add any new Federal spending or reduce the amount of Federal funds a State is already scheduled to receive for unemployment insurance or mandate that States change the way they use those funds. It is up to the States to decide what is best for them and their citizens based on local conditions. This bill truly is a ``win, win'' for States, workers and the businesses struggling to expand and hire. I urge all my colleagues to support this legislation.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to announce the introduction of a bill that, if enacted, would empower the States to more wisely spend the $31 billion in unemployment funds that have been allocated to them for the remainder of this year. This bill will allow states to avoid job-killing unemployment tax hikes while strengthening the safety net program for unemployed workers. I am honored to introduce this legislation simultaneously with a bill being introduced today in the House by The Honorable Dave Camp, Chairman of the House Ways and Means Committee. The Jobs, Opportunity, Benefits and Services Act of 2011, or JOBS Act for short, is just that. A pro jobs bill that goes to the heart of what unemployment benefits are meant to be: not a permanent welfare payment, but a bridge to help unemployed workers until they can find a new job. A hand up, not a hand out. This bill is sorely needed. Since the recession began, 33 States have borrowed $48 billion in Federal funds to pay for unemployment benefits. These loans, if gone unpaid, will result in increased taxes on employers and job creators. Three States already have been forced to do so, and experts predict that 21 additional States will be required to raise taxes on jobs this year if nothing is done. The JOBS Act allows states the flexibility to manage their unemployment funds to pay benefits, reduce their borrowings, or establish programs to help unemployed workers get jobs. The States can decide for themselves where their greatest needs lie. Under current law, States don't have the flexibility they need to adapt. The Federal Government pays for up to 73 weeks of unemployment, an all-time record. But not every state needs to spend the money the way Washington dictates. For example, North Dakota has only a 3.6 percent rate of unemployment, but the unemployed can collect up to 34 weeks of unemployment paid for with Federal funds, in addition to the normal 26 weeks under pre-recession law. This bill would allow States to more wisely direct those Federal funds. How does the bill work? The $31 billion in Federal funds already allocated to the States will be advanced to them and will remain available for unemployment benefits or, if the State chooses, some or all can be used to repay their loans in order to avoid raising taxes, or enact programs that will lead to the rapid reemployment of unemployed workers. What this bill will not do is add any new Federal spending or reduce the amount of Federal funds a State is already scheduled to receive for unemployment insurance or mandate that States change the way they use those funds. It is up to the States to decide what is best for them and their citizens based on local conditions. This bill truly is a ``win, win'' for States, workers and the businesses struggling to expand and hire. I urge all my colleagues to support this legislation.

Mr. HATCH

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

Mr. HATCH. Mr. President, you may not know it from the weather in Washington, but spring has finally arrived. Even though it is cold and rainy outside, there is no mistaking the change of seasons in Washington. Every spring, the congressional office buildings are busy with people who want to visit their representatives. I look forward to many of these visits. I look forward to seeing families who have traveled all the way from Utah to see for themselves and to show their children the Capitol, the White House, the Declaration of Independence, and the monuments to many of our Nation's greatest heroes. But we truly know it is spring in Washington because the Halls of Congress are filled with people here for one purpose; that is, to ask for more money. When budget season hits, interest groups descend on the Capitol with one-track minds. Like the swallows to Capistrano, they return to the same spot each year to ask for more dough. The message is always the same: Their issue or their program is always critical, always essential. Liberals like to beat up on businesses and demand their shared sacrifice. Translation: You better pony up. But the interest groups that thrive on taxpayer dollars always seem to be exempt from this required sacrifice. Somehow I don't think this is what the Founders had in mind when they guaranteed individuals the right to petition the government. Petitioning the government for more cash is somehow less inspiring than petitioning the government for redress of grievances. I appreciate the sentiments of a new Member of the House of Representatives who hung a banner in his office that read: If you are here to ask for money, you are in the wrong place. The fact is, Washington has an enormous spending problem. Washington is addicted to spending. The first step toward recovery is acknowledging that you have a problem. I suppose we can take some solace in the fact that few persons in a position of responsibility now deny that our deficits and debt are a problem. Facts have gotten in the way. This morning, the Financial Times had an above-the-fold headline that read: ``U.S. Lacks Credibility On Debt, IMF Says.'' No kidding. Our total debt is now over $14 trillion, with no end in sight. The administration is now asking the Finance Committee and Congress to raise the debt ceiling by $2.2 trillion just to get this country through next year. The President's first two budgets were a tragedy. But when the United States was staring down the barrel of a third straight $1 trillion-plus deficit, his fiscal year 2012 budget morphed into parody. Recognizing the shellacking his party took over the issue of big spending, the White House had to talk a big game about deficit reduction, but their numbers never added up. This is how the Washington Post described the impact of the President's budget: After next year, the deficit will begin to fall ``settling around $600 billion a year through 2018, when it would once again begin to climb as the growing number of retirees tapped into Social Security and Medicare.'' Americans quickly saw this budget for what it was--business as usual, spending as usual. Today, the President tried a do-over. He was going to give a big speech. That seems to be his go-to move. This time, he was going to convince Americans that he is very serious about deficit reduction. Unfortunately, he bricked this shot as well. We are approaching a debt crisis, but the President seems willing to run the clock until the next election. This is a very dangerous game. I think we need to be clear about how precarious our Nation's fiscal situation is. The fact is, we could be closer to a debt crisis than even the most pessimistic accounts. Because of this administration's dramatic ramp-up in Federal spending, Americans are deep in Federal debt. Currently, Federal debt held by the public equals a modern record of about 69 percent of the Nation's economy--known as the gross domestic product. The Congressional Budget Office reports that current tax-and- spending law takes that figure to 76 percent of GDP over the next 10 years. To put that number in perspective, consider the following statistic: At the end of fiscal year 2008, as the George W. Bush administration was winding down, the debt held by the public reached about 41 percent. That is less than 2\1/2\ years ago, in contrast with 69 percent of the debt. As bad as the 76-percent figure is, it gets worse under the President's fiscal policies. President Obama's third budget was released on Valentines Day this year. If Americans were expecting some love and concern from our President, they sure didn't get it. The administration's figures claimed that the President's budget would raise debt held by the public to 87 percent of GDP. That is the administration's figures. I have a chart that shows the growth in the debt--the national debt as a percentage of GDP. The current policy happens to be the red, the Obama 2012 budget is the blue. As you can see, by 2021, the national debt will be 76 percent of our GDP. On Friday, March 18, 2011, CBO released its estimates of the President's budget. These estimates showed that debt held by the public would grow to 87 percent of GDP in 10 years, just like it says on the far right of the chart. That alarming figure is there on the chart. Let me put this another way. According to the Congressional Budget Office, if we continue current tax policy, don't raise rates, fix the AMT, provide estate tax relief, and provide for a fix to the physician payment system or the SGR as it is known--policies supported by a clear majority of Americans--by 2021, the debt held by the public will reach 97 percent of GDP. For those watching C-SPAN, whose jaws just hit the floor, I hate to tell you, but the news might even be worse. As bad as these numbers are--and they are very bad--they could be dramatically understating the fiscal consequences of our current deficit spending policy. This is because we face a hidden potential for even greater levels of additional Federal debt. We may be in the middle of a debt bubble. The stated current level of debt may grow astronomically without any policy changes. Let me say that again. If we do nothing to our current policy and continue to spend, the debt we currently hold may prove disastrous. Here is what I mean by a bubble. I will use an example we are all too familiar with. An economic bubble can be described as significant trade volume in different products or assets with inflated values. Interest rates affect everything in our economy, from the monthly payments we make on a new car or home to the amount we are able to save at a local bank. Interest rates during both the dot-com bubble and the housing bubble were driven by policies at the Federal Reserve. During 2001, the Federal Reserve lowered the Federal funds rate from 6.25 percent to 1.75 percent. The Fed further reduced the rate in 2002 and 2003--there is the Federal funds rate--to around 1 percent. These low rates had a substantial effect on the growth of mortgage lending between 2001 and 2004. The share of new mortgages with adjustable rates, which was around 20 percent in 2001, was more than 40 percent by 2004--adjustable rate mortgages. Currently, just like at the beginning of the last decade, interest rates are very low. Ten-year Treasury rates are currently around 3.5 percent. During the past 2 years, this administration has spent recklessly, raising the total debt from $10.6 trillion to over $14.2 trillion. We are currently spending 40 cents of every $1 on interest, paying China and others who hold our debt. But what will happen when interest rates rise? Under projections from the CBO, 10-year Treasury note rates are expected to rise from current levels to 5.3 percent in 2016. What happens if interest rates rise to levels seen during the 1980s or the 1990s? During the 1980s, rates on 3-month Treasury bills and 10- year notes rose to over 8 percent and 10 percent, respectively. During the 1990s, rates on 3-month and 10-year notes rose to 5 percent and 6.6 percent, respectively. Exactly like the housing bubble, as a nation, we are falling into a national debt bubble. We continue to spend on our national credit card while interest rates are low. Just as many purchased homes with adjustable rate mortgages, eventually the adjustment kicked in, the low-rate bubble popped, and many Americans found themselves facing higher mortgage payments that were unaffordable. We are exposing ourselves to more debt than we should. The cost of that decision is severely understated. That cost, as laid out by CBO, could be astronomical. Under President Obama's 2012 current budget, the CBO projects deficits for each of the next 10 years, resulting in an estimated $10 trillion being added to the public debt, a 100-percent increase. Under the scenario where interest rates rise to the historical average of the 1990s, the public debt is projected to grow an additional $8 trillion or a 77-percent increase. Under the scenario where interest rates rise to the historical average of the 1980s, the public debt would grow to $12.1 trillion, doubling in size. It is right here on this chart. You can see it. This is a chart showing the public debt over the next 10 years, from 2011 to 2021. You can see the green on the far right of each column is the 1980s interest rate, the blue in the middle of each column is the 1990s interest rate, and the red happens to be the current baseline estimates, which almost everybody who looks at it seriously would say are too low. If the interest rates return to the levels of the 1990s without any policy changes, the debt, as you can see, grows significantly, according to this chart. If we return to the 1980s interest rates, we will hit a 116-percent increase. If interest rates return to the 1980 levels, boy, are we in trouble. Those who argue against spending restraints now are akin to the bubble inflators of the housing industry, encouraging more and more spending and consumption, never considering what will happen when the rates adjust. This is why it is urgent, I would say imperative, that we cut spending now. Not after the next Presidential election. Not next year. Not next month. Immediately. We cannot afford either the short or the long term effects of this dangerous spending addiction. American taxpayers understand what Washington has to do. It is time to cut the national credit card and stop this reckless spending. Unfortunately, my colleagues on the other side of the aisle, and their liberal progressive base, keep urging for more taxes. I don't get this. I don't think Americans have been sitting at home thinking: You know what this debate over government spending has been missing? A proposal for a giant tax increase. But to borrow from Bruce Dickinson, Democrats have a fever. And the only prescription is more taxation. When it comes to dealing with our budget deficits and our exploding debt, Democrats have a one-track mind. They claim that they are serious about spending. The White House is touting reforms to Medicare and Medicaid to get spending under control. But ObamaCare is not Medicare reform. And real Medicare reform will entail repealing ObamaCare. The health care bill took a half a trillion dollars out of Medicare to finance $2.6 trillion in new government spending. And instead of taking responsibility to ensure the long-term viability of Medicare, the President did what he seems to do best. He punted decisionmaking to a board of unelected bureaucrats. ObamaCare is not Medicaid reform either. States are already facing a crushing collective deficit of $175 billion. But instead of helping the States to lift this burden, the President's health care bill larded on a $118 billion Medicaid expansion on the States. That is about $300 billion. The White House has circulated a factsheet on the President's attempt at deficit reduction. It claims $340 billion in savings over 10 years-- ``an amount sufficient to fully pay to reform the Medicare Sustainable Growth Rate, SGR, physician payment formula while still reducing the deficit.'' However, the President's budget estimated the cost of a 10- year doc fix at $380 billion. Assuming Congress utilizes the President's proposed savings to fund a doc fix, the net deficit increase from the White House's health proposals will be at least $40 billion. With due respect, when the Medicare hospital insurance trust fund, which our seniors depend on, is scheduled to be insolvent in 9 short years, that is totally inadequate. So what are we really looking at in this vaunted deficit reduction plan? Yesterday, in anticipation of the President's remarks on deficit reduction, his spokesperson gave it away when he said, ``[t]he president believes there has to be a balanced approach.'' Translation: You better check your wallet. The Wall Street Journal said that tax increases are on the table. But Americans know that for Democrats tax increases are never off the table. Most Americans understand that they are the centerpiece of Democratic policy. America was waiting for the President to propose something new today. Instead, he dusted off his proposal to end the 2001 and 2003 tax cuts for households and businesses earning over $250,000 a year. Citizens wanted something innovative--maybe a little hope and change for a change. But instead they got the fiscal policy of Walter Mondale and Michael Dukakis. Under the President's proposed failsafe for deficit reduction, taxpayers who use their own dollars to deduct mortgage interest, make contributions to charities, save for education, or save in a pension plan, will be treated the same as spending for Nevada's Cowboy Poetry Festival. To me they are not the same. But to the President they are. David Plouffe, the President's senior adviser and former campaign manager, had this to say about the President's proposal: People like him . . . who've been very fortunate in life, have the ability to pay a little bit more. Well, that's big of him. We hear this quite a bit from rich Democrats: Please tax us more, they say. Well, as the ranking member on the Senate Finance Committee, I feel obligated to inform Mr. Plouffe that the President, and all of those rich liberal Democrats who are eager to pay higher taxes, can do just that. They can write a check to the IRS and make an extra payment on their tax returns to pay down the Federal debt. The option is right there at the bottom of their tax return. America awaits these checks. This might be a good talking point. I am sure it has polled well. But I have yet to hear the economic or fiscal rationale for raising taxes on small business creators and American families. It is certainly not deficit reduction. Raising taxes might be politically necessary for Democrats. But it will do little to reduce the deficits and debt that are at their root spending problems. An article from the Tax Policy Center shows just how delusional it is to try and balance the budget through tax increases. In an article titled, ``Desperately Seeking Revenue,'' the authors laid out what types of tax increases would be necessary, absent spending changes, to reduce Federal deficits to 2 percent of GDP for the 2015 to 2019 period. This is a remarkable article. Its authors concluded that tax increases consistent with the President's campaign pledge not to raise taxes on individuals making less than $200,000 or families making less than $250,000 would require the top two rates to go from 33 percent to 85.7 percent and 35 percent to 90.9 percent. This article makes clear, yet again, that we have a spending problem, not a revenue problem. We are not going to make meaningful deficit reduction--we are not going to get the debt under control--by taxing the so-called rich. Taxing citizens and businesses more is not going to fix what is essentially a spending problem. Consider this chart. The top red line is the CBO baseline, the middle blue line is the President's budget plans. The bottom orange line is to extend the 2001 and 2003 tax cuts and index the AMT, the Alternative Minimum Tax. You can see here that under the President's budget plans, under the CBO baseline, and under the Republican position, individual income tax revenues as a percentage of GDP are going up. Tax revenues are already going up, and they are not getting us where we need to be as a nation. Yet in his remarks today, the President's landmark proposal is little more than tax increases. I suppose we shouldn't be surprised. When the Drudge report announced yesterday that the President was going to recommend tax increases, it did not even merit a flashing red light. Drudge just pushed it to the side, because it is really no longer news to anyone that Democrats want to raise taxes. The real news would have been if the President stood up to his political base and made meaningful recommendations for entitlement reform. The people of Utah, and taxpayers around the country, would have stood up and listened if the President backed a serious rollback of domestic non-defense discretionary spending, which has exploded on his watch. Instead, they got the economic philosophy of President Carter. Maybe that statement isn't fair to President Carter. I don't know. It seems like it has all the elements of fairness. Ultimately, this spending crisis cannot be ignored, and both voters and markets will respond to the leaders who take this issue on in a serious way. One of the problems with our colleagues on the other side and their wonderful desire to increase taxes on everybody is that those tax increases would not go toward paying down the deficit. They would go for more spending. That has been the case for all my 34 years in the Senate. Every time we have raised taxes, over the long run it has not gone toward bringing down the deficit. It has gone for more spending. We Members of Congress have all kinds of ways of spending money, and our Father in Heaven knows we get a lot more credit for spending in this country up through the years than we do for conserving. On the other hand, I don't think there is much credit coming today. I think most everybody in America, including all those Democratic millionaires who supported the President last time--maybe not all of them but a good percentage of them--are saying: Enough is enough. I am hoping the President will give a speech someday that will make a difference on spending because that is clearly the problem. It is not tax revenues, it is spending. I think we have had enough of that. I think the American people, whether they be Democrats or Republicans, have had enough of that. Even though we wish we could do more, we wish we could help more people, we wish we could provide a new car for everybody in America, I am sure, but that is not reality. It is time to face up to reality and get this government spending under control. I suggest the absence of a quorum.

Mr. HATCH

Mr. HATCH. I second my chairman.

Mr. HATCH

Mr. HATCH. Madam President, I thank my colleague. Sometimes it amazes me how quickly debates change here in Washington. At this time in 2009, President Obama was riding high. Heralded as the second coming of Franklin Roosevelt, the conventional wisdom was that his election represented a sea change in the attitudes of American taxpayers. Where his Democratic predecessor came to Congress and announced that the era of big government was over, President Obama came to Washington convinced that the era of big government was just beginning. With historic majorities in both Houses of Congress, he and his Capitol Hill allies set about the business of transforming the Nation's economy with massive jolts of new government spending and regulation. They cultivated an unholy alliance of big labor, big business, and big government, and the hoped-for result was a corporatist state where government bureaucrats would calculate the fair share that business would contribute to finance the administration's redistributionist policies. They exploded the growth of the Federal Government through ordinary appropriations and the stimulus. Democrats hiked up nondefense discretionary appropriations by 24 percent over the last 2 years and by 84 percent if you count the stimulus bill. But, as an American songwriter once put it, the times they are a- changing. Later this week, we will be considering the continuing resolution that gets us to the end of fiscal year 2011. To hear the left talk, one would think this proposal was shutting down agencies left and right. They say we have cut discretionary spending to the bone. This, of course, is a little bit melodramatic. Before the Republicans won in November, the Federal Government was on pace to spend $3.8 trillion. That is $3,800 billion. The continuing resolution we will vote on reduces spending by $38 billion. And $38 billion in spending reductions from spending of $3,800 billion or $3.8 trillion--whichever you like-- is not exactly cutting to the bone. I agree with my colleagues who say we need to reduce spending by even more. Facing our third consecutive year with more than a $1 trillion projected deficit, these cuts barely scratch the surface of what needs to be done. But make no mistake about it--even these cuts would have been impossible if not for the Republicans taking back the House and making gains in the Senate last November. When Republicans won, they changed the debate in Washington. Even the press has been forced to acknowledge the depth of our fiscal crisis, though old habits die hard. Just this morning, we witnessed a relapse in the mainstream media as it did its best to enable excessive spending. The headline on the front page of today's Washington Post screamed ``Cuts Will Affect Vast Spectrum of Priorities.'' This made me think of the old joke about the likely reporting at the New York Times on the outbreak of a nuclear conflict: ``Nuclear War Breaks Out: Women and Minorities Hardest Hit.'' But I should not be too hard on the press. They seem to be getting it. There is certainly no denying it. We are spending way more than we are taking in, and, absent real reductions in spending and meaningful reforms to entitlements, this country is cruising toward a legitimate debt crisis that will adversely impact every American family. This desire to reduce spending and restore the Constitution's limits on the size of government is the new normal for taxpayers. The Obama administration's salad days when they dreamed of permanently expanding the size of the Federal Government are way back in the rearview mirror. Because of the undeniable seriousness of our debt and deficits and the commitment of Republicans to taking it on, the debate has shifted from how do we enlarge the size of government to how can we scale it back. The administration was slow to recognize this. When given his first opportunity to weigh in on this crisis, the President voted ``present.'' His fiscal year 2012 budget was laughable for its failure to take on our deficits and growing debt. Even Ezra Klein, the liberal Washington Post reporter, could not carry the President's water on this one. Even he couldn't carry the President's water on this one. He wrote that when reading the budget, it is almost like the fiscal commission never happened. The President's fiscal commission recommended over $4 trillion in spending reductions, including adjustments to entitlements. I can't say I agree with everything in the commission's proposal, but it was a serious effort to get our Nation's finances back in order. But the President chose to pretend this report did not exist. Well, since then, they must have done some polling over at the White House. They must have realized that on the most critical issue facing the country, American taxpayers and American families want something more from their President--they want leadership. The President of the United States can't just subcontract out these issues to other people. The President of the United States has to lead, and in these areas it takes the President. He has to be bold. He has to take a stand. For all of the elegiac comparisons of President Obama to Abraham Lincoln, Franklin Roosevelt, and Ronald Reagan, those were not passive Presidents. On the big issues, they took big risks and they led the country. It seems as though the President's advisers have finally figured this out. They need to get involved in a serious way on the issue of Federal spending. Sitting back and adding nothing, while your allies demagogue reasonable solutions to pressing problems, is simply not acceptable to the American people. Democrats tried this tired line of attack last week, alleging that Republicans were out to hurt the poor, the disabled, and the elderly. These smears really are beneath the dignity of our elected officials, and they show a total disregard for the common sense of American citizens and the good faith and charity of those who support Republicans. A good first step for the President would be to disavow these statements. He has a chance to do so tomorrow. The President is giving a much-hyped speech tomorrow on the issue of spending and getting our deficits and debt under control. I can only say I hope he comes through. The people of my home State of Utah and the people of every State are demanding that Washington tackle out-of- control spending. Vague outlines or statements of principle are not going to do it. The President needs to take a stand, or should I say stance. I would add that the American people don't want solutions to a spending crisis that involve higher taxes. The solution to a spending crisis is not higher taxes that will give the government more money to spend. Our problem is not that citizens are taxed too little; our problem is that government spends too much. So the President needs to come forward with serious, concrete proposals and commit to working with Congressman Ryan, Speaker Boehner, and Senate Republicans to solve this problem. I am willing to give the President a mulligan on his first budget proposal. The President, like Members of Congress, represents the people. As representatives of the people, we must acknowledge those times when we get it wrong. When the people make it clear that they want their elected officials to go in a different direction, in a democratic republic it is only right that the President and the Congress give voice to those concerns. The President seems to understand that he got it wrong with this first budget. Taxpayers and families want Washington to take on spending, but the people will not be fooled. If the President comes out tomorrow and speaks in vague generalities, if he comes out and simply defers to Congress, he will have satisfied no one. Being the President of the United States is not like being a law professor. Your job is not merely to facilitate dialog. Your job is to lead. I look forward to the President's remarks tomorrow. I guess we could call it the President's budget, part deux. My hope is that the sequel will be better than the original. With that, Madam President, I suggest the absence of a quorum.

Mr. HATCH

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

Mr. HATCH. Madam President, earlier today the House of Representatives passed H.R. 1363, a 1 week continuing resolution that will pay our troops and keep the government running. It is a pretty sad commentary on the willingness of the White House-- and my colleagues on the other side of the aisle--to get serious about spending, that we have even arrived at this point. We need to be clear about a few things in this debate. First, we are here because Democrats did not do their job last year. Among the most basic responsibilities of Congress--in fact its core constitutional responsibility--is to take up and pass a budget and fund the core functions of the government for the year. Last year, Democrats had the majority in the House of Representatives. They had a filibuster proof majority in the Senate. And, of course, they had the White House. But they were so tied up with pressing matters like passing a $2.6 trillion health care bill that the American people did not want, that they never got around to passing a budget. And then in the fall, as the bottom fell out of public support for the Democrats, they were too interested in salvaging their majorities and trying to spin ObamaCare that they never funded the government. So that is why we are here. We are debating a spending bill for fiscal year 2011. It is April of 2011. Fiscal year 2011 started in October of last year. It is very simple. Democrats did not do their job, and so they left it to the new Republican majority in the House to fund the government for fiscal year 2011. The Republican-led House got to work. They passed H.R. 1. Now I know that it is in the Democratic talking points to call this bill extreme, but what exactly did it do? When you strip away the ideology and the rhetoric about this so- called dangerous and extreme bill, what exactly did it do? Here's what it did. It reduced non-defense discretionary spending by $61 billion. That is a big number, but let's put this in perspective. This year we are scheduled to spend $207 billion just on interest on the debt. This year we have a projected budget deficit of $1,600 billion. And this year, the Federal Government is on pace to spend $3,800 billion. So H.R. 1 was proposing $61 billion in reduced spending by a Federal Government on pace to spend $3,800 billion. You all have heard the old joke. When someone is asked if they got a haircut, they respond I got them all cut. In this case what the Republicans are proposing is like going to the barber and getting just one of the hairs on your head trimmed. The Democrats call this bill draconian. But as one person put it, the spending reductions in this bill are equivalent to ordering a Big Mac, a large Coke, and a large fry, and then eating the whole Big Mac, drinking the whole Coke, eating 98 of the 100 fries in the bag, taking a bite of the 99th fry, and then leaving the rest. That is hardly a crash diet. But to hear Democrats talk, Americans would starve if H.R. 1 passed. That is not an exaggeration. Former Speaker Pelosi suggested as much just yesterday. To hear Democrats talk, this is Armageddon. To hear them talk, this $61 billion in spending reductions is so onerous, America will never be the same. Americans aren't buying it. The people of Utah, and people around the country, understand that if the Senate were to accept the full $61 billion in spending reductions, life would not only go on, no one would notice any difference at all. Let's look at this a different way. Nondefense discretionary appropriations have been hiked up by 24 percent in the last 2 years, and 84 percent if you count the stimulus bill. But to hear Democrats talk, even beginning to roll back this explosion in government spending is akin to shredding the Declaration of Independence. Give me a break. The bottom line is that the cuts in H.R. 1 are more than reasonable. People who are remotely serious about reducing the size of government should accept them in full. But the White House, and their Capitol Hill allies, do not seem to have gotten the message that Americans want to roll back spending. Instead, they are playing politics. They have calculated that if the government shuts down--if Senate Democrats refuse to pass and the White House refuses to sign a bill to reduce spending--the Republicans will be left holding the bag. They think that history will repeat itself, and just as in 1995, the public will blame Republicans for a government shutdown. Even the New York Times might not be able to carry that much water for the President and his Democratic allies. The American people get this, and they are saying enough is enough. If the White House and its Capitol Hill allies think they can force a government shutdown and blame Republicans, they must have zero respect for their constituents. The last week of negotiations has proven yet again that big spending is in the Democrats' DNA. They are congenitally incapable of reducing government spending, so much so that they are even willing to shut down the government. In the words of John Blutarsky, ``when the going gets tough, the tough get going.'' But when the going got tough on these negotiations, the Democrats were missing in action. The President jetted off to a couple of fundraisers. And his Capitol Hill allies turned to the rankest of political smears. The incoming chairwoman of the Democratic National Committee, who until about 5 minutes ago was scolding Republicans for their lack of civility, hit the ground running and claimed that the budget proposed by House Republicans for next year is a death trap for seniors and a tornado through nursing homes. So much for an adult conversation. The Democratic Congressional Campaign Committee was quick to fundraise off of these spending fights,. In an e-mail to their dare-I-say extreme base, they claimed that Republican negotiators are engaged in blackmail and blamed tea party citizens for the shutdown, rather than the Democratic leadership that refuses to pass the fiscal year 2011 spending bill and move on. I will tell you what. They might have an easy time raising money by smearing conservative Republicans and blaming them for this mess. But this is fool's gold, because they are going to have a heck of a time explaining to our men and women in uniform why it is that they refused to pass a bill that would make sure they are paid. Because the Democrats in this chamber will not accept the modest spending reductions in H.R. 1, the House took up H.R. 1363 today. This is a continuing resolution that will fund the government for a week, prevent a shutdown, and fund the Department of Defense through the end of the year, making sure that our servicemen and women receive their paychecks and that our national security is not compromised. The ball is in the court of this body's leadership. The President has now made it clear that he is willing to shut down the government rather than pass this CR. They have issued a Statement of Administration Policy suggesting that they will veto this continuing resolution if passed. If the President wants to go off this cliff, I can not stop him. But I would encourage my Democratic colleagues here that they do not need to follow him off that cliff. Now, their leadership is saying that it will oppose H.R. 1363 because it eliminates taxpayer funding of abortions in the District of Columbia. In the end, I cannot believe that they would shut down the entire Federal Government in order to appease the most radical pro-abortion members of their left-wing base. We will see what happens. Maybe the Senate will do the prudent thing and pass H.R. 1363. But I am not holding my breath. The $61 billion in spending reductions passed by the House months ago is equivalent to 1.6 percent of total projected federal spending. Americans tighten their belts much more than this every day, but Democrats are acting like these cuts are the end of the world. I would say that the leadership on display from the White House on this issue is pathetic, if there was any on display at all. Because the White House has showed zero leadership on the issue of spending and government bloat, because it has refused to make the decisions that would force the Federal Government to live within its means, we are in this unacceptable situation of a potential government shutdown. Our Nation is broke. We have to stop spending money we do not have. But on this most critical of issues the President has been missing in action. His advisers seem to be treating this exercise like it is a no-stakes Harvard Law seminar in multiparty dispute resolution. But the stakes could not be higher. This situation calls for leadership, but we are getting nothing from the White House. It is time for real leadership that keeps the government running while cutting spending. I urge the Senate to adopt H.R. 1. In the alternative, we should adopt the House-passed short-term CR. There is no need for a government shutdown. Democrats who think that clever strategists and professional politicos can spin the American people into thinking this is the Republicans' fault, even though it was the Democrats who walked away from the from the table, should remember last year's experience with ObamaCare. Reluctant Democrats in the House and Senate were told by the same strategists and professional spinners that ObamaCare could be messaged in a way so that it would benefit them. Today there are many former House and Senate Members who wish they had not bought that snake oil. If the government shuts down, no amount of spinning is going to convince Americans that this was the fault of anyone other than the President and Democratic congressional leadership who have refused to make any meaningful reductions in Federal spending. I yield the floor.

Mr. HATCH

Mr. HATCH. Madam President, I am going to defer my remarks until after the Senator from Nebraska speaks. I want to defer to this wonderful Senator because he has done more than any other person in trying to repeal this awful tax provision, this 1099 tax increase provision, and he deserves the credit. I want him to lead off in our debate. Then I will probably speak after that. I yield for the Senator from Nebraska.

Mr. HATCH. Mr. President, today we will vote on the Menendez amendment and then on Senator Johanns' amendment to repeal the 1099 tax increase provisions of the health spending law and the small business law. As you know, the health spending law was enacted a little over a year ago, and we are already here trying to undo some of the damage that this massive law has imposed on small businesses. We have heard from small business owner after small business owner who was shocked and frustrated to learn the 1099 provision in the health spending law would require small businesses to send out a much larger number of IRS Form 1099s. This provision was a counterproductive assault on businesses, and it was unleashed for one reason: to provide the dollars to pay for ObamaCare's $2.6 trillion in new spending; in other words, to try and back up that spending. Just to be clear, this is what this provision requires: Starting on January 1, 2012, if a business pays at least $600 in total in 1 year to a single payee, that business must send an IRS Form 1099 to the IRS as well as to that payee. Since businesses frequently pay at least $600 in 1 year to all kinds of different payees, this means the health spending law has created an enormous paperwork burden on our businesses, including many small businesses. This is exactly the kind of burden small businesses do not need to face at this time, when we are still facing unemployment at 8.8 percent, and small businesses create 70 percent of new jobs in this country. The National Federation of Independent Business, whose membership is made up of small businesses, hit the nail on the head in its April 4, 2011, letter about this provision. This is what they had to say: We are writing to urge you to support H.R. 4, the Comprehensive 1099 Taxpayer Protection repayment of Exchange Subsidy Overpayments Act of 2011, and to oppose the Menendez amendment. Passing H.R. 4 without any amendments is the best way to finally repeal the expanded Form 1099 requirements included in the Patient Protection and Affordable Care Act. Tax paperwork and compliance are already major expenses for small businesses, and the new reporting requirements included in PPACA will substantially increase these costs. The new paperwork mandate will require businesses to track and report to the IRS most business-to-business transactions above $600 in a calendar year. For many businesses this could amount to hundreds of new reportable transactions, which involves sending a 1099 to both the IRS and the reportable business. That is a pretty strong statement, and the message is clear. This provision will impose considerable hardship on American businesses. The result of this provision will be much more paperwork and much less job creation. I spoke this morning to the Tax Executives Institute, which is one of the most prestigious institutes in our country, especially on taxes. What I announced to them was that I think we are going to get rid of this provision, and I almost got a standing ovation. They went wild down there this morning. This provision will impose considerable hardship on American businesses, especially small businesses. The result of this provision will be much more paperwork but a lot less job creation. In addition, Monday, April 4, 2011, the U.S. Chamber of Commerce weighed in on this provision with a similar diagnosis. This is how the chamber put it: The 1099 reporting mandate, if not repealed, will force more than 40 million entities, including governments, nonprofits, and small and large businesses, to comply with onerous data collection and IRS information filing burdens on virtually all non-credit card purchases totaling $600 or more with any vendor in a tax year. At a time when they can least afford it, entities will have to institute new, complex recordkeeping, data collection, and reporting requirements to track every purchase by vendor and payment method. This provision will dramatically increase accounting costs and could expose businesses to costly and unjustified audits by the IRS. The Chamber strongly supports H.R. 4, which would repeal the 1099 mandate, and strongly opposes the Menendez amendment. Mr. President, I ask unanimous consent to have printed in the Record the letters from both the NFIB, the representative of small businesses in this country, and the Chamber of Congress.

Mr. HATCH. Mr. President, President Obama and congressional Democrats tried to sell the American people on their clunker of a health care law by saying it would bring down Federal health care spending. That would have been a miracle if it were true. But even the Obama administration's own actuary at the Centers for Medicare and Medicaid Services has confirmed that claim was false and that Federal spending on health care would actually increase as the result of the health spending law. Some estimate as much as $2,100 per policy. The Cash for Clunkers Program was bad enough, but Democrats managed to outdo themselves spending $2.6 trillion in cash for this clunker of a health care law. This reminds me of a scene from the movie ``Vacation.'' At the beginning of that film, Clark Griswold goes into a dealership to buy a new car before setting off with his family for a cross-country trip to Wally World. Yet instead of getting the new car he had ordered as part of a trade-in, the dealer gave him a pea green Family Truckster, as we can see in this beautiful photograph. Chevy Chase was, of course, Griswold. One only had to look at the Family Truckster to know that it was a lemon. Clark told the dealer he wanted his old car back. Unfortunately for Clark--or the actor, in this case--his old car was crushed before he could get it back. You can imagine the consternation Chevy Chase faced. You can see the Family Truckster in this picture behind me. There it is, with Chevy standing on top as Clark Griswold. Clark's experience with the Family Truckster is a metaphor for Americans' experience with ObamaCare. Our Nation's health care system might have needed some work--there is no question about that--but the vast majority of Americans were satisfied with their health care. Yet Democrats gave Americans ObamaCare which, like the Family Truckster, is a true jalopy, and they did their best to crush our former health care system before we could stop them. I also add that Americans, such as Clark Griswold, eventually reached their wits' end. The tea party, the gubernatorial elections in New Jersey and Virginia, the election of my colleague, the junior Senator from Massachusetts--all of these actions were the result of Americans standing up and letting it be known that they were sick and tired of Washington recklessly spending their money and recklessly regulating, and they were not going to take it anymore. To borrow from Robert Daltrey, Americans made it clear that they are not going to get fooled again, but that did not stop the Democrats from trying. At the time the health spending bill was being enacted, President Obama and congressional Democrats were raising taxes to make it appear they were partially paying for the $2.6 trillion in new spending contained in the partisan health spending law. When the Democrats say this health law saved money, ask yourself this: If the law was actually going to reduce Federal spending on health care, would these massive tax increases have been necessary? In the end, ObamaCare was more of the same--a tax-and-spend law that vastly increased the size of an already-bloated Federal Government. President Obama and congressional Democrats should not have raised taxes and cut Medicare to fund a new entitlement program--an unsustainable entitlement program. After all, the three largest entitlement programs--Social Security, Medicare, and Medicaid--are already headed for a fiscal crisis. To create a fourth massive entitlement program when these three entitlement programs were already going broke was fiscal insanity. That is one reason we need to repeal the health spending bill in its entirety and start over. Senator Johanns' amendment to repeal the 1099 provisions in the health spending law and small business law is a good first step in getting rid of the partisan health spending bill entirely. I think a lot of people, including Members of Congress who voted for the small business bill last year, were surprised to learn that Congress enacted a second 1099 provision last year. This is separate and apart from the 1099 provision enacted in the partisan health spending law. This new 1099 provision was enacted as part of the small business law last year. I voted against it. By the way, this provision is already in effect since it applies to payments made on or after January 1 of this year. This 1099 provision causes landlords who are not even actively engaged in the rental real estate business to send in a Form 1099 to the IRS. It is required when they pay more than $600 in 1 year to a vendor for goods or services. For example, suppose a landlord spends more than $600 over the course of a year at a home improvement store. That landlord must send out a Form 1099 and send it to the IRS, as well as the provider of goods or services. In addition, that landlord must track down the vendor's taxpayer identification number, which is not necessarily an easy task to do. This law creates a large and unexpected paperwork burden on these landlords. With the real estate market struggling, we should not impose new paperwork burdens on landlords which only hurt the real estate industry even more. I urge my colleagues to vote yes on the Senator Johanns' amendment and vote no on the Menendez amendment. As I said, Senator Johanns' amendment is a downpayment on a total repeal of the onerous health care law that over time will wreck our Nation's health care system and lead to an explosion of new Federal spending. I ask my colleagues to vote no on Senator Menendez's amendment. I personally wish to pay tribute to my colleague from Nebraska for his indefatigable efforts in trying to repeal these terrible paperwork burdens that nobody is going to look at anyway, that really are not going to make any difference and are just going to cost an arm and a leg over time. I thank him for the hard work he has done. He deserves credit for continuing to fight these battles. I hope all of us on the Senate floor will get rid of this monstrosity today and hopefully work together to try and straighten out what is a very bad bill in ObamaCare. I reserve the remainder of my time.

Mr. HATCH. Mr. President, we are headed toward $20 trillion in spending. The President's program, the Democrat's program, is maybe one-half of 1 percent, which is almost nothing. This is their program, a blank sheet of paper. That is what it is. At least Congressman Ryan, the Budget Committee chairman over in the House, is trying to do something that is worthwhile. By the way, just so everybody knows, the rich are not going to be treated tremendously respectfully in this matter. They are going to lose, on the top level, on entitlement programs. There is a cutback for those who reach a certain level of income. This is not as simple as it sounds, nor is it a desire to take anything away from senior citizens. It is trying to get our country's budget under control and it is out of control. Mr. President, I yield up to 5 minutes to the distinguished Senator from Maine, if I can.

Mr. HATCH. Mr. President, how much time remains to both sides?

Mr. HATCH. I reserve the remainder of my time.

Mr. HATCH. Mr. President, how much time remains?

Mr. HATCH. I ask unanimous consent that I give a minute to the distinguished Senator from Nebraska and then, if there is not enough time remaining, that I be given sufficient time, up to 2 minutes, with an equivalent amount of time given to the other side, to make my closing remarks.

Mr. HATCH. Mr. President, if you say you are for fiscal responsibility, you need to oppose the amendment of my friend from New Jersey. Here is why. The nonpartisan scorekeeper for tax legislation, the Joint Committee on Taxation, tells us that the Menendez amendment puts the savings on the House bill in doubt. That means that if the Menendez amendment is adopted, the House bill will add to the deficit by perhaps as much as $25 billion. The Menendez amendment would maintain the risk of payment of billions in fraudulent, improper, or excessive health insurance exchange subsidies. What is more, the Senate unanimously agreed to a similar offset on the doc fix bill. My friends, if you were against fraudulent, improper, or excessive health insurance payments before, stick to your guns--oppose the Menendez amendment. I yield the floor, and I am prepared to yield back any time we have.

Mr. HATCH. Mr. President, I would like to briefly respond to my friend from New Jersey's comments about the Joint Committee on Taxation's analysis of his amendment. The Joint Committee on Taxation corresponded with Senator McConnnell's office on Senator Menendez's amendment. I ask unanimous consent to have printed in the Record relevant portions of that e-mail discussion.

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

Mr. HATCH

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

Mr. HATCH

Mr. HATCH. Mr. President, I rise to speak on a matter of great importance to the economic health of State and local governments. I am talking about dangerously underfunded employee pensions. We hear about this problem every day in States such as Illinois, California, New Jersey, and many others. It is a multitrillion-dollar problem. Let me repeat that. The underfunding of these pensions runs into the trillions of dollars. Not billions, trillions. How did this happen? There are two primary causes. First, governments have promised too much money in lifetime pensions; and, second, governments have not set aside enough money to pay for those pensions. The shortfall between the money that has been promised and the money set aside is called underfunding, but that is just a sterile accounting term that means we don't have enough money to pay the bills. Where I come from, that is called being broke. It is bad enough when you go broke because you have been irresponsible with your own money. Yet it is a tragedy when governments go broke being irresponsible with taxpayer money. That is what I fear we are watching as this public pension crisis unfolds. There have been many studies in recent years of our public pension crisis. There is no question about whether this crisis exists. The only question is the magnitude of the crisis. One prominent study by scholars at the Kellogg School of Business at Northwestern University estimates that public pension plans are underfunded by over $3 trillion. That is a lot of money. An analyst at the Brookings Institute says public pensions are $2.5 trillion in the red. A study published last month found that all by itself, California has a $240 billion pension shortfall. You heard that right. California alone has a pension debt of $\1/4\ trillion. Some have estimated that Illinois is in even worse financial shape. If the States and localities do not act aggressively to address these shortfalls, then the question will not be whether the States will become insolvent but when? Regardless of whose numbers and which study gets the closest to the mark, there is no denying that public employee pensions face a multitrillion-dollar shortfall in the aggregate. Though none will deny this shortfall. Some will seek to shift the blame and shirk responsibility for this crisis. I want to nip in the bud one of the arguments of those interests who would prefer to ignore this crisis. They will argue this is not a problem of too many pension promises and the underfunding of those promises. They will try to divert attention from the fact that public employee pensions have too often not been funded on a sound basis. Instead, they will say the pension funding problem is owing to the 2008 economic crisis and the big businesses that, they say, caused it. This is way off the mark. But don't trust me, trust the numbers. This pension shortfall existed before the recession, and an attempt to lay blame at the feet of Wall Street or big business or some other group is just plain blame shifting. One aspect of the problem is that governments have been slow--and public employees have been resistant--to transitioning to the types of retirement plans that private sector workers have been living with for years. The rest of the world has moved toward 401(k)-style plans, called defined contribution plans. In these plans, costs are lower and more predictable. They fit well with an increasingly mobile and dynamic workforce. Yet governments have remained wedded to expensive, traditional pension plans for far too long. These old-style traditional pension plans--defined benefit plans--owe a monthly payment for life to each employee regardless of how much money the government has set aside, regardless of how well the pension assets have been invested, and regardless of whether the ratio of active workers to retirees has remained stable. For most private companies these plans proved simply unsustainable, and over time they moved toward more flexible retirement plans for employees. Yet as usual, government is slow. It is slow to innovate and slow to adapt. So even though these defined benefit plans had the potential to cause enormous financial problems for governments, governments stuck with them. Private companies learned long ago that traditional pension plans are too expensive for most businesses. In 1985, 80 percent of medium and large private companies had a traditional pension plan. Today, just 30 percent have a traditional plan. By contrast, 84 percent of State and local government workers are covered by high-cost traditional pension plans. And government is not just any employer. Governments only exist because of taxpayers. Ultimately, taxpayers are the employers of government employees. Yet these governments are living in the past, playing irresponsibly with taxpayer money, and leaving taxpayers to foot the bill for too many lifetime pension promises. So why do these lifetime pension guarantees continue? There are many reasons, but at the top of the list is the unique character of government as an employer. Private employers moved away from traditional pensions to more affordable 401(k)-style plans because they can't stay in business if they ignore economic reality. Yet governments have kept their unaffordable traditional plans, often because public employee unions use taxpayer-funded union dues to elect State and local politicians and then ask the same politicians they just elected for costly pension deals at taxpayer expense. When a union bargains with a private employer, employer and employee have an interest in the business continuing as a viable enterprise. If the benefits are costly and uncontrollable, the business goes under and everyone is out of a job. But where are the interests in a negotiation between a public employee union and the person they just helped to elect to office? Where are those interests? Union bosses are sitting across the table from the Governor of the State--the Governor they just helped to elect with millions in campaign contributions--and they ask him for a costly, guaranteed lifetime retirement package, often with little or no cost-sharing by the public employee. What is a politician going to say? Sorry, but I can't help you? I doubt it. I want to read something from the Wall Street Journal. On October 22, 2010, just prior to the last election, the Journal carried a story about the role the American Federation of State, County and Municipal Employees, or AFSCME, was playing in that election. According to the journal: The American Federation of State, County and Municipal Employees is now the biggest outside spender of the 2010 elections. The 1.6 million-member AFSCME is spending a total of $87.5 million on the elections after tapping into a $16 million emergency account to help fortify the Democrats' hold on Congress. Last week, AFSCME dug deeper, taking out a $2 million loan to fund its push. The group is spending money on television advertisements, phone calls, campaign mailings and other political efforts. ``We're the big dog,'' said Larry Scanlon, the head of AFSCME's political operations. ``But we don't like to brag.'' ``We are the big dog.'' That about sums it up. And when the big dog barks, it expects the people it helped elect to jump. Why do you think they are spending all this money? Because public employee unions care about global warming? Richard Trumka, the head of the AFL-CIO, a man I respect, has said he talks with the White House every day and visits a couple times a week. Why do people think he is doing that? Playing pick-up basketball with the President? He is talking about how to benefit his unions, and lately that means public employee unions. There were some recent reports suggesting that Organizing for America--a Democratic National Committee project designed to reelect President Obama--was helping to foment the protests in Wisconsin. These unions are spending big-time money to elect politicians because they know the politicians will deliver big-time benefits. But the chickens are coming home to roost. As we are seeing in State after State, the markets have something to say about these collusive relationships and the benefits they secure. The credit-rating agencies have announced they will begin factoring unfunded pension obligations into the calculations they use to rate the creditworthiness of States. This is significant because the total value of State bond debt is estimated to be around $1 billion, while pension debt is at least two or three times that amount. State credit ratings reveal another aspect of the State budget crisis. The five States that prohibit collective bargaining of retirement benefits have Moody's highest credit rating. California and Illinois, which allow collective bargaining of retirement benefits for public employees, have the lowest credit rating among the 50 States. The next four lowest States also allow collective bargaining. Illinois is in the worst shape of all, with less than 40 percent of the funds needed to pay its public employee pensions. The Illinois situation is so dire that for the last 2 years the State has had to borrow money just to make its pension contribution. This year Illinois had to pay a 2-percent higher interest rate just to borrow money to contribute to its pension program. Now, this is madness, and it cannot go on forever. Thirty years ago the Federal Government moved away from an expensive traditional pension plan and set up a basic pension plan in combination with a 401(k)-style defined contribution plan. The system has worked well so far, although at some point we might need to reform Federal pensions too. Some forward-looking States have begun moving to 401(k)- style plans. In my own home State of Utah the traditional pension plan is being replaced. New employees are being given a choice between a 401(k)-style plan and a hybrid plan with a combination of traditional and 401(k)- style features. Last year Governor Chris Christie in New Jersey added a 401(k) plan for a portion of the New Jersey workforce. In Kansas, Governor Sam Brownback and the Kansas Legislature are studying the possibility of converting their pension system into a 401(k)-style plan. In Wisconsin, Governor Scott Walker has asked that the State study the feasibility of establishing a 401(k)-style plan. There are many potential solutions to the public pension crisis, and all of them should receive consideration. We should be encouraging these courageous Governors on rather than demonizing them and demagoguing this issue. I, for one, would like to congratulate the Governor of Wisconsin for his bold stand on the issue of public employee benefits. The victory he secured last week is significant. He stood responsibly for the long-term interests of his State rather than doing the easy thing and caving under the pressure of union-organized protests and the childish and disrespectful resistance of Democratic lawmakers who chose to flee the States rather than engage in this debate. Governor Walker understands our greatest enemy is delay. The director of the Pew Center on the States has said that while these problems are significant, they can be solved if we act now. If we wait, the crisis will become unmanageable. Mr. President, it is my intention as ranking member of the Finance Committee to find a way to address the public pension crises if State and local governments don't step up to the plate. I am under no illusions this will be an easy task. The problem is both large and complex. There are many potential solutions that must be studied, and some will not be pleasant. Some of my colleagues in the Senate have a proposal to address the problem, and I will be working with them as well. I do not have all of the answers yet, and I have not settled on what I believe are the best solutions. But we are working hard and talking to the experts about the best way to proceed. I am sure of one thing, however, and I want to be 100 percent clear about this. There will be no Federal bailout of any State or local government. Let me just repeat that. No Federal bailout. Just last month, after Illinois sold its high-interest bonds, the Governor indicated that he plans to ask for a Federal guarantee. Well, Governor, you can save your breath. The answer is, no. We cannot ask taxpayers and the rest of the country to pay for underfunded pensions in Illinois, California, or any other State that made promises it clearly cannot keep. To do so would be more than unfair; it would be immoral. A Federal bailout cannot happen, and it will not happen. Mr. President, I suggest the absence of a quorum.

Mr. HATCH

Mr. HATCH. Mr. President, I want to take a few moments to discuss a pressing matter. In a few hours, the Senate will take up another short-term continuing resolution to fund the government for fiscal year 2011. Earlier this month, I voted no on another short-term CR. From my perspective, the spending reductions provided in that bill were a start, but they sent a bad sign. Washington needs to make clear, to citizens and to the markets, that it is serious about restoring the fiscal integrity of the United States. Don't get me wrong, any spending reductions are good spending reductions. But by getting into the habit of passing continuing resolutions rather than long-term funding bills with significant reductions in government spending, Congress and the White House send the signal that real spending restraint is impossible. The spending reductions in the last CR were a start, but they simply did not go far enough to bring fiscal sanity back to Washington. Unfortunately, in this opening volley in the debate over spending--to borrow from the former coach of the Arizona Cardinals, Denny Green--Democrats have shown that they are what we thought they were. The rest of the world heard voters loud and clear last fall. Voters want spending restraint from Washington. Republicans told voters that Democrats could not be trusted on spending. And Democrats are still making our case. One of my Democratic colleagues in the Senate has said that with respect to fiscal year 2011 spending reductions, I think we have pushed this to the limit. Last week, Democrats drew their line in the sand, and according to the Congressional Budget Office, they refused to reduce spending by any more than $4.7 billion. So in an appropriations bill that would spend over $1 trillion, Democrats could not find any more than $4.7 billion in reductions. The most they could come up with is a spending reduction of one-half of one percent? If Democrats consider these pathetic spending reductions pushing it to the limit, I would hate to see them really slacking off. In the Democrats' world, you are only truly stingy if you fail to increase spending. But failing to increase spending is not reducing spending, and we need to be reducing spending. American families are doing it at home, and we need to be doing it here. Pushed it to the limit? Give me a break. There is no better time than right now to get serious about reducing spending. First, with each short-term CR that passes, it becomes less likely that we will get the full $61 billion in spending reductions that Americans want to see Congress adopt. Second, I am not going to sign onto the Democrats' strategy of short-term CRs that will jeopardize our national defense. We cannot be funding national defense in little 2- and 3-week blips. And third, we need to make it clear that discretionary spending matters. Democrats are fond of saying that the problem with our budget deficits is not discretionary spending. Well, it might not be the entire problem but it is a big part of the problem. Democrats suggest that discretionary spending is a sideshow. The real money is in entitlements. Let me make one point here. Democrats today say they want to focus on entitlements, but you can bet the farm that today's budget-minded Democrats will start bludgeoning Republicans for any effort, no matter how modest, to get entitlement spending under control. The writer Andrew Ferguson got it right when he called these Democrats tough-choosers. They always talk about making the tough choices to get our spending under control, but the minute Republicans attempt to address deficits and debt, these same Democrats hammer Republicans for the coldheartedness. Getting at entitlement spending requires bipartisan leadership and Presidential leadership. Yet the President, who has enough time to go on national television and fill out his NCAA bracket, is only committed to a serious conversation about entitlements. We need more than a conversation; we need leadership. But leadership on spending is wanting among Washington Democrats. In the end, these Democratic tough-choosers won't stand strong on discretionary spending or entitlement spending. So let's focus on discretionary spending. It is a problem, and it is what the American people sent us here to address. Nondefense discretionary spending has grown by 24 percent over the last couple of years. This needs to be rolled back significantly. People in Utah understand that returning us to 2008 spending levels is the responsible thing to do. When Democrats tell you that discretionary spending does not matter, think of a person who needs to go on a diet. The person weighs 300 pounds and needs to radically change his lifestyle in order to get in shape. When a Democrat says that we don't need to worry about discretionary spending, it is like an overweight person saying there is no need to worry about the half-pint of cookie dough ice cream he eats every day because he has cut out his daily large pizza. If you want to lose weight, you can't have either. And if you want to reduce spending, you need to address all of it. The fact is, we are up to our eyeballs in deficits and debt. For the third consecutive year, we will have a deficit of over $1 trillion. We blew $1 trillion on the stimulus and followed that up with a $2.6 trillion health care bill that we could not afford. I appreciate the efforts of my Republican colleagues, both in the House and the Senate, as they try to reach an agreement on a spending bill that should have become law last year. But Democrats, who controlled the White House and both Houses of Congress, shirked their responsibilities. And now they are digging in, trying their best to thwart the will of the American people and hold the line on the spending that Democratic special interests demand. Here is a basic question that should inform this debate. What do you do when you are spending more money than you make? Even a second grade student could tell you that you stop spending money. Democrats' subservience to the spending status quo would not pass a second grade math class. But do they really mean to say that they can't find anything to cut? For some, every new crisis--real or imagined--seems to demand a solution that only government can provide. But how often do we really look back with a critical eye and evaluate the effectiveness of all of these new government programs? I am afraid not nearly enough. Thanks to the work of my colleague from Oklahoma, Dr. Coburn, the GAO recently identified possibly hundreds of billions of wasteful and redundant government spending. Government is littered with programs that can be reduced or eliminated. To that end, along with my colleague from Colorado, Senator Udall, I have introduced legislation that would create an anti-appropriations committee specifically designed to ferret out and cut government waste. And, of course, the ultimate fix for all of this spending is the balanced budget amendment, which I have introduced with my colleague Senator Cornyn, and is cosponsored by 31 of our colleagues. With a balanced budget amendment and with serious efforts by Congress, we can reduce spending in Washington, and we can restore constitutional limits on the size and reach of the Federal Government. This is no longer an ideological issue. Democrats might not know that yet. But spending is now an issue that transcends partisan allegiances. Washington's reckless spending has now become a serious enough issue that financial markets are paying attention. Just last week, the world's largest bond investor divested all of its holdings in U.S. Treasuries. This is hardly a vote of confidence in the integrity of our Nation's finances. Yet what is the Democrats' solution? Let's reduce spending by $4.5 billion. To borrow from my friend and colleague from Iowa, Senator Grassley, this is a spit in the ocean. Congress needs to send a signal to the world that it is serious about taking on government spending. Unfortunately, Democrats remain intent on being unserious. I will not play these games with our Nation's fiscal integrity. I look forward to a meaningful debate over a long- term fiscal year 2011 spending bill. In the meantime, I will not be supporting the CR when it comes up later today.

Mr. HATCH

Mr. HATCH. I thank the Senator. I agree with the chairman that it is important that we set down a definitive legislative history of those subsections, which will be important for each and every patent application.

Mr. HATCH. The Senator from Vermont is correct. For the purposes of grace-period protection, the legislation intends parallelism between the treatment of an inventor's actions under subsection 102(a) that might create prior art and the treatment of those actions that negate any prior-art effect under subsection 102(b). Accordingly, small inventors and others will not accidentally create a patent-defeating bar by their prefiling actions that would otherwise be prior art under subsection 102(a) as long as they file their patent applications within the grace period provided by subsection 102(b). But, the important point is that if an inventor's disclosure triggers the 102(a) bar with respect to an invention, which can only be done by a disclosure that is both made available to the public and enabled, then he or she has thereby also triggered the grace period under 102(b). If a disclosure resulting from the inventor's actions is not one that is enabled, or is not made available to the public, then such a disclosure would not constitute patent-defeating prior art under 102(a) in the first place. But even if the disclosure was enabled and available to the public so that it did qualify as prior art under subsection 102(a), subsection 102(b) would require that the disclosure be disregarded if it occurred during the 1-year grace period before the patent was sought. Indeed, a disclosure that does not satisfy the requirements to be prior art under subsection 102(a), nonetheless constitutes a disclosure that is fully protected under the more inclusive language of subsection 102(b). This relationship between these subsections will fully protect the inventor and, together with the provisions of subsection 101 limiting patenting to inventors, prevent others from obtaining a patent on the inventor's creation.

Mr. HATCH

Mr. HATCH. Mr. President in a few hours, this body will vote. This is a solemn responsibility, one not to be taken lightly. At Gettysburg, Abraham Lincoln reminded Americans that those who died on that battlefield fought for government of the people, by the people, and for the people. We are only here because the people, our constituents, sent us here. And every time we vote, we represent them. We represent their aspirations. We represent the dreams of growing families and entrepreneurs. We represent the interests of taxpayers. Of course, not all votes are created equal. Some are more important than others. And in my view, the votes that we are taking today are transcendent. They are quite literally about the future of this country. Are we going to be a country with a constitutionally limited government; are we going to be a country that limits the burden of taxation on individuals and families and businesses; or are we going to become Europe? Are we going to move toward a full-blown cradle-to-grave nanny government with the majority of Americans on the public dole and a small group of individuals bankrolling an ever expanding leviathan state? In short, are we going to remain America--a beacon of freedom to the world or do we aspire to become a second European Union with high taxes, high spending, and measly economic growth? Again, I remind you that we represent the aspirations of our constituents. I represent the people of Utah. And I can tell you that they do not wake up in the morning and say--You know what--America would be much better if we were more like France. This is no exaggeration. Right now government spending is at 25 percent of gross domestic product. And if we do nothing, that number is just going to grow, pushing past 25 and cruising toward 28 percent of GDP. The last time we did that was during World War II. Republicans and Democrats have very different ideas about how to address this spike in spending. Either we can step off the pedal, hit the brakes, and bring spending back in line with historical levels--levels that respect our Constitution of limited government and respect taxpaying citizens or we can keep the car on cruise control and drive the car off the cliff. Republicans want to hit the brakes. Democrats want to pull a Thelma and Louise with our economy. I, for one, am not going to sit back and let them do this. Let's be clear about what the Democrats and Republicans are proposing. H.R. 1, the bill that passed the House, appropriates $1.026 trillion in nonemergency discretionary spending. The alternative offered up by my Democratic colleagues would appropriate, $1.079 trillion in total nonemergency discretionary spending. H.R. 1, the bill passed by the new Republican majority in the House-- a majority that most closely represents the views of millions of Americans who are genuinely scared about our Nation's fiscal trajectory--would reduce spending by $57 billion over the current continuing resolution. The Democratic alternative would reduce spending by just $4.7 billion. You will hear Democrats complain about the draconian cuts in the House-passed H.R. 1. This is nonsense. The fact is, when you look at Federal nonemergency discretionary spending as a whole--which has exploded under Democrats' control of Congress and with President Obama's acquiescence in their big spending ways--H.R. 1 provides modest cuts. The people of Utah, and the people of this country, understand this. So now that Republicans are winning the game on spending cuts, Democrats are seeking to move the goal posts. It is now being suggested that we can bridge the gap between these two bills by going after entitlements and tax expenditures. Don't get me wrong, we need to address both. But I can tell the Members on the other side now that we are not going to let you shift the debate. This is a debate about discretionary spending. This is a debate about low-hanging fruit. Last week, the Government Accountability Office issued a report detailing possibly hundreds of billions of dollars in government waste and bloat. There is plenty of fat to be cut in the discretionary budget, and doing so would give our constituents and Members of Congress the courage to go after bigger fish. Yet, Democrats can't find it in themselves to cut an additional $50 billion when nonemergency discretionary spending is well over $1 trillion. Some are now proposing that we get into tax expenditures. Tax expenditures are a debate for another time. Nondefense discretionary spending has grown by 24 percent over the last couple of years. We can cut that back significantly. We need to do so, and Americans understand that going back to 2008 spending levels is not the end of the world. I also want to correct the record with respect to H.R. 1 and Medicare Advantage. Yesterday, Secretary Sebelius sent a letter to my colleague, the chairman of the Finance Committee, Senator Baucus, suggesting that H.R. 1 would have a detrimental impact on Medicare Advantage. This assertion is Orwellian. The Secretary knows full well that ObamaCare cuts more than $200 billion from an MA program that currently serves nearly 12 million seniors. According to the administration's own Chief Actuary, these devastating cuts will reduce enrollment in this popular program by 50 percent. Furthermore, the CBO has also found that these cuts would reduce important benefits by 50 percent for seniors enrolled in the program. H.R. 1 is intended to halt the harmful cuts to seniors in the MA program. Suggesting otherwise, as the Secretary did, is both inaccurate and risks confusing millions of seniors. H.R. 1 is a good bill. It is solid and responsible. And I will be supporting it. But it is only a starting point. The fact is, we are going to need many more cuts in discretionary spending. The American people--the people who sent us here--have not signed on to the Democrats' project of Europeanizing the United States economy. Citizens in every State want to roll back spending, reduce the tax burden on families and businesses, and--restore America's promise of opportunity and economic growth. My colleagues on the other side of the aisle need to get with the program. We will be cutting spending. And we need to cut a lot of it. It may not all happen in the next 2 years. The American people might need to speak again and send people to Washington in 2012 who will accurately represent their interests. This is a big vote today. And when we look back, I think Americans will say: It was just a beginning. Mr. President, I suggest the absence of a quorum.