Johnny Isakson

Mr. ISAKSON

Mr. ISAKSON. Mr. President, I wish to, first of all, kind of tag on to the remarks of the leader for just a second. One of the things I wish we would do in this body is get out of the business of demonizing certain segments of our population. Both sides are guilty of it, from time to time. But I wish to particularly talk about the major employer of the United States--small business--and the leader's reference to the 5.6-percent surtax. Documents show that 392,000 American small businesses would be impacted by a 5.6-percent surtax in order to pay for the President's jobs bill. Records show that 72 percent of the American people are employed by small business. We have to ask ourselves this question: If we are interested in creating jobs, why would we target the job creator that creates three- fourths of the jobs in America and put a surtax on them? It does not make any sense. If there were sincerity in that offer, those people would first and foremost be carved out on any punitive surtax and we probably would have more employment. I wanted to make that point. I will join anytime, anyplace, anywhere with the leader to work on creating jobs because that is job one for the United States of America. I was a small businessman for 33 years, ran a small business for 22 years. I understand the heart and soul of small business. Today I come to the floor to talk about two small businesses in Georgia and the effect of regulation on those small businesses and the decisions they have made this year that impact employment and the economy. One is a lovely lady named Susan Kolowich. Susan is a dear friend of my wife's. My wife worked for her for 13 years, has not worked for her in the last 5 or 6 years. She opened a shop in East Cobb County, in Marietta, GA, 23 years ago called C'est Moi--``It is I.'' She loves France. She would go to France every year and buy, and she would bring back gifts which she sold in her gift shop. It was a successful small business for 23 years, so successful that her husband Jim, who had been a Subway sandwich shop owner, decided to open a restaurant called Cafe de Paris and join it with her C'est Moi shop so people could come and shop and eat and get a flavor of France. For 10 years he ran the restaurant and for 23 years she ran the store successfully. It was difficult in the last 3 or 4 years because of the economy, but they stayed in business. But finally she threw in the towel and sold the company. She sold her shop, and Jim, her husband, sold his restaurant. They sold them because they were up to here with the oppressive regulation of our government and the continued threat of things exactly like the surtax on their small business at a time in which sales are very difficult. That is not an abstract story, that is the truth. I am sure it is happening in Mississippi, and I am sure it is happening in Wyoming. Let me talk about a little bit larger small business, Hennessy Jaguar and Hennessy Land Rover over in Atlanta, GA. One of the principals in it is a guy named Steve Hennessy. Steve is a good friend of mine. On January 3 of this year, I went to the OK Cafe in Atlanta to join a couple for a meeting about some legislation. It is kind of the watering hole for breakfast in Atlanta. Everybody who is anybody kind of goes there. It is a great place to eat. When I walked in the door and walked past the cash register, where you can see out into the cafe, to see if my guests I was going to meet with were there, Steve spotted me. I was not going to meet with him. He jumped up and said: Johnny, I need to talk to you now. He ran across the restaurant. I thought he was going to give me a bear hug, he looked so excited. He got up close, and he put his index finger right on my chin. He said: I just fired a salesman and hired two compliance officers to comply with the credit requirements of Dodd-Frank. So regulation did create two jobs. It created two compliance officers, but it cost a salesman. Well, if you are punishing the salesman and rewarding the compliance officer, the economy is going to go straight down because you are punishing productivity, you are punishing job creation for the sake of regulatory compliance. Now, some regulation is good. I believe our job as legislators is to see to it that we mitigate risks for the American people. But this administration appears to think its job is to eliminate risk. Well, if you eliminate risk, you stay in bed--when you wake up in the morning, you stay there until night, you do not do anything because you do not take a risk. Capitalism is about risk. Risk and reward are about our economy. So when people talk about regulatory oppression, those are two stories in Atlanta, GA, where regulation has actually caused two businesses to be sold and jobs to be lost and another business to hire two people to comply with government regulation and fire someone who was in sales. It is backward at best, and it is wrong. So I say to the leader, who did make an acknowledgement that he wanted to mitigate regulation, let's sit down and let's find out what we need to do. Let's call a timeout. Let's do what Senator Collins from Maine said. Let's take a timeout for a year. Let's try to digest and absorb the regulations we have passed without continuing to put more threatening regulations on top of businesses at a time when we have 9.1 percent unemployment in America, and in my State we have 10.2. It is time for us to be proactive on taking the shackles off American small businesses, not threaten them with surtaxes and not oppress them with regulation. Instead, let's work to empower small businesses to help us come out of this recession. I think my dear friend Senator Barrasso, the physician from the great State of Wyoming, wants to address precisely the same subject I am.

Mr. ISAKSON. The Senator from Mississippi jogged my memory, and I want to jog his. He was in the House of Representatives in 1994, if I am not mistaken. I got here in 1999. But I remember the first year of the Clinton administration, when they put a luxury tax on yachts, yacht construction went out of business and thousands of jobs were lost. I don't know if Trinity is a sub S, an LLC, or a sole proprietorship, but it is probably one of those three types of corporations, and I am sure it is a small business. They are going to have a 5.6-percent surtax on their income because of what is in the proposal of the President, which is, allegedly, to pay for a jobs bill. So this is deja vu all over again. The administration is imposing more taxes to pay for government jobs that take money out of the pockets of small business that creates the jobs in America. Trinity Yachts--and I will do some research to find out if that is true, because I don't know the company--I will bet is one of the ones that pays their taxes as if they were an individual, and they would be affected by the tax the President is proposing, just like the yacht industry that was put out of business in 1993 because of the Clinton tax. So the Republicans took over in 1994 and reformed the Tax Code and cut Federal spending.

Mr. ISAKSON

Mr. ISAKSON. I ask that all time be yielded back.

Mr. ISAKSON

Mr. ISAKSON. Yes, that is the intent.

Mr. ISAKSON. Yes, that is correct.

Mr. ISAKSON. Yes, that is correct. Peace Corps volunteers need contact information for 24 hour access to the Office of Victim Advocacy, and this is what we intend by a hotline.

Mr. ISAKSON. I agree with the Senator.

Mr. ISAKSON. Yes, that is what we expect.

Mr. ISAKSON. The Senator is correct.

Mr. ISAKSON

Mr. ISAKSON. It is a good time for me to repeat what I said at the beginning. I am proud to be building on the success of No Child Left Behind, and I am proud that Senator Alexander has taken leadership on this committee to move forward on this reauthorization of IDEA and No Child Left Behind.

Mr. ISAKSON. Mr. President, I thank the great Senator from the State of Tennessee for his recognition and whose own record in education is quite distinguished, including his tenure as a university president at the University of Tennessee, to his leadership on the Health, Education, Labor, and Pensions Committee, and, obviously, his service as Secretary of Education for the United States of America. I appreciate the reference to 10 years ago when we wrote No Child Left Behind. There were nine of us, five Republicans and four Democrats, who locked ourselves up in the House Education Committee offices for about 6 weeks writing the document that became the law of the land, and it has served the country well for 20 years. A title I provision of that is the free and reduced lunch provision, which is the main title of the Elementary and Secondary Education Act, and it is the main title that delivers educational entitlements, requirements, and regulations under No Child Left Behind. The reason I am the principal sponsor of the removal--not the removal but the reform--of title I is because No Child Left Behind requirements under title 1 have worked and it is time to go to the next step. I wish to be very specific about saying it has worked. As everyone knows, adequate yearly progress, or AYP, is the goal of title I, to see to it that every child every year is making adequate yearly progress toward improvements in reading comprehension and mathematics. When we started AYP, we knew when we wrote it that if the bill worked, it would become harder and harder and harder to reach AYP because the baseline was being built every single year. The reason Senator Alexander talked about so many schools falling into ``needs improvement'' is because we pushed the achievement level so high that meeting AYP on a continuing and improving basis is difficult. So it is time to terminate AYP as a requirement of the bill, but it is not time to throw out the system that made it work. Disaggregation of students, first of all, was critically important. Public education in the United States prior to the No Child Left Behind law exhibited school systems and schools that basically hid behind mean average scores or an ITBS mean average score. This comparison of ITBS test scores to other States in the Nation is an aggregation of all students' performance and an averaging of that performance. It took the eye off the ball and the individual student. So what No Child Left Behind says is, test every student and disaggregate them by sex, race, disability, by non-English-speaking, and rate each disaggregated group by AYP. If only one school fails to make adequate progress, then the whole school goes to ``needs improvement.'' So we have a lot of schools labeled ``needs improvement'' while making the best improvement they have ever made. So it is time to end AYP, but it is not time to end disaggregation or the test scores. The greatest accountability measure--and all of us as politicians know it--is transparency. This bill will require the transparency of all the test scores of each individual child and the transparency of each individual in each individual disaggregated group to ensure we continue to know how our kids are doing and compare them on a year-to- year basis. But we do away with ``needs improvement'' because it has served its purpose. Now, on disaggregated groups there is one other thing the title I change does that I want to particularly emphasize on the Senate floor today. The biggest disaggregated group in terms of causing schools or systems to fall under ``needs improvement'' is those special needs children considered under IDEA or the Individuals With Disabilities Act. They are all individuals who have an individual disability that affects their academic achievement or their ability to learn. When we passed IDEA in 1978, if I remember correctly, through Public Law 94-192, we dictated that we would give special emphasis and training to those special needs kids and try and identify their special needs and meet them within the public education system. When No Child Left Behind disaggregated them into a single group and tested them, we tested 98 percent of them with the same paper and pencil test. These are kids with a plethora of disabilities that one single test could not possibly meet. We gave a 2 percent cognitive waiver, disability waiver, so they could have an alternative assessment for up to 2 percent of the students, but 98 percent had to take the same test. This reform of the IDEA portion of title I of No Child Left Behind simply says this: Every year, at the beginning of the school year, when the parent and the teacher and the school meet to put out the individual education plan, the IAP for that student, the parent, the teacher, and the school will determine what the assessment vehicle is that best measures the assessment of that child--not a single, one- size-fits-all, paper-and-pencil test. That is going to ensure that IDEA students get the individual attention they deserve and the measurement against the individual disabilities they have that is appropriate as approved by their parents, their teacher, and their school, and it will make a remarkable difference for IDEA kids. I am very proud of that provision and the flexibility it gives to the system to assess appropriately rather than force a one-size-fits-all test against 98 percent of our children with disabilities. So to repeat what I said at the beginning----

Mr. ISAKSON

Mr. ISAKSON. I thank Senator Blunt. I thank Senator Johanns for organizing this colloquy. I represent a State that is home to the second largest port on the eastern seaboard in the United States of America. The port is Savannah. We are talking about creating jobs in America. The port of Savannah directly employs 300,000 people in the southeastern United States. Can you think of what an impact this is going to have to increase that employment if we get these free trade agreements? Let me give you an example that is amazing. South Korea surpassed Japan in 2010 as the second largest Northeast Asian destination for South Atlantic exports behind only China--second largest in all of Asia behind only China--most of that going out of the port of Savannah, most of that being agricultural products from your State and from your State and from mine. Senator Portman talked about pork. In Georgia it is all about chickens and cattle. We are No. 1 in poultry, and South Korea is a huge importer of our poultry. They would be a lot bigger with a free trade agreement. Let me give another number that is chilling. South Korea's imports from South Korea into the United States went up by 26 percent last year. Our exports to them went up by 15 percent. That is an 11-percent negative in the trade deficit, which causes us tremendous problems.

Mr. ISAKSON. Madam President, I ask for unanimous consent for 5 additional minutes to close.

Mr. ISAKSON. So my point is very simply this: We can help to balance our trade deficit. We can help to increase employment in the southeastern United States. We can help poultry, we can help pork, and we can help beef. It has been 968 days since the President could have sent us these free trade agreements, and he has not. My point in this debate is very simple. There is one person in the United States of America standing between us and more job creation, and it is the resident of the White House, President Obama. I wish to turn it over to the organizer of this event, Senator Johanns.

Mr. ISAKSON

Mr. ISAKSON. Mr. President, I commend the Senator from Connecticut on his remarks and, particularly, his closing. I associate myself with what he said. I will support this bill when it comes to the floor at 12 o'clock today. On Saturday, I came to the floor at 2 o'clock out of frustration and made a speech critical of the negotiators as we were letting the clock run and had no deal. I was critical because we had pretty much had an agreement we were going to cut. We pretty much had an agreement we were going to establish a select committee to do the cutting. But we had not agreed to a balanced budget amendment. We had not agreed to an enforcement mechanism on the committee to make sure they did the cutting. Probably most importantly of all, we had not agreed to triggers on the debt ceiling increase for accountability. I come to the floor today not frustrated but feeling somewhat rewarded because on the three solutions negotiated to those three component parts of this particular piece of legislation, the genie is out of the bottle, and history is about to be made. No. 1, on the debt ceiling increase, when the trigger was finally established, it means from now on whenever this debt ceiling increase is asked for by a Republican or Democratic President, it will be demanded that there be spending cuts commensurate with any increase. That is historic. That is the first step in the right direction of sanity, accountability, and fiscal responsibility. Secondly, they finally came together and agreed there would be a balanced budget amendment vote in the House and the Senate before this year end, with incentives for us to vote for that balanced budget amendment. For the first time since 1995--the first time in 16 years--the Congress of the United States will be debating, forcing itself to do what every American family has to do. There is not a family within the sound of my voice who has not had to sit down in the last 3 years in this country-- because of our recession and our economy and because of spending--and reprioritize how they spend their money to balance their budget, to live within their means. It is about time the Congress of the United States asked of itself what it imposes on every family in America. As far as the select committee, there was a fear among many that it would only be a paper tiger; that it would not have the claws or the teeth to actually do what it needs to do on the cuts. While I would have done a different type of sequestration, I commend those who negotiated this sequestration on putting one in that has enough teeth and enough fear to force this select committee to do what it needs to do. Today, when I vote in favor of this agreement, I will be voting for us to cut spending where we need to--not as much as I would have liked but a lot more than we have ever seen before--but, most importantly, voting for the assurance that never again will a debt ceiling go up without a debate for commensurate cuts in spending. That is important. I will be voting for this because we will have a balanced budget amendment on the floor of the Senate and on the floor of the House of Representatives that we have long needed since the last one failed 16 years ago. And we finally have a sequestration mechanism or an enforcement mechanism to enforce the select committee to do what it is charged to do in this particular legislation. My frustration I expressed on Saturday is gone. My pride in the Senate is restored, and I look forward to casting my vote in favor of this agreement at 12 o'clock today. I yield back.

Mr. ISAKSON

Mr. ISAKSON. Mr. President, as I understand it, we are allocated 30 minutes each. But I have no objection to the Senator having 5 additional minutes as long as 5 additional minutes are added to the Republican side.

Mr. ISAKSON. Mr. President, today when the Chaplain opened the Senate, he prayed for divine guidance to end the paralysis of analysis in Congress. I thought it was an excellent point. When I heard the two leaders speak today I realized where that paralysis was. We were paralyzed by analyzing our differences and failing to look at what we have reached common ground on already. I have been worried about a default on our debt for some time, but right now I am worried about Congress defaulting on our country. Failure should not be an option for us in this case and it is time we started finding common ground. So for the purpose of discussion, I want to put forward some thoughts about where we agree, some identification of where we do not but where we could be. We have already agreed, in one form or another--whether it was the Vice President's group or the Speaker's group or whoever--that we ought to have a $1 trillion downpayment in initial cuts to bring about deficit reduction. There is common agreement between both sides in the Senate and I think in the House as well that we need a short-term committee, equally divided in a partisan way, to come up with at least another $1.8 trillion that results in reductions in debt and in deficit. We have agreed on those two things. Third, we have agreed we do not want to default on our debt. There may be a handful of people around here who think that is a good idea, but with all due respect it is not a good idea and the ramifications of default are already showing themselves in small measures in the market but will show themselves a lot greater next Wednesday if we fail. Where do we differ? We do not differ on raising the debt ceiling, we just differ on when we raise it, how we raise it, and how long we raise it. The President favors raising it past the election in November 2012. There are others who want to have votes every 6 months or 10 months. Frankly, there is something to be said for waiting until after the November election of 2012 so we have 18 months of stability and predictability in the United States of America; there is not the uncertainty of us coming back. There are a lot of differences on the other side about whether we have a constitutional amendment on the balanced budget vote. Frankly, I cannot understand why in the end anybody would reject both bodies being able to have a vote in regular order on a constitutional amendment to balance the budget. We are supposed to vote. We are supposed to confront those decisions. I think an agreement could be reached between those two differences that would ensure us moving closer to an agreement on the entire package. Third, and probably toughest, we do not disagree on the committee that is appointed to find the $1.8 trillion or better in savings or cuts, but we disagree on the mechanism with which that is enforced. I want to talk about that for a minute. There is a fear--and a lot of it is justified because of the way we are acting right now--that if you had a committee of 12, 6 Democrats and 6 Republicans, charged with finding $1.8 trillion or more in reductions, they would never agree; therefore, they would be gridlocked; therefore, those reductions would not take place. I understand that fear and agree with the concern for that fear. So we need a mechanism where there is a risk for them to do that. One of the discussions that has been floating around--last night it was in a discussion I had with the officer presiding right now--is you should allow the Congress itself to create a committee with an equal number of Democrats and Republicans of some accountable number, such as 10 or 20, to come together. If the committee fails to make its recommendations and make alternative recommendations, that must by requirement of the law be voted on on the floor of the House and Senate. If for some unbelievable circumstance that did not happen, there has to be an absolute fail-safe to ensure that failure is not an option. I have suggested automatic sequestration. I know that causes heartburn with some. But somewhere there is a silver bullet. The Lone Ranger had it. Tonto had it. Wyatt Earp had it. Why can't the Congress find it? Why can't we find the majority bullet that is the enforcement mechanism that ensures we come together on the $1.8 trillion or more? If we do those things, we have an agreement. We have already agreed in principle on most of them and we understand our differences on the ones we have not agreed on. We ought to be spending the next 24 hours finding out where our differences are and coming to find common ground because we are not that far apart. I want to go back to the prayer of Barry C. Black this morning. I listen to his prayer just about every morning because it is very insightful. In fact, there is a clear message in it and he is usually talking to all of us because he watches all of us and he is concerned and I am concerned. I have three children and nine grandchildren. I said in my campaigns the rest of my life is about leaving them a country as prosperous, free, and great as the country my parents left me. If we blink on this issue before us, that is not going to be the case. There is irreparable harm that can come from a failure to act. It doesn't harm me as a politician, it harms my kids and my grandkids. It harms those people I know on Social Security and Medicare and Medicaid, and it harms those standing right now on a firing line somewhere in Afghanistan, realizing today could be their last day on this Earth so America could live to see another day. That is how serious the consequences are. I suggest instead of being paralyzed by our analysis of where we differ, let's come to an analysis of where we find common ground. We do on raising the debt ceiling; we know we should raise it. We know we could find $2.8 trillion and hopefully more in cuts in the deficit and spending over time. We know we have to extend the debt ceiling to some point in time, and if it is past the Presidential election of 2012, let's ensure that each body in regular order can vote on a constitutional amendment to balance the budget, which leaves us with one difference, and that difference is what is the enforcement mechanism on the $1.8 trillion cut that the joint committee, equally divided, is supposed to come up with. I submit we can find the common ground to find the silver bullet that causes that to happen and I encourage all of us to forget now where we differ and recognize where we agree and then work on building a bridge on those differences so the United States of America does not default on its debt and the Congress of the United States does not default on its obligation to the people of the greatest country on the face of this Earth, the United States of America. I yield the floor and suggest the absence of a quorum.

Mr. ISAKSON

Mr. ISAKSON. Madam President, I associate myself with the remarks of the Senator from South Dakota. Before coming to the floor this morning, I returned 2 phone calls I received yesterday out of 2,000 that came into the office. I picked those two because they were people I have known for a long time but haven't talked to in a long time, and they have never called me in my capacity as a Senator. Both of them are businesspeople, both are neighbors, and both had the same message: the uncertainty that Congress and this administration is now causing in terms of our inability to meet the day of reckoning next Tuesday, when we must do so, is beginning to impact their business, their philosophy, their investments, and their country. What we are doing as we almost dilly-dally around, putting off a final decision, agreeing to not agree on anything is we are making the situation worse. I think the reports in a couple months will show economic activity in July will show America is slowing down, economic activity is slowing down. That is because Congress and this President cannot get their act together. History and facts are stubborn. I wish to go over a 2-year history of this debt ceiling crisis because, for years, we have known it was coming. For 2 years, we have talked about it. In fact, a little over 18 months ago on the floor of the Senate, Republicans and Democrats passed a deficit commission amendment, which made it successfully through Congress, was signed by the President, and that deficit commission was created. It was charged with coming up with a solution for our rising spending problems, reduction of the deficit and debt over time, better management of our fiscal policy, and getting Congress's act together, where it could vote up or down on a proposal. That became known as the Simpson-Bowles proposal. It would cut $4 trillion in spending over one decade, reform our tax policy, and weed out a lot of bad things that have been in there for a long time. What happened is, when it came out in December, the President rejected it out of hand. I am not being partisan, because a bipartisan group of people offered that proposal. I was one of the five Republicans who voted for it on the floor. I thought it was a conscientious way to address the debt and deficit and the problem we faced. For some reason, unbeknownst to me, the President rejected it out of hand. All he had to do was send it to the Senate for an up-or- down vote, and we would at least have begun the process of dealing with the debt and deficit. Instead, he rejected it out of hand. In the months preceding this debate today and this coming Tuesday when we run up against the debt ceiling, we have had other legislation come to the floor or from the House that has been rejected out of hand. The cut, cap, and balance legislation, which I voted not to table last week, the majority leader decided to not even discuss but to make a motion to table it. But that was a conscientious way to deal with our deficit and debt over time. It was a disciplined process that said we need to make cuts now and begin the process--$51 billion--and watch our spending in the future based on historical spending averages, and we ought to give the American people a chance to say: Does America need a balanced budget? Instead, the Senate tabled it, when we had a chance to say just say yes to solving our problems, and we just said no. Last night, Speaker Boehner's bill, which was to be voted on today, was pulled off because of a revenue estimate produced by CBO. I hope that will get worked out and will pass the House and will come back to the Senate. It is about time for us to say just say yes to something instead of just saying no. I wish to talk about the consequences of just saying no for a second. The longer we say no, the longer we send uncertainty into the world markets and our own markets, the worse our problem will be. Our tax system is based on Americans being prosperous. As America prospers, as we have better economic activity, our revenues go up--not because we raise taxes but because we raise expectations. We are now lowering expectations in America. The two businesspeople I talked to this morning said they do not know what to do. Quite frankly, I didn't know what to advise them. I ran a company for 22 years, and I know the worst thing about running a business is to have uncertainty in terms of which way to go. So it is my sincere hope everybody will come together and realize no is not an option. We need to say yes. If the President has a plan, bring it. If the House passes their plan, let's vote for it on the Senate floor. But let's move forward because the price and the cost of uncertainty is destroying what little economic vibrance the United States of America has today. Let's raise the expectations of our people. Let's raise the productivity of the Senate and the Congress and this President. Let's sit down at the bigger table of common sense and find a solution, and let's find it now. Madam President, I yield the floor.

Mr. ISAKSON

Mr. ISAKSON. While the distinguished chairman of the Commerce Committee and my dear friend from West Virginia is on the floor, I wanted to illuminate a little bit of the difficulty on the FAA reauthorization. I share concern with the chairman, as he knows, because we talked in the well last night about our desire for a reauthorization of FAA and how important it is to our economy. But the difficulty between the House and the Senate, in part, has been over the House version as it treated the National Mediation Board versus the Senate's unwillingness to consider any change in current status with the NMB. I have been the negotiator or the runner, or whatever you want to call it, between the two bodies, Mr. Mica and Mr. Rockefeller. As the chairman knows, about 1 month ago I delivered Leader Reid a comprehensive list of requests the House had asked for in the reauthorization. Senator Reid and his staff, after pondering it for a few days, responded that they would not agree to any of the changes that were requested. I then went back and said, well, let me see what I can do to try to find some common ground, and came back with a recommendation I gave to Chairman Rockefeller that said give judicial review to the airlines, which the unions already have under the National Labor Relations Act, to have a balanced treatment in terms of a response in terms of NMB regulation. As it turns out, that was an unsatisfactory offer. The House I think still insists that some provision addressing the National Mediation Board should be included in the authorization, and that--and if I am incorrect in any way, please, Mr. Chairman, correct me--I think that is the primary difficulty in getting to a final conclusion. From my standpoint, I want everybody to understand clearly, I agree with the chairman that we need a reauthorization. But I also think we need a balanced playing field with NMB, and I continue to work to try and find some common ground to see to it that the aviation industry can have judicial review, just as the unions already have, with regard to NMB regulations and NMB rulings. I wanted that to be documented in the Record. I thank the chairman for letting me have a little time. I yield the floor.

Mr. ISAKSON

Mr. ISAKSON. Mr. President, I rise in support of H.R. 2560, the Cut, Cap and Balance Act. I have been watching the debate on my TV back in the office this afternoon, listening to the arguments made pro and con, and thinking to myself that back home in Georgia there are a lot of folks who live around me who are scratching their heads wondering why cut, cap, and balance is such a bad idea because they have also had to cut, cap, and balance. The call I left before I came here to speak on the Senate floor was from a minister and his wife whom I know. They are retired. Both of their daughters are married and live away from Georgia. Both of them have been in financial difficulty, and both are on the brink of losing their homes. Through the counseling of the minister and their support, they counseled and showed them where to cap, cut, and balance so they could make their mortgage payments and not lose their homes. Americans have had to do that all over the country. The present economic situation mandates that. There are no excuses with the IRS or bill collectors or people with whom you may do business. If you don't pay, there are consequences. America as a country must ask of itself what we impose and ask of every citizen in our country. I think also there are probably a lot of members of the Georgia Legislature who are watching this debate and scratching their heads. In my State, in the last 4 years we cut $5 billion--from a $22 billion budget to a $17 billion budget. Do you know why? It is because our Constitution says we have to have a balanced budget. We can't borrow to pay for everyday operations, and we must live within our means. We have had to cut, and a lot of those cuts have been painful. Many States are coming back now. There was an article the other day about States that are coming back and showing future months of growth in revenues and in their income, and even looking to surpluses that will come in the years to come. Why? Because when they had to do it, they balanced their budgets and capped their expenditures, and they did what their Constitution requires. This proposal tells us, first of all, to make cuts that would materialize early of about $51 billion. It would be a downpayment on the process to continue the cutting process to reduce our deficit and our debt. It has a formula for capping expenditures in the future, going from 21.7 percent of GDP to 19.9 percent of GDP which, by the way, falls within the realm of the last 40-year average, until the last few years when we have gone from 20, 22, 24, to 24.6 percent of GDP. It is not unreasonable to ask us to impose upon ourselves a cap consistent with the averages of our past. Remember this: As we get our arms around our spending and live within our means, business will prosper, revenues will go up to companies, taxes will go up, and that percentage of GDP will give us a broader margin. It is only when we are in a declining economy, a recessionary environment, where revenues go down, that caps are hurting a lot because we are not empowering business, profits go down, and revenues go down for the country. On the balanced budget amendment, this provision leaves room for negotiation between the bodies as to what the caps will be in the balanced budget amendment, whether it would be a supermajority of 60 or 67 to raise taxes. It is a realistic approach to cause us to sit around the table in Congress and negotiate what is wrong for the country. If it is right for almost every State in our Union to have to balance their budgets, to cap their spending, and to limit their borrowing, it should be right for us. This proposal is right for America. It is basically what we require of our citizens. It is now time we required it of ourselves. I am proud to join my fellow members of the Republican Conference of the Senate to vote for a new discipline for America that cuts excessive spending, caps wasteful spending, and, over time, allows us a roadmap to have a balanced budget and a GDP ratio to expenditures that is doable, workable, and historically justifiable. I yield the floor.

Mr. ISAKSON

Mr. ISAKSON. Mr. President, I commend the Budget Committee chairman on his contribution to this debate and his contribution to our country. I enjoy listening to his remarks and appreciate many of the ideas he has offered today. I rise to talk about an anniversary today--no, it is not my anniversary or his but the anniversary of Dodd-Frank, which passed a year ago today. This morning at a press conference, Barney Frank, then-chairman of the House Banking Committee and the Frank portion of the Dodd-Frank legislation, gave a speech before the National Press Club. In it he made some comments that are very important, and I wanted to share my agreement and support for some of the things Chairman Frank said. I did not vote for Dodd-Frank when it passed 1 year ago, but I did, along with Senator Hagan and Senator Landrieu, offer an amendment which was adopted by the Senate and ultimately agreed to by the House in the conference committee. It was an amendment known as QRM, qualifying residential mortgage, an amendment to carve out an exemption from risk retention for a well-underwritten mortgage loan. The Dodd-Frank bill, as many in this room will remember, originally called for a total 5-percent risk retention on every residential mortgage made, which would have eliminated many people from making any residential mortgages at all. Ranking Member Frank today in his comments said: Well, we had a 100-risk retention prior to 1994. He is right. That is when savings and loans made loans, and that is when the Federal Government insured the others, and savings and loans had preferential interest rate treatment so they could make preferential payments to people to save in their institution versus the bank. But the Federal Government took away the one-quarter percent differential that savings and loans had and the banks became competitive with savings and loans for short-term and long-term deposits of savings and all the savings money flowed to the banks that offered other products. So savings and loans went out of business. When they did, there was no residential mortgage money, at least no conventional money, available in America. So what happened? The securitized market began. Freddie and Fannie began to play a significant role in providing conventional residential mortgage money. Until the collapse, which began in 2006 and culminated in 2009 and we still are suffering from today--until that collapse, securitization was a very reasonable and safe way of raising capital for mortgages. What happened in the mortgage collapse was not a failure of equity or skin in the game by the borrower; it was the collapse of underwriting. Mortgage lenders got into loosey-goosey underwriting--subprime credit. They made loans to people who were higher risk in order to price it at a higher rate, and they blurred qualifying requirements to where, all of a sudden, if you walked in and fogged up a mirror with your breath, you could probably get a mortgage loan and they could probably securitize it. Dodd-Frank was designed to see to it that didn't happen again, and I commend them for it. But as government often does, sometimes it goes too far when the pendulum swings back the other way. Thus is the dilemma we are in today, as the rule being proposed by the FDIC, the Federal Reserve, Comptroller of the Currency on the QRM rule is going to require, in addition to quality underwriting, a minimum 20-percent downpayment. For years in this country we have had 90 percent and 95 percent conventional financing or, in terms of FHA, 3.5 percent downpayment and VA none at all. There have been various varieties of downpayments that have been allowed based on the loan and its insurance. But with this rule of requiring risk retention on any loan with a downpayment of less than 20 percent, except for an FHA or VA loan, it is going to literally destroy what is left of the residential housing market because it will extract what is probably 40 to 45, maybe 50 percent, of the current market today. Senator Landrieu, Senator Hagan, and myself in QRM proposed that people have a qualifying ratio of debt to income that is sufficient to amortize the debt, a third-party verification they have a job, a credit score that indicates they are willing to pay their payments, an appraisal that indicates the house is worth what they are paying for, and a downpayment with mortgage insurance required if the downpayment was less than 20 percent. Today, I wish to quote Ranking Member Frank. When talking about risk retention, he said: I am troubled because there is an assault now on risk retention--Barney Frank--adding that even though he believes the 20 percent requirement in the QRM rule being circulated is too high. When asked further what would be a good downpayment, he said at least 4 or 5, something above FHA. I wish to commend the ranking member because he is precisely right. Although he in his original intent with Dodd-Frank did not want to bifurcate residential qualifying mortgages by some having risk retention and some not, he recognized the importance of doing some of that bifurcation and having some exception to risk retention. They would have realized that anyway, if you recognize they exempted Freddie Mac, Fannie Mae, and FHA from the requirements of Dodd-Frank and left them solely on the conventional market. So I wish to thank Congressman Frank today for his comments as they related to QRM and his identifying the downpayment requirement currently being circulated is entirely too high. It is entirely too high, and it is very important that we get the final rule, which will be published on August 1, to have a reasonable downpayment of 5 percent or more, rather than 20 percent or more. Five percent or more will ensure there is skin in the game; and with the other qualifying and underwriting provisions in QRM, it will ensure that quality residential mortgages are being made. I am not one to offer advice often to the President. He is the President. He can do as he wishes. But today in Politico there is an article about the President is now returning to revisit the residential housing market because he understands employment is not coming back until housing comes back; he understands the American dream is, for some people, now the American nightmare; and he understands what has been done so far has not been working. I wish to suggest to the President that if he thinks what is happening now is a nightmare, you just wait until this QRM rule that is being circulated now actually goes into effect. Without it being changed and a continued requirement of a 20-percent downpayment, you will have a further lack of demand in the housing market, which already is almost at least anemic, if not feeble, because most Americans who want to buy a home can afford 5 percent or maybe 10 percent down, but they can't afford 20, and that is middle America. If you pull them out of what is already an anemic housing market, you would have no housing market at all. So as this Dodd-Frank rule is being circulated in the next 2\1/2\ to 3 weeks before it is finalized, I hope we can all keep up the drumbeat for the regulators to be reasonable in their approach--understand risk retention is important but also understand home ownership is important and understand we had a collapse that was not downpayment related. We had a collapse that was underwriting related. So if you have strong underwriting and minimal skin in the game of at least 5 percent, you have a qualified residential mortgage that does not have to have risk retention; therefore, you will have enough capital raised in the mortgage markets to fund a housing demand which hopefully is going to continue to grow. In the absence of securitization, in the absence of an exemption of risk retention for a qualified residential mortgage, there will be no housing market in the United States of America. FHA is already under so much stress and duress, it is awful and it is frightful. The Veterans' Administration is a privileged loan for those who have served and made the ultimate sacrifice for our country, and they deserve it. Freddie and Fannie are exempted because we have them in conservatorship. But they are not going to be a source of money for long. Something will have to replace them, a new entity, probably something with securitization. But if the QRM rule being circulated now does, in fact, go into place as it is written, with a minimum 20- percent downpayment, it will be the last nail in the coffin of the American housing market. The unintended consequence of reaching too far to react to the terrible crisis which we had will put the death knell of the housing market squarely on the shoulders of this Congress, this administration, and these regulators who are currently carrying out those rules. I wish to commend Ranking Member Frank on his comments today, his recognition that the QRM rule being circulated asks too much, recognizing that a 5-percent or greater downpayment is a reasonable approach and recognizing that underwriting is the important key to see to it that we have a housing market. I commend the gentleman from Massachusetts. I thank him for adding that comment today to the National Press Club. I hope the regulators, the FDIC, the Federal Reserve, the Comptroller of the Currency, and the Treasury heard it too. If they didn't hear it and they remain silent and continue with 20 percent, they will be doing exactly the opposite of what the President of the United States stated he wants to do; that is, bring the housing market back in America. I yield back.

Mr. ISAKSON

Mr. ISAKSON. Madam President, I rise this morning to talk about the meeting tomorrow the President has called at the White House--a summit, I think it has been referred to, one for which I have great hope. I hope it will be a summit where both sides leave their weapons at the door, sit across the table from one another, and begin talking about a comprehensive solution to a comprehensive problem. The solution to that problem, though, does not lie in creating villains and enemies. In the last 2 weeks, we have heard a lot of rhetoric coming from the White House demonizing people who have corporate jets or demonizing people who make over $1 million. I was reminded in this debate about millionaires in the debate in 1969 in America. It was one of the first debates I ever watched. I had returned home from the service, I had begun my business, and a report came out in the newspaper that 155 Americans who made over $1 million paid zero taxes. I personally was astounded. Everybody else was astounded. Congress went to work to close the loophole, and they did it by creating something known as the alternative minimum tax--something to make sure someone who paid no tax at least paid ``their fair share,'' and I put that in quotes. Today, it is not 155 millionaires who are paying the alternative minimum tax; 34,200,000 Americans are, because oftentimes when Congress goes to target one person, they catch everybody in a bigger loop. I do not think we need to demonize those who employ Americans, those who create the jobs, those who make our economy run, any more than we should villainize people who want to try to save Social Security or Medicare. The President in his two speeches last week targeted millionaires, he targeted job creators, he created villains, and he created enemies. None of that will help us to solve a problem. Now, the President is not the only one playing that game. A little bit of criticism can go to both sides. As we look at this chart that has been on the floor in the last 2 weeks about what has happened in the last 30 months since the President was elected as to critical things, unemployment is up by 1.9 million people--17 percent in terms of the rate--gas prices are almost double, and the Federal debt is up 35 percent. But, remember, it was $10 trillion when the President was elected, so it is not just the President's fault, but he is making it worse. Debt per person is now up by $11,258, and health insurance premiums are up by almost 20 percent. In fact, the only thing that is down in the last 30 months is the expectations of the American people--expectations of what our future is going to be like. So for a moment I would like to offer some historical suggestions as to what both sides can do tomorrow at the White House, when they leave the weapons at the door, sit at the table, and really begin to negotiate. One is to look back in history when we have had big problems and we came up with big solutions. The 1980s is a particular time. I was in the State legislature then. I followed what was happening in Washington. In fact, when I was 39 years old in 1983, Ronald Reagan and Tip O'Neill had a meeting at the White House. I was not there, but allegedly it went something like this: The President said: Well, Social Security is going broke in about 20 years. We just got that report. We need to fix it. O'Neill said: I agree. The President said: I am willing to work on it, but I am not willing to raise the tax. O'Neill said: Well, I am willing to work on it, but I don't want to cut the benefit. They looked at the Actuary and said: What do we do? The Actuary said: Well, you push the eligibility out, and you get the system back in actuarial soundness. I was 39 in 1983. I would have been collecting Social Security at the age of 65 in 2010. But because Reagan and O'Neill got together, they pushed my eligibility out by 1 year to age 66, not age 65, and now incrementally it goes up 2 months a year to age 67 in a few years. That put the system in actuarial soundness for 67 years. The reason it is now all of a sudden in trouble again is the protracted economy, and these difficulties have caused people--baby boomers--to now go to the bank of Social Security and collect early Social Security at age 62. So we have had a rush to Social Security because of the unemployment and the uncertainty in our economy. But Reagan and O'Neill fixed Social Security by pushing the eligibility out. They did not raise the tax, but they did raise the ceiling upon which it was levied. I think it is interesting politically--I note the President should understand and all of us should recognize--the next year was 1984, and President Reagan won 49 of 50 States, a year after he fixed Social Security. So I do not think we ought to demonize people for trying to solve the bigger problems of our debt and deficit. Everybody in this room knows you could cut every discretionary dollar out and you would still owe $300 billion in the deficit. The only way we are going to fix Social Security and Medicare is if we are going to fix the debt and deficit. On Medicare, I was disappointed that when Paul Ryan in the House came up with a forthright plan, he was immediately demonized. In fact, he was invited to the White House and criticized face to face at a conference the President had. That was just for trying. It is about time all of us start trying, we start trying to find common ground, we start to look at our solutions in a comprehensive way. It is a time where we stop calling names and instead we start calling numbers, we start looking at what it is we can do within our control to put our spending back in line, amortize our debt over time to a reasonable amount, and reduce our deficit over time. It is not going to be fixed with one stroke of a pen or one single piece of legislation, but it is going to begin to be fixed when both sides sit down at the table and understand that this is the fourth quarter of the ``major super bowl'' of the future of the United States of America. Continuing to shoot each other and throw bricks and bats and create victims and create enemies and not talk about the real problems is just making it worse for all of us. It is time we made it better for the American people. I spent the weekend with the American people who live in the State of Georgia celebrating our independence on the Fourth of July and spending some time with five of my nine grandchildren. I remember Saturday night watching my grandchildren play in the den, looking down at them. They were not looking at me. I was just watching them play, and I thought about their future. I thought about what their future was going to be like in a country that ran unlimited debt and deficits, that inflated its dollar, lowered its expectations, and was not the America I had been fortunate enough to live, work, and be born in. Recognizing my age and my time, I know my future--the years I have left--is all about those children and those grandchildren. I want to be a part of the solution for the problem today but a part of their expectations for the future. I do not want them to look back and say: Granddad made it worse. I want them to look back and say: Granddad made it better. Tomorrow is an opportunity for the President of the United States to lead. He has templates with which he can lead. He can either choose to take isolated enemies and isolated arrows and shoot them at people or he can, instead, look back at his deficit commission. His deficit commission, which I voted for, by the way--I was one of the Republicans who voted for the creation of the deficit commission--came back in December with a comprehensive recommendation that should have come to the floor for debate. It dealt with Social Security. It did not deal with Medicare. It dealt with the Tax Code. It dealt with spending. It dealt with expenditures. It lowered tax rates and raised opportunity. The President did not even let it come to the floor of the Congress of the United States. He looked the other way. It is time we look straight in each other's eyes and say there are solutions out there that good people of good will can find a way to do, just as Ronald Reagan and Tip O'Neill did. But I do not want to be a part of making it worse. I want to be a part of making it better. I hope those at the conference tomorrow sit down with that type of attitude--we do not create enemies and villains, we do not make it worse, but we begin a platform and a template where in the next 3 to 4 weeks we can begin to amortize our debt over time, reduce our deficit over time, raise the expectations of the American people, and cause a brighter future for our children and for our grandchildren. I yield the floor.

Mr. ISAKSON

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

Mr. ISAKSON

Mr. ISAKSON. Mr. President, I rise for a moment during this time of morning business to talk about what everybody is talking about--the crisis with our debt ceiling, the approaching deadline, and what we should do. Last night, as I thought about what I would say this morning, I thought back to that horrible month of September and October of 2008, when the greatest financial crisis since the Great Depression hit the United States. I was a Member of the Senate, and I was here the night the TARP vote came before us to try to salvage and save the financial system of the United States. That was probably the toughest vote I ever took. It was the right vote, because we stabilized the financial system. At that time, we were reacting to a crisis we were not in control of. Today, we have a crisis we are totally in control of. It is ironic to me that 30 or 35 days before the deadline of August 2, we are fiddling around arguing with each other, when we should be talking to each other, looking at those things we can do to avert a crisis and move forward. I see that our leader has come to the floor. I will shorten my remarks so he can have his full time. This is a crisis of which we are in control, unlike 2008. We can make a difference. The balanced budget amendment proposed by the Republican conference of the Senate is the straitjacket and the discipline we all need. When I was a State legislator for 17 years, we had a program on drug abuse that said ``just say no.'' We taught kids not to use drugs. We need a way for Congress to ``just say no'' to spending, and have the discipline to have a constitutional restriction on our ability to have runaway spending without any accountability. It is the kind of discipline almost every State imposes upon itself. In Georgia, we cannot deficit spend because our constitution won't let us. We cannot borrow more than 10 percent of our entire budget because the constitution will not let us. Those are the types of disciplines the Congress needs. Before I yield to the leader, I will end the way I began. When the financial crisis hit in September 2008, we were dealing with issues over which we had no control. Today, we are dealing with an issue upon which we have total control. It is time to put on the straitjacket--the procedure and process to balance the budget and run our country as every American family has to run its budget. I yield the floor.

Mr. ISAKSON

Mr. ISAKSON. Mr. President, I rise for a moment--and I will be joined shortly by my colleague, the senior Senator from Georgia--to pay tribute to a great American who passed this Earth 40 years ago on January 21, 1971. His name was Richard Brevard Russell, Jr. He was one of the handful of Senators everybody and every historian rates as the finest of the Senate. He was a great Georgian with an interesting past. He was elected to the State legislature in the 1920s and rose to be the speaker of the house of representatives in the State of Georgia. He then went on to be Governor of the State of Georgia from 1931 to 1932. During that time, he served as Governor at the same time another gentleman was serving as the Governor of New York, Franklin Delano Roosevelt. They became good friends. President Roosevelt even became a constituent of Senator Russell's because, with his affliction, the springs of Warm Springs, GA, were where then-Governor, soon-to-be-President Roosevelt would come to heal and get better and thank his good friend, Richard Russell, for his support. It was that relationship that brought Richard Russell to be one of the first Governors in the United States to come out and endorse Franklin Roosevelt to be President of the United States. In his career in the Senate, Richard Russell served with Franklin Delano Roosevelt. He served with Harry Truman--8 years side by side with Harry Truman. He served under President Dwight Eisenhower. He served under President John F. Kennedy. He served under Lyndon Johnson. In fact, in just a minute I will explain why he made Lyndon Johnson who he was. He finally passed away under Richard Nixon's first term as President of the United States. But back for a second to Richard Russell and Lyndon Baines Johnson. Lyndon Baines Johnson became the President of the Senate and later became the President of the United States. In his own works, Lyndon Johnson credits Richard Russell with being the strength of his career as a Senator. In fact, so great was Senator Russell's control of the Senate that in a quote by Powell Moore, his press secretary, a few years ago, he said: When President Kennedy gave advice to newly elected Senators, he said the following: If you want to learn how to be an effective Senator, you should start by going to see Dick Russell. That is exactly what Lyndon Johnson did. So good a friend of Lyndon Johnson was Richard Russell that every Sunday night in their careers in the Senate, Lady Bird would have Richard Russell over at the house to cook him dinner just to thank him for what he had done the week before for Lyndon Johnson. As Lyndon Johnson grew in power, he kept beside him Richard Brevard Russell of Georgia. Richard Brevard Russell of Georgia is the greatest Senator who ever served from our State. Senator Chambliss and I will be the first to tell you, we are way back in the back of the line when you compare our record to his record. He was a great Georgian. He was a great American. When I was elected to the Senate and was asked to pick an office, I said: The only requirement I have is it be in the Russell Senate Office Building because I wanted to serve in the same building, named after the greatest Senator ever to serve from our State. So on the 40th anniversary of his passing, I want to leave this Senate floor by reminding America we had a great Senator from Georgia whose lasting contribution to our country is indelible in the hearts and minds of our people: Richard Brevard Russell, a great American, a great Georgian, and one to whom all of us owe a great deal of thanks and a great deal of credit. I yield back my time.