Jon Kyl

Mr. KYL

Mr. KYL. Mr. President, I certainly respect my colleague from Iowa. Like him, my views on the issue of abortion are very decidedly pro- life, and I too disagree with the decision in Roe v. Wade. I agree with him that many legal scholars believe that decision rests on very shaky legal grounds. But I would say this about Andrew Hurwitz, the nominee who will be before us: Never in any decision he has rendered as a member of the Arizona Supreme Court has anybody I know believed he let his personal views, his personal philosophic or political views determine his judicial rulings. To the contrary, everyone with whom I have spoken, and to the degree I have been able to study his career of about a decade on the Arizona Supreme Court, it is remarkably free of the kind of politics that sometimes infuses judicial decisionmaking. His opinions are well considered, based on the law, well written, and generally a part of a consensus court. There are both Republicans and Democrats on the Arizona Supreme Court, and Justice Hurwitz is usually with his other colleagues on the court in deciding these matters. I think it is unfair to an extent that because he wrote a Law Review article several years ago in which one can assume he expressed a pro- choice point of view that therefore somehow he would be disqualified from serving on the Ninth Circuit Court of Appeals. In fact, here is some breaking news: President Obama nominates pro-choice candidates to courts. Obviously, I am being facetious. I suspect most of President Obama's nominees are pro-choice. I don't ask the nominees I consult with, the ones we recommend from the State of Arizona, what their view is on any particular issue, including that issue. But I can assume the nominees of President Obama are probably more liberal--and are pro-choice--on that particular issue than my views. But President Obama is the President. He gets to nominate people. So I have to work with his White House Counsel to try to find the best possible people with two primary qualifications: One, how good a judge would that individual be in intelligence, judicial temperament, the kinds of things that make a good judge? Secondly--and this is very important to me--will this judge decide cases based on the law, period, the facts of the case and the law, and the U.S. Constitution or will the nominee potentially allow his or her own personal preferences, political points of view, and philosophy to be a part of the decisionmaking process? If I believe it is the latter, then I will not support a nominee. I have opposed nominees right here on the Senate floor based on that test where I thought that based on the hearing and the record of the nominee that the individual could have a hard time separating out their own political judgments from deciding cases. Then I voted no. This is a nominee I not only gladly vote yes on, but I am, frankly, asking my colleagues to vote yes because I absolutely, totally believe he will decide cases based upon the merits of the case, the facts, and the law, not based on the politics. Interestingly, on this one particular issue, to my knowledge there has not been an issue before the Arizona Supreme Court in the last decade, while he has been on the court, which would call on him to decide it one way or the other. So neither side can say, well, he didn't allow it to happen or he did allow it to happen. We have not been able to find any case like that. There have been other political kinds of issues that have come before the court--issues dealing with the death penalty and things of that sort. As I said, neither my conservative friends back in Arizona nor I have been able to find a case in which Justice Andrew Hurwitz's decisions have been based on anything other than a pretty clear reading of the law as applied to the facts of the case. I have every reason to believe in his honesty and his integrity in continuing that practice, which he has manifested over the last decade, if and when he is confirmed to the Ninth Circuit Court Of Appeals or I would not have recommended him to the administration, and I would not be recommending him to my colleagues. So with all due respect to my good friend from Iowa, whose views I share on the question of abortion, I think it would be wrong to oppose this nominee based on that fact.

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from North Carolina (Mr. Burr), the Senator from Georgia (Mr. Chambliss), the Senator from Oklahoma (Mr. Coburn), the Senator from Wyoming (Mr. Enzi), the Senator from Utah (Mr. Hatch), the Senator from Georgia (Mr. Isakson), the Senator from Illinois (Mr. Kirk), the Senator from Pennsylvania (Mr. Toomey), and the Senator from Louisiana (Mr. Vitter).

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from Illinois (Mr. Kirk) and the Senator from Louisiana (Mr. Vitter).

Mr. KYL. Mr. President, I wish to speak to this same question. As everyone knows, a ruling on the constitutionality of ObamaCare is expected later this month. I think it is important that it be done in the right context. A lot of our Democratic colleagues have made clear their view that if the ruling doesn't go the way they want it to, it is not because they passed an unconstitutional law but rather, in their view, because it is some kind of a partisan activity by judicial activists and a lot of attention has been specifically focused on Chief Justice Roberts. This should not stand. The President himself actually started this, I think, when he said: I'm confident that the Supreme Court will not take what would be an unprecedented, extraordinary step of overturning a law that was passed by a strong majority of a democratically elected Congress. Never mind it was not passed by a strong majority--and, by the way, the chairman of the Judiciary Committee said something very recently, basically issuing a warning to Chief Justice Roberts on the floor of the Senate, stating that a 5-to-4 decision to overturn the law would be controversial. ``I trust he will be a Chief Justice for all of us and that he has a strong institutional sense of the proper role of the judicial branch.'' In other words, the intimation here is if the decision doesn't go their way, the Court's reputation, and specifically the reputation of Chief Justice Roberts, is on the line. The Wall Street Journal wrote about this, and others have, talking about threats by the President and certain other members of his party with warnings that: Mr. Roberts has a choice--either uphold ObamaCare, or be portrayed a radical who wants to repeal the New Deal and a century of precedent. Let's clear up a few things. First of all, as I said, the law was not passed by a strong majority of Congress, it was passed exclusively by Democrats. Not a single Republican supported it. It was the first time in history that major domestic legislation was passed by one party. That is not the key point in terms of the constitutionality of the law, however. The key point is that the Court's job is, as Chief Justice Roberts said at his confirmation hearing, to work as an umpire, calling the balls and strikes as the Court sees them. Nonlegal arguments, such as the Court's decisions have to be popular or unanimous--those are just unserious and frankly political rhetoric. We all know that in 1803, in the Marbury v. Madison case, the U.S. Supreme Court established the review of congressional action under article III of the Constitution. Since then, courts have overturned hundreds of laws. It would hardly be, therefore, unprecedented or extraordinary for the Court to overturn a congressional enactment as the President has said. As the Supreme Court noted in that case, courts determining whether acts of the legislative branch are consistent with the Constitution is ``of the very essence of judicial duty.'' The Court further noted that ``the Constitution is superior to any ordinary act of the legislature.'' If the two conflict, ``the Constitution and not such ordinary act must govern the case to which they both apply.'' The actual substance of the case which Democrats seem eager to avoid talking about is that ObamaCare, if upheld, empowers the Federal Government to order its citizens to purchase particular goods and services that the government believes its citizens must have. That sort of all-powerful Federal Government is at odds with the concept of enumerated powers, as is creating commerce in order to regulate it, as Justice Kennedy intimated at the oral argument. This is why a significant majority of Americans dislike the law. They know the Constitution is meant to place limits on the power of our Government in order to protect the freedom of the people. I can't guess how the Court is going to rule. It may not agree with my views. But I suggest that political leaders in the executive and legislative branches need to cool their rhetoric, as my colleague said, stop yelling at the umpire and stop the thinly veiled threats and react to the ruling after it is rendered, rather than before.

Mr. KYL

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

Mr. KYL. Mr. President, I ask unanimous consent to speak as in morning business for up to 12 minutes.

Mr. KYL. Mr. President, let me speak today about two recent CBO reports and what they portend for the economy and for policy that we might want to make in the Congress. CBO, of course, is the nonpartisan Congressional Budget Office, and from time to time it looks at economic conditions and presents studies or issues reports about the state of our economy based upon legislation the Congress has adopted. There are two recent reports that I think suggest some very dire news for this country unless we in the Congress are willing to take some action. The first was a couple of weeks ago, and it dealt with the so- called fiscal cliff, the problem that will occur with the combination of two things automatically happening unless Congress and the President act. The first is the automatic across-the-board cuts or sequestration that will affect both defense and nondefense spending to the tune of $109 billion next year, something which the Secretary of Defense has said would be ``devastating'' and ``catastrophic'' for our national security. That is the first problem. The Congressional Budget office said the combination of the sequestration with the second item, which is the automatic tax increase, which is a $4.5 trillion tax increase that begins on January 1, the combination of those two will put this country back into recession. CBO projected the growth rate next year to be only about one-half of 1 percent. That, of course, is devastating for not just the economy but for job creation, for businesses, for families and the like. The second recent report of the CBO just came out. It is a report that talks about the surging debt of the United States Government and talks about the probability of sudden fiscal crisis. So we have a combination of the potential for going back into recession, combined with the probability of sudden fiscal crisis because of the amount of debt the Federal Government is taking on. Because this second report just came out, let me refer to some things that have been said about that, primarily in the Wall Street Journal in a piece on June 5 called ``Obama's Debt Boom.'' I will just quote a few lines from this editorial in the Wall Street Journal. It says: The CBO's long-term budget outlook notes that Federal debt held by the public-- That is the part we have to pay back-- will surge to 70 percent of the economy by the end of this year. Which is the highest in the history of the country except during World War II. I think that is about $49,000 or $50,000 for every man, woman, and child in the United States. They point out that under the present trend the debt will hit 90 percent of GDP by 2022. Then it balloons to 109 percent by 2026. What does this mean in practical terms? Here is a quotation from the Wall Street Journal about the CBO projection: We have never been deficit scolds, preferring to focus on the more important policy priorities of economic growth and spending restraint. But the Obama era is taking America to a place it has never been. Inside of a decade the country will have a debt-to-GDP ratio well into the 90 percent to 100 percent danger zone where economists say the economy begins to slow and risks mount. CBO notes . . . that this level of debt increase increases the probability of a sudden fiscal crisis, during which investors would lose confidence in the government's ability to manage its budget and the government would thereby lose its ability to borrow at affordable rates. How bad is it? In the absolute worst-case scenario, CBO says debt would exceed 250 percent of GDP in 2035. At that point, CBO's economic model breaks, because so much debt is so far outside ``historical experience'' and the CBO's ``assumptions might no longer be valid.'' That is where we are headed if we don't do something about it. Interestingly, what CBO assumed in order to reach these conclusions is that tax collections would continue to hold to the post-1972 historical average of 18 percent of GDP. The point is we are not talking about raising taxes in order to effect this. They are assuming we will have revenues of a historical level of 18 percent of GDP. The problem is not the tax collections; in other words, the problem is the excess spending. They point out that, of course, excess spending is primarily a factor of the entitlement programs--Social Security, Medicare, and Medicaid. They point out that the biggest of all those is in Medicare. Then the Wall Street Journal concludes this way: This is where the tax burden comes in, and on that score CBO admits that ``to the extent that additional tax revenues were generated by boosting marginal tax rates-- This is what President Obama proposed, remember-- those ``higher tax rates would discourage people from working and saving, further reducing output and income.'' So even the Keynesians who dominate CBO admit that there are costs in lower growth . . . If they raise tax rates as the President has proposed. This is, in effect, the most predictable crisis in history. So we have the combination of the CBO report talking about the fiscal cliff-- what happens if both the sequestration and the automatic tax increases go into effect--combined with the most recent report about the debt, and we can see the United States is headed for a disaster without intervention by the Congress and the President. Just one thing. The Director of CBO put it this way: The explosive path of Federal debt . . . underscores the need for large and timely policy changes to put the Federal Government on a sustainable fiscal course. What has the President and the Democratic majority in the Senate suggested? We turned to Jay Carney, who had a press conference Monday. He is the spokesman for the President. He said that ``the President is continuing to work with his team on potential new ideas.'' I would like for him to work with the Congress because we have had a lot of ideas. The House of Representatives passed almost 30 bills that deal with this, and they range all the way from the Keystone Pipeline, which immediately puts 20,000 people to work, easing environmental regulations, offshore oil exploration, and so on. So we would love to have him work with the Congress, rather than this anemic to-do list he has proposed, which, obviously, would not provide any relief. The bottom line is that as was reported in a story by the Associated Press, by Andrew Taylor, I think. As he said, after talking about the bills passed by the House of Representatives: ``Democrats will try to stop Republicans from forcing a vote on it in the Senate.'' What he is talking about is the vote the House of Representatives intends to have before long that would extend the current Tax Code, so there is certainty in tax rates, and businesses and families don't have to worry about this $4.5 trillion tax increase. The Democrats will try to stop Republicans from forcing a vote on it in the Senate. Why would the Democratic leader not want to have a vote on whether to extend the current tax rates as opposed to having an increase in taxes of $4.5 trillion? Actually, there are a lot of folks--leaders in the President's party, people who have worked with him--who have said it would be a good idea to extend those tax cuts. In fact, the President himself said so when he extended them for 2 years, along with the support from Congress, on December 1 year ago. He said not to do so would harm economic growth. He was exactly right then, and he is right now. As a matter of fact, we had a better GDP growth back then than we do now. If that would have been harmful then, it would be more harmful now. His belief then is adhered to by people who have worked with him and former leaders. For example, former Democratic President Bill Clinton suggested Tuesday--yesterday--that Congress temporarily extend all the Bush-era tax cuts. That includes the tax cuts for the wealthy. Remember, the Bush tax cuts applied across the board. They applied to everybody. The President has said that is fine but not for the wealthy. What President Clinton said is, no, the best thing would be for all of those tax cuts to be extended. I will quote what the former President said: What I think we need to do is to find some way to avoid the fiscal cliff, to avoid doing anything that would contract the economy now. He was asked if that meant extending tax cuts, and he said: They will probably have to put everything off until early next year. That's probably the best thing to do right now. Then the President's former adviser, who is an economics professor, Larry Summers, said today that Congress should temporarily extend the Bush-era tax cuts. He said: The real risk to this economy is on the side of slowdown . . . and that means we've got to make sure that we don't take gasoline out of the tank at the end of this year. He said that on MSNBC's ``Morning Joe'' program. He said: ``That's gotta be the top priority.'' So here you have Larry Summers, former adviser to President Clinton on economic matters, and former President Bill Clinton, both of whom have said we need to extend these tax policies today in order to avoid further damage to our economy tomorrow--exactly what the President himself said when these tax rates were extended a year and a half ago. I just note this from another Associated Press story regarding the comments by President Clinton. As they say: The nonpartisan Congressional Budget Office and others have warned that letting both events occur-- That is to say, the sequestration and the automatic tax increases-- would suck so much out of the economy that it could spark a renewed recession next year. That is when they refer to the statement of President Clinton that we need to find a way to avoid that fiscal cliff and that would include extending the tax cuts. The reality is we have somewhat of a consensus beginning to develop that it would be a wise thing for the country to retain current tax policies and not allow this big tax increase, to avoid the sequester or the across-the-board cuts that otherwise would affect both defense and nondefense; and if we don't do those things, according to CBO, the nonpartisan office that advises the Congress, we are likely to go back into a recession with growth that would be only one-half of 1 percent of our GDP next year. Let me conclude by referring to another article in the Wall Street Journal, dated June 5, entitled ``Defense Chiefs Signal Job Cuts.'' Here we are talking about the employers of people in the defense industries that are predicting that if we don't do something about sequester, they are going to have to begin laying off people. The article begins with this quotation: U.S. defense contractors are preparing to disclose mass job cutbacks ahead of November elections if Congress fails to reach a deficit-reduction deal by then, industry officials said. One of the people quoted is Robert Stevens, chairman of Lockheed Martin, a big contractor with the Defense Department. He said: It is quite possible that we will need to notify employees in the September and October timeframe that they may or may not have a job in January, depending upon whether sequestration does or doesn't take effect. One of the reasons is a Federal law that requires employers to provide this notice--the Worker Adjustment and Retaining and Notification Act, known as the WARN Act, which requires companies to notify employees in advance of mass layoffs or plant closings--if they have more than 50 or more employees, for example. One thing Mr. Stevens said is that it doesn't just affect the big companies such as his but also all these suppliers, people who have to provide the pieces or components of products that they end up putting together. They would have to be notified because they are not going to have subcontracts next year. One of the industry officials said sequestration is already here. What he meant by that was the reality is that businesses are having to make decisions now. This talk in the Senate about we will somehow be able to deal with this in the lameduck session after the election is simply not true. I suggest to my colleagues in the House and in the Senate that if we try to wait until after the election, I think our constituents, knowing what is happening--some of whom will probably have gotten job notices that they may be subject to termination because of the automatic across-the-board cuts, known as sequester--I think they may be sending a message to us this fall and, therefore, it behooves us to act before rather than after the fact. There has been talk today about what the Wisconsin recall election meant. I think one thing it must have meant is that people may complain about some of the decisions that are made when there are tough decisions, but they want people who are elected to do something about the problems, to act, have some courage, tackle the tough problems. Even if they don't totally agree with the solutions, I think they respect political leaders who are willing to do that. Scott Walker, the Governor of Wisconsin, took a lot of heat, but he took the bull by the horns and tried to solve a problem and, as a result of the things they were able to do, the fiscal situation in Wisconsin is much better than had they not taken those actions. That is what we in Congress need to learn. The people understand we have a big debt crisis facing us, which is confirmed by the Congressional Budget Office. They understand there is a huge risk of another recession because of the twin problems of the biggest tax increase in the history of the country coming our way January 1 and this sequestration that also occurs on January 1. They would like us to do something about that. I think what they resent is politicians saying after the election we will take it up and begin thinking about it. First of all, that is too late for a lot of people whose jobs depend upon it, and it makes for a very inefficient way of running the government. Secondly, I think political leaders owe their constituents the ideas they would like to put into effect. We don't wait and hide the ball from our constituents, refusing to tell them what we think until after the election. The idea of a democratic republic is people stand for office by saying: This is what I would do to solve our problems. Do you like it or not? If the voters say, yes, we think that is a good idea, they elect us and expect us to follow through on it. If they don't like our ideas, they elect the other person. But if we hide the ball and say we are not going to take votes in the Senate because we don't want to put Members on record because then the voters might know what they are thinking and they might not like it and not elect them, that is obviously a lack of political courage. It also runs counter to what the fundamental concept of elections is all about. I suggest that what we ought to do is tackle these two issues now, not wait until after the election. Legislation has been introduced in both the House and the Senate to find a way to save the $109 billion that needs to be saved in order to avoid the sequester for next year. This process will have to be undergone, undertaken, every year for the next 10 years because we have promised the voters we would save a total of $1.2 trillion. So how will we do it next year? Well, there are any number of ways. Senators McCain, Ayotte, myself, Chambliss, Graham, and Cornyn, and some others have introduced legislation that says, well, here is a way you can save the $109 billion next year: Get half of it by simply extending the President's own pay freeze for many Federal employees through the middle of 2014, and the other half, instead of replacing every single Federal worker who retires or leaves the Federal workforce, only replace two out of the three. Everybody talks about how wonderful the recommendations of the Simpson-Bowles Commission were. Well, the Simpson-Bowles Commission recommended hiring one new Federal employee for every three who leave the workplace. We double that. We say, well, let's hire two of the three back. The combination of just those two things would result in saving $109 billion. If you don't like that way to save money, there are many other ways to do so, and there are revenues from the sale of Federal property, for example, that could also be put on the table. So there are many ways to do this. But let's get about it. Why aren't we doing it? Well, the majority leader and the President say the only way they would consider doing this is if we also raise a bunch of taxes, and their wonderful idea about raising taxes is a tax on millionaires. Here is the problem with that. The very people we want to create the jobs are the businesspeople who pay these taxes. According to President Obama's Secretary of the Treasury, that Department says 80 percent of the people who would be subject to this millionaires' tax are business owners--the very people who need the money to hire the workers to put the economy back in good shape. When Senator Lindsey Graham asked Defense Secretary Panetta: Wouldn't sequestration be like shooting ourselves in the foot, he said: No, Senator, it would be like shooting ourselves in the head. I submit that raising taxes on the exact people to whom we are looking to create jobs is the same thing. That is the reason Republicans have said that is the wrong way to come up with this $109 billion. The whole idea of the Budget Control Act was to control spending, not to raise taxes. Since there are so many ways in which this government's $3 trillion-plus budget can save money, I don't think we have to turn to something that would itself have a negative impact on economic growth; namely, raising taxes. So that has been the reason this hasn't been taken up. One side insists we have to raise taxes in order to deal with this sequestration problem. The other side says: No, we don't have to do that at all. Let's sit down and work together and find a resolution for this problem, and let's get it done before the end of the year. At that point it is too late for a lot of people who will have lost their jobs. By the way, some of these industry people have told us some of the sole-source suppliers or subcontractors would probably end up taking bankruptcy because their orders could not be filled due to the uncertainty that a contract was there. So we could have a great deal of damage to the economy. In fact, the estimate is--if sequestration or across-the-board cuts occur--in the Defense industry alone we are talking about 1 million jobs lost. Remember how many jobs were created last month? I think it was 69,000 jobs were created last month. Compare that to losing 1 million jobs, and you can see the significance of what the Congressional Budget Office was talking about. This is a fiscal cliff. We cannot allow sequestration to occur, and we cannot allow these big tax increases to occur without understanding the damage that will do to the economy. They said it is going to put us back in a recession. That is before the report they just released on the increasing debt burden of this country. So, Mr. President, I say to my colleagues, the evidence is here. Leaders such as former President Clinton and economist Larry Summers and, of course, many other economists have said the best thing to do is to keep the tax rates where they are. Don't raise them. Resolve this sequestration issue so we don't have that hanging over our heads, and then look for other ways to boost job growth and economic productivity. That is the way to get out of the recession. That is the way to help families. Ironically, at the end of the day, a growing economy, producing more wealth, produces more tax revenues for the Federal Government, and that helps us deal with the big debt we have accumulated. So I think everybody agrees economic growth is ultimately the best way to get out of the government's fiscal problem. But it also, of course, is precisely the way for businesses and families to prosper. I hope colleagues in both the House and Senate--both Democrats and Republicans--can see their way clear to respond to this crisis--this utterly predictable crisis--and to deal with this problem sooner rather than later, exercising the courage our constituents would like to have us exercise and thereby representing them in the way they deserve to be represented. Mr. President, I suggest the absence of a quorum.

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from Illinois (Mr. Kirk) and the Senator from Louisiana (Mr. Vitter).

Mr. KYL

Mr. KYL. The following Senator is necessarily absent: the Senator from Illinois (Mr. Kirk).

Mr. KYL

Mr. KYL. Mr. President, today I would like to address some of the recent press chatter that attempts to paint Republicans as closet Keynesians because we oppose the massive defense cuts that are contained in the Budget Control Act--the automatic sequestration or across-the-board cuts that occur unless Congress acts to avoid that before the end of this year. The implication is that if we make economic arguments against these automatic cuts; namely, that they will result in massive job losses, we undercut our arguments against the President's stimulus spending, which is ostensibly created in order to stimulate consumer demand and therefore increase spending, which is supposed to get us out of the economic doldrums we are in. I wish to make two points in response. First, of course, eliminating more than 1 million defense-related jobs, which is what will happen if the automatic sequestration occurs, will obviously hurt the economy. It will obviously result in job losses, and many people will suffer. That is what a George Mason University study said this $492 billion in cuts will contribute to. In fact, the same point was made in a CBO study that was released a couple of weeks ago. How could such massive job losses not do economic harm? A million jobs--jobs in both the private and public sectors--comprise a substantial part of our economy. In fact, just in my State of Arizona, there are about 33,200 private-sector jobs at risk if these automatic defense cuts were to take place. But--and this is my second point--most Federal spending, certainly including defense spending, is for purposes other than stimulating the economy. I support spending for national security because it is necessary for the Nation, not because it also happens to provide jobs. And that is the way it is with a lot of Federal spending. We support the programs because they satisfy a need, and certainly the No.1 need of those of us in the Congress and the President is to provide for the national defense. So we spend what we think is necessary each year to provide for the national defense. The fact that also can create some jobs is a side benefit, if you will, in an economic sense, but it is not the reason we do the spending in the first place. If that spending is cut way back, however, there is no question that jobs will be lost, and I think that is worth pointing out in the context of a discussion about economic recovery. What I would not do is support unnecessary spending on defense or anything else just to create more government-supported jobs, just for the sake of stimulating the economy. The taxpayers don't have enough money to contribute to the Federal Government for that purpose. We should spend what is necessary and no more. So supporting existing defense jobs is very different from supporting redistributionist government stimulus spending for jobs there is no demand for and on government payments for things such as food stamps and other transfer payments that don't necessarily translate to new jobs but simply move money around. The difference, really, is how you spend the money. Just to reiterate, Republicans support defense jobs because they produce something essential to our national security and the things they relate to--intelligence and making equipment and weapons and so on. The jobs that produces are incidental to the primary reason we support those jobs. Keynesians support redistributionist government stimulus spending because they think government spending boosts jobs and economic growth by increasing consumer demand, as I said. But this zero-sum thinking may result in the redistribution of resources from one group of Americans to another but doesn't necessarily result in any net new production or economic growth. It is said, for example, that we could pay people to dig holes and then fill them up again and we would have created jobs but we wouldn't have created any productivity or growth for the economy per se. Unfortunately, very often the group left paying the bill is the very group of people we rely upon to create the new jobs--in this case, the taxpayers, especially small business folks, whom we call upon to create the jobs coming out of the recession. The real trade-off is between government jobs and jobs created in the private sector. Leaving more money with the job creators in the private sector enables them to create those jobs. Taking more of it away and sending it to Washington for Washington to redistribute takes away from job creation. As I have noted many times, the last 3-plus years have shown we can't spend our way to economic growth and prosperity; that is, we--the Federal Government--can't spend our way to growth and prosperity because the money we spend either has to come from taxpayers or be borrowed and eventually be paid back by taxpayers. The stimulus was supposed to keep unemployment below 8 percent, but we have just marked the 40th straight month of unemployment higher than 8 percent--above 8 percent. I think such outcomes demonstrate why Republicans oppose these Keynesian spending policies. They simply don't work. If they did, we would be rolling in dough right now after four consecutive trillion- dollar deficit spending sprees. To set the record straight, Republicans are not arguing that the Department of Defense is a jobs program. It is necessary for our national defense. That is why we spend the money. We are not saying we are going to fix the economy by undoing the defense cuts under the sequestration. We are not even saying defense-related jobs are the most important sequester-related issue. What we are saying is that defense cuts are very dangerous for our national security, and if they go through, not only is our safety jeopardized, but we may have more than 1 million newly unemployed Americans. That is not a desirable outcome, and that is worth talking about. That is something we must keep in mind as this debate goes forward. In conclusion, I renew my call to my Democratic colleagues and to our House colleagues to get together--Republicans and Democrats, House and Senate--to do something we all know is in the best interest of the country: avoid the automatic sequestration, half of which applies to defense--we are all for a strong national defense--and half of which applies to all the other discretionary spending programs. All those things will suffer if we don't reprioritize our spending and our reductions in spending as opposed to allowing this to happen across the board. We do that by finding offsets we can agree upon in a way that will, as I said, set the priorities and enable the departments of government that have to plan for the future to do so in an intelligent way rather than simply knowing at the end of the year they are all going to have to have an across-the-board cut that isn't in anyone's best interest. It is not as if we are suggesting doing away with the savings that would result from sequestration, which is $109 billion for next year. Well, believe me, there is $109 billion in the $3-plus trillion spending we will be doing here. There certainly is $109 billion in savings we can achieve, and there have been several proposals already as to how that can be done. And it can be done without losing Federal jobs, it can be done without negatively impacting the economy, and it needs to be done under the law because Congress promised that we would save that $109 billion next year. It is just a matter of whether we will do so intelligently, making the decisions we can make--and that our constituents expect us to make--in an intelligent way, setting priorities, or whether we will simply succumb to the notion that we can't make a decision, so we will let it happen across the board. Just to give an illustration, how would you like to be a Navy admiral who hears the words: Here is your 80 percent of a submarine, admiral. It doesn't work that way. If we need the submarine, we need to pay for 100 percent of the submarine and cut somewhere else. That is all we are suggesting. We need to do that while the planning can be done for next year; otherwise, we are going to have a very inefficient and Draconian cut coming up that is not going to benefit anyone. Again, I urge my colleagues, let's find a way to get together, find those savings, and get that done before we get toward the end of the year, when the departments can do the planning we will be asking them to do. Mr. President, I suggest the absence of a quorum.

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

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from North Carolina (Mr. Burr), the Senator from Georgia (Mr. Chambliss), the Senator from Indiana (Mr. Coats), the Senator from South Carolina (Mr. DeMint), the Senator from Nevada (Mr. Heller), the Senator from Illinois (Mr. Kirk), the Senator from Ohio (Mr. Portman), and the Senator from Florida (Mr. Rubio). Further, if present and voting, the Senator from South Carolina (Mr. DeMint) would have voted ``nay.''

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from Texas (Mrs. Hutchison) and the Senator from Illinois (Mr. Kirk).

Mr. KYL. The following Senators are necessarily absent: the Senator from Texas (Mrs. Hutchison) and the Senator from Illinois (Mr. Kirk).

Mr. KYL. Mr. President, I will speak about two amendments that we will vote on later. Amendment No. 2111 First is the Bingaman amendment. I urge my colleagues to oppose it. It ignores fundamental economic realities of pharmaceutical patent litigation, and it would ultimately result in fewer generic drugs being brought to market and delays in the launch of many of the generic drugs that do go to market. Under current law, a generic drug company that is the first to file an abbreviated new drug application for an existing patented drug is entitled to 180 days of market exclusivity once the generic drug is approved. In other words, they have the exclusive market on it for half a year. This creates a powerful incentive for drug companies to bring generic drugs to market. The present amendment would dilute this right of 180 days of exclusivity and potentially require the exclusivity period to be shared with another drug company's product. Under the amendment, the only way a generic drug company that files the first ANDA could be assured of getting 180 days of market exclusivity is by litigating a challenge to the validity of the branded drug's patent all the way to a final judgment. This is not a sound approach. First of all, patent litigation is very expensive. Full litigation of a drug patent suit typically costs between $3 million and $5 million. Second, most drug patents are ultimately found by the courts to be not invalid; that is, most validity challenges to these patents fail. Generic drug companies, as everyone else, have limited litigation budgets. As a practical matter, if we force them to litigate every patent case to a final judgment in order to preserve their exclusivity rights, they will pursue fewer abbreviated new drug applications, and fewer ANDAs means fewer generic drugs and higher costs for consumers. Finally, it is often the case that part way into a drug patent lawsuit, the generic drug company comes to the conclusion that the brand's patent is strong and that the challenge to the patent is likely to lose. In such a situation, everyone is better off if the suit is settled. Typically, such settlements allow the generic drug to go to market somewhat earlier but still preserve the bulk of the patent term. Obviously if the generic drug company is forced to litigate this all the way to judgment in order to potentially receive exclusivity and they lose, the full patent term will run and there will be no early generic market entry. This hurts both the generic drug companies and, more importantly, the consumers. For these reasons, I urge my colleagues to oppose the Bingaman amendment. Amendment No. 2109 Second, I urge my colleagues to oppose the Sanders amendment. This amendment would undermine the government's ability to fight fraud and will harm patients and U.S. competitiveness by eviscerating existing incentives to invest in medical innovation. The Sanders amendment would result in the automatic revocation of any remaining regulatory exclusivity on a product when a company is convicted or even enters into a settlement agreement for certain violations of the Food, Drug, and Cosmetic Act, or any violations of the False Claims Act or several other listed statutes. There are several reasons why this is the wrong approach. First and foremost, the amendment will result in less lifesaving drugs ever getting to patients. Obviously, we should be fighting for lifesaving drugs getting to patients even faster. We provide these periods for exclusivity, as I mentioned earlier, for a reason: to enable companies to recoup the significant investments they make--as high as $1.2 billion per drug--to develop new medicines. Some of the exclusivities the amendment would revoke are those we enacted to encourage companies to ensure the safe use of pharmaceuticals in children or to find a cure for rare diseases that affect a very small number of people. Indeed, orphan drug exclusivity is a great example of how these exclusivity periods benefit patients. Since 1983, the year the Orphan Drug Act was signed into law, more than 350 medicines have been approved to treat rare diseases, compared to fewer than 10 in the 1970s. Why would we want to jeopardize such a great success story? Second, reduced investment in U.S. drug development is not only bad for patients but for the economy. Because the Sanders amendment would create a disincentive to invest in drug development, the National Venture Capital Association has already expressed concerns, stating that the amendment has ``the potential to inadvertently undermine innovation and undermine decades of policies enacted by Congress with the goal of fostering medical innovation.'' Defined periods of exclusivity provide some small measure of predictability in what is otherwise a risky process, and companies and venture capitalists rely on these periods of exclusivity to make development and investment decisions. By threatening the elimination of exclusivities for conduct that is likely many years removed from the development process, the Sanders amendment would introduce even greater uncertainty into the R&D process. Let me restate that we need to reconsider the overall favorability of the environment for innovation in the United States. Yet here we are considering an amendment that, if enacted, would make the U.S. investment climate far less attractive for these companies, even as other countries are actively courting the biopharmaceutical industry. Third, while the amendment purports to fight fraud, in reality it would actually undermine the ability of the government to fight fraud by undermining its ability to settle cases. The Sanders amendment would revoke exclusivity not only upon conviction--even if that conviction is later overturned on appeal--but also upon settlement. This is a huge problem because it creates a disincentive for companies to ever settle, as it would make more sense to drag out the district court litigation while any relevant exclusivity period is still running for the company. Fourth, and finally, the amendment is not even necessary because the outcome called for by the Sanders amendment can already be achieved under current law in appropriate cases, because the government can, and does, have the power to negotiate the relinquishment of exclusivity as a condition of settlement. It can already do this. For example, this past January, the Department of Justice negotiated the relinquishment of a company's 180-day exclusivity as part of a settlement for violations of the Food, Drug, and Cosmetic Act. Mandating this serious outcome in every case undermines the government's ability to use it as leverage to negotiate settlements. Large penalties already apply for violations of the statutes listed in the Sanders amendment. The world of drug manufacturing and marketing is very heavily regulated, and noncompliance is subject to considerable penalties under current law. This amendment is not necessary. Rather than being outraged by settlements that occur, perhaps we ought to take them as an indicator that the government is doing a good job of using existing authority to go after those who seek to defraud the health care system. I urge my colleagues to oppose the Sanders amendment.

Mr. KYL. The following Senators are necessarily absent: the Senator from Idaho (Mr. Crapo), the Senator from Texas (Mrs. Hutchison), and the Senator from Illinois (Mr. Kirk).

Mr. KYL. The following Senators are necessarily absent: the Senator from Idaho (Mr. Crapo), the Senator from Texas (Mrs. Hutchison), and the Senator from Illinois (Mr. Kirk).

Mr. KYL. The following Senators are necessarily absent: the Senator from Nevada (Mr. Heller), the Senator from Texas (Mrs. Hutchison), and the Senator from Illinois (Mr. Kirk).

Mr. KYL. The following Senators are necessarily absent: the Senator from Texas (Mrs. Hutchison) and the Senator from Illinois (Mr. Kirk).

Mr. KYL. The following Senators are necessarily absent: the Senator from Texas (Mrs. Hutchison) and the Senator from Illinois (Mr. Kirk).

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from Texas (Mrs. Hutchison) and the Senator from Illinois (Mr. Kirk).

Mr. KYL

Mr. KYL. Madam President, today I would like to add a little context to the discussion of the fiscal cliff our Nation approaches, a reference to the combination of the largest tax increase in history, new taxes under ObamaCare, sequestration, and the expiration of the payroll tax holiday, all of which take effect in January of 2013 unless the President and the Congress act. This is a key discussion to have because how we view this so-called fiscal cliff defines our perspective on how an economy grows and prospers. Edward Lazear, who is a former Chairman of the President's Council of Economic Advisers, recently wrote an op-ep that outlines the various perspectives. I will focus on the two most prominent: the Keynesian view and the view of supply-side economics. The Keynesian theory holds that spending is the key to growth-- government spending. Keynesians believe that in recessionary times, increased government spending can take the place of private sector activity. That is why they present a false choice between government spending cuts--in other words, austerity--and growth. Their perspective holds that growth is contingent on government spending. This was the thinking behind the President's 2009 stimulus spending package, the so-called Cash for Clunkers, and a litany of other recent government spending programs, transfer payments, and temporary tax credits. I believe the administration's insistence on enacting these temporary Keynesian spending policies to stimulate consumption is misguided and the evidence reveals has failed. Remember, the stimulus was sold as a measure to keep unemployment from topping 8 percent. But, in fact, unemployment has not dipped below 8 percent for 39 months, and growth is very anemic. We are experiencing a recovery in name only. So there is not much evidence that spending can revitalize a sagging economy; that is to say, government spending, and even if government spending could be a boost, as Lazear points out, the costs would be massive. Here is what he writes: Even if a fiscal stimulus has some benefit, the cost of fiscal policy is likely to be very large. In order to stimulate the economy, growth in--not high levels of-- government spending is required. To provide a stimulus comparable to the 2009 legislation, we would need to increase government spending by $250 billion. He goes on: The Keynesian view implies that keeping spending constant at the higher level in 2014 would generate no simulative growth for 2014 . . . because there is no increase in spending over the 2013 level. . . . If we want to delay our day of reckoning, we must keep spending at a higher level for each year that we want to postpone the negative consequences for growth. Supply-side economics, on the other hand, holds a different perspective on growth: that government spending does not increase prosperity, that tax hikes hurt the economy and stifle growth. We believe that economic growth stems from combining three inputs: labor, capital, and technology. These three factors of production result in output that we can then consume. Without labor, capital, and technology, there can be no consumption. Focusing on policies that stimulate consumption targets the wrong side of the equation. In order to get the economy going, we need to focus on the inputs--labor, capital, and technology. We also believe government spending cuts are beneficial because they free up private capital and help align revenues with government spending. Lazear argues that supply-siders stand on the firmest ground when it comes to fiscal policy's effect on economic growth. Here is what he writes: On the tax side, there is strong evidence that supports the supply-siders. And he cites, for example, research from Christina Romer. By the way, Christina Romer was President Obama's first Chair of his Council of Economic Advisers. Her research shows that raising taxes by 1 percent of GDP--raising taxes, which is what the administration proposes-- lowers our gross domestic product by nearly 3 percent. So increase taxes by 1 percent, you lose 3 percent of gross domestic product. I recently joined 40 of my Republican colleagues in sending a letter to Leader Reid to make this point, that tax increases will have a deleterious effect on economic growth. The letter asks that he join us in working to take the tax threat off the table before the election in order to create more economic certainty. We know that so-called ``taxmageddon'' is coming. There is no good reason not to act. The election is not an acceptable excuse. In fact, I would posit that politicians could be rewarded for acting to avert the catastrophic effect of this huge tax increase. In addition to acting to prevent tax hikes, Congress should also pursue spending cuts to help unleash private capital, boost growth, and reduce our nearly $16 trillion national debt in the process. To be clear, cutting government spending does not mean the government should take a sledge hammer approach and cut indiscriminately. We should be careful where we cut. We should prioritize. For example, I oppose the defense cuts on national security grounds, not Keynesian grounds. In other words, while it is true that cuts in defense spending will result in job losses, big job losses under sequestration, our national security is even more important. The automatic spending cuts under sequestration mean that across-the-board spending to the Department of Defense will, in the words of the Secretary of Defense, devastate our national security. Allowing the sequester to begin as planned would cut 10 percent from defense in fiscal year 2013 alone and dramatically shrink the size and capabilities of our military. To avoid this, the Senate should follow the lead of the House of Representatives, which recently passed legislation to replace the sequester with other spending reductions. The legislation will cut $315 billion in spending and will reduce the deficit by over $242 billion. It is not a perfect bill, but I do believe it is a good place to start. My overarching point is this: We should not shy away from prudent spending cuts for fear that they will hurt growth. It should not be difficult to find cuts in our $3.7 trillion budget. These cuts certainly will not derail economic growth if they are done the right way. The choice, in other words, between spending cuts and growth is a false choice. If the President is not truly concerned about boosting growth and reversing the trends of the last 3\1/2\ years, he should stop presenting this false choice, as he did, for example, at the G8 summit last weekend, where he actually encouraged German Chancellor Angela Merkel and other leaders to embrace what he called a ``growth package'' modeled in part after his own budget-busting stimulus spending. I hope Chancellor Merkel and other leaders around the world take a very close look at whether the Obama growth package is something they wish to bring home after observing the American economy for the last 4 years. Preventing tax increases and reducing out-of-control spending is a better approach to long-term prosperity. I ask unanimous consent that at the conclusion of my remarks, the op- ed I referred to by Edward Lazear in the Wall Street Journal of May 21 be printed in the Record.

Mr. KYL

Mr. KYL. Mr. President, I ask unanimous consent to speak as in morning business.

Mr. KYL. Mr. President, what I would like to talk about this afternoon is a bit about the President's economic record. I am sure Americans have noticed the President barely mentions this economic record when he is out on the campaign trail, and I can well understand why. It is not a very impressive record, especially if you are a taxpayer or a business owner. Our national debt creeps closer to $16 trillion each day. It is now more than $5 trillion more than it was when the President took office. It now adds up to about $50,000 per person in the United States, and that is exclusive of interest payments. By way of contrast, the median yearly household income--in other words, all the people in the house-- is less than $50,000. It is $49,445. Unemployment recently dropped, but it did so for the simple reason that fewer people are searching for work. The President's signature legislative items--the stimulus bill, ObamaCare, and Dodd-Frank--have not only been unhelpful in boosting growth, but they have left a trail of crushing debt, uncertainty, and new regulations in their wake. I want to make a few points about each of those bills because I think they paint a fair picture of the President's economic record. First, let me talk about the stimulus. We have not forgotten about the stimulus, even though I suspect the President might like to--$1.2 trillion. It, obviously, failed to achieve the promised results. An Associated Press reporter wrote shortly before it was signed into law: They call it ``stimulus'' legislation, but the economic measures racing through Congress would devote tens of billions of dollars to causes that have little to do with jolting the country out of recession. Of course, that is exactly what happened. It seemed more designed to shower taxpayer dollars on certain favored constituencies and pet interests than to actually jump-start the economy. Much of it was simply wasteful Washington spending. Many investors must have asked themselves why they should put their money to risk on new job-creating ventures when they have to compete with well-connected firms that can simply wring taxpayer-provided stimulus dollars out of Congress or the Obama administration. A Washington Post poll released just last week showed that 48 percent of Americans have an unfavorable view of the stimulus--and this was, after all, the President's signature effort to spur the economy. Indeed, as Jeffrey Anderson notes in a recent issue of the Weekly Standard magazine, the administration does seem to be downplaying the law. Not only has the stimulus failed to create robust growth, the costs have become more outrageous. He writes: It has now been five months since the Administration last put out a report card on [the stimulus.]. . . . the December report marked the sixth straight quarterly report showing that stimulus's cost per job is rising: In reports spanning January 2010 to December 2011, the stimulus's cost per job more than doubled, rising from $146,000 (in January 2010) to $317,000 (in December 2011). With each passing quarter, the stimulus has become an even worse deal for taxpayers. So this is the administration's own report card on the stimulus, concluding in the last report, $317,000 per job. Think about that for a moment. To create each job, the taxpayers shell out $317,000. Numbers like these remind me of a quip from writer Christopher Buckley. He said writing political satire these days can be difficult because it has to compete with reality--$317,000 for one job under the President's stimulus. Well, second, ObamaCare. The $2.6 trillion bill is not aging very well. Since its passage, the act has imposed an estimated $14.9 billion in private sector burdens, approximately $7 billion in costs to the States, and 58.6 million annual paperwork hours, according to a weekly regulatory report. The April Kaiser health tracking poll showed that more Americans have an unfavorable view of the law than favorable. It is 43 to 42 percent. More than half of Americans oppose its central provision, the so-called individual mandate. All told, the new taxes in ObamaCare would add up to $\1/2\ trillion over 10 years. Many of these taxes will coincide with the biggest tax increase in history--the one scheduled for the end of this year. So at the very time the income tax rates are scheduled to go up, the new taxes from ObamaCare will hit--$\1/2\ trillion worth of new taxes over the next 10 years. Finally, there is the Dodd-Frank financial regulatory reform bill. When it comes to financial regulatory reform, I think most Americans believe there should be two simple goals: preventing new crises from happening and making sure the taxpayers are not on the hook for Wall Street's mistakes. Well, the Dodd-Frank bill did not achieve either goal. It is a complex web of regulations that institutionalized ``too big to fail'' and has served to increase uncertainty, increase moral hazard, and increase economic distortions, all the while adding 52.9 million paperwork hours since its passage. So, as I said, President Obama does not seem to be running for reelection on this record of the stimulus package, ObamaCare, or Dodd- Frank regulatory reform. Instead, he is going to be sending--or maybe he has already sent it--to Congress a to-do list, things he would like for Congress to do, most of which are tax credits and other very short- term proposals that are not likely to have a big effect on jobs or growth because the business sector is not impressed with a one-time- only, short-term proposition. It wants to know that when it invests money, that investment is going to be for the long term. Apparently, he is going to campaign on this most recent list when he goes out to Iowa later this week. Well, this happens to be Small Business Week, and one would think the President would turn to something that businesses have actually said they would like to do; that is, to prevent this tax tsunami coming at the end of this year--as I mentioned, the biggest tax increase in the history of the country, which automatically would take effect on January 1 of next year, unless Congress does something about it and the President can sign the legislation. The NFIB, the National Federation of Independent Business, recently released a list of the top five uncertainties in the Tax Code that they say would harm small businesses. Let me just mention three of these uncertainties. One is the pending increase in marginal tax rates, which will devastate the estimated 75 percent of small businesses that file as individuals. Every one of the five tax rates in the IRS Code will be increased as of January 1. Since most of the businesses now pay-- especially small businesses--as individuals--so-called passthrough entities--these rate increases directly will impact small businesses. Secondly, they are concerned about the death tax. That is going to ensnare 900 times more small business owners and 2,200 times more family farmers if the rate increases to 55 percent and the exemption falls to $1 million, as is scheduled to occur on January 1. Third is the alternative minimum tax which will hit 27 million more Americans--including many small businesses--if it is not patched or repealed. Well, small business cannot afford this, what has been called ``taxmageddon'' and its devastating consequences. I would hope, instead of this to-do list the President is sending us, he would take up the cause of preventing this big tax increase at the end of the year and help the small businesses and families that need that help. Finally, I ask unanimous consent to have printed in the Record at the conclusion of my remarks a piece in National Review Online by Larry Kudlow dated May 17 called ``Extend the Bush Tax Cuts Now.''

Mr. KYL. In this piece, Larry Kudlow, a noted economist, notes that with respect to this ``taxmageddon''--the increase in everybody's taxes at the end of this year--it is the uncertainty of it all that is preventing the investment by business which would create the jobs we would all like to see. I would just like to quote three paragraphs and a couple sentences in a fourth. He says: The uncertainty over the Bush tax cuts already has caused a number of business leaders to threaten a hiring freeze and a dampening of investment until they can figure out the after- tax cost of capital and rate of return on investment. Hiring has slowed noticeably in recent months. And a number of Wall Street economists are marking down the anemic recovery even more, suggesting that the 3 percent growth at the end of last year, which faltered to 2 percent growth in the first quarter, could be even less in the period ahead. Then he goes on to say: A bunch of CEOs have even formed their own march on Washington. Eighteen of them just wrote to Treasury man Timothy Geithner, begging him to oppose tax-rate hikes on dividends-- Which would go from 15 to 45 percent-- and capital gains (from 15 to near 30 percent. . . .) ``Equity capital is the life blood of investment and job creation for U.S. companies.'' That is what these CEOs wrote in the letter to Treasury Secretary Geithner. Kudlow goes on to say: And they argued that the administration's tax-hike plans would do great harm to American competitiveness and capital formation. Then he quotes the Ernst & Young firm to say this: . . . the top U.S. integrated tax rate on corporate profits and dividends is on course to hit 68.6 percent, significantly higher than all other OECD countries-- Those are the developed countries of the world-- as well as Brazil, Russia, India, and China. Capital gains would rise to 56.7 percent. In other words, he is pointing out that not only would these higher tax rates hurt the small businesses and the families because of the individual tax rate, marginal rate increases, but raising the dividends and capital gains taxes would be even more detrimental because we are asking companies in America to compete with firms all over the world, and their rate would be much higher with this tax increase than the rate in all of the other developed countries, as well as countries such as Brazil, Russia, India, and China. How can American businesses compete in that situation? Then, finally, Kudlow notes the effect of all of this uncertainty on what matters most to most Americans; that is, the fact that they cannot get work. He says: Bizarrely, some 25 million people have vanished from the labor force--from unemployment, underemployment, or simply dropping out all together. And half of U.S. households are now on some form of federal-transfer-payment assistance. So as we pay so many people not to work, we're sapping the vitality of the economy. This is absolutely true. With half of the people in the country on some form of Federal assistance, with 25 million people having just vanished from the labor force not even looking for work anymore, businesses sitting on the sidelines because they cannot calculate what kind of return on investment they could get because of the potential for the huge tax increase that is going to occur on January 1, it is no wonder we cannot move forward with an economic recovery. So I would just say to President Obama that providing long-term tax rate certainty would go a long way toward establishing a sound economy in this country, putting Americans back to work, and, ironically, establishing a better record on which the President could run. A year and a half ago, the President actually proposed--and I think Congress was very happy to go along with--a continuation of the existing tax rates because, as he said at the time, not to do so would be very damaging to the economy. I would submit it is equally damaging for that to happen at the end of this year. So I would ask the President, help give the American people and American businesses the certainty they need to invest, to create jobs, to advance our economic growth, and create prosperity for our future. Exhibit 1 [From National Review, May 17, 2012] Extend the Bush Tax Cuts Now (By Larry Kudlow) House Speaker John Boehner is playing a heroic role right now. In his efforts to prevent the Bush tax cuts from expiring, Boehner is aggressively taking on President Obama's leadership ineptitude on the economy. In essence, Boehner is pushing a Republican policy to wrap up a debt-limitation bill and extend the Bush tax cuts in one fell swoop before the election--and before all the last-minute, crisis-oriented, political machinations that would come in a lame-duck Congress, threatening another credit downgrade and leading to a business-hiring freeze and plunging stock market, all of which happened last year. Tax-cut certainty is so vital right now because the anemic economic recovery may be moving towards deflation. That's the message of a gold price that has collapsed by near 20 percent, falling from around $1,900 an ounce to the mid- $1,500s. With a risk-averse economy at home, and with the Greek and European financial crises abroad, the demand for dollars seems to exceed the dollar supply printed by the Fed. This could be solved by more quantitative easing. But a better approach for a system already oversupplied with unused liquidity would be the extension of tax-rate growth incentives, not more monetary pump-priming. The uncertainty over the Bush tax cuts already has caused a number of business leaders to threaten a hiring freeze and a dampening of investment until they can figure out the after- tax cost of capital and rate of return on investment. Hiring has slowed noticeably in recent months. And a number of Wall Street economists are marking down the anemic recovery even more, suggesting that the 3 percent growth at the end of last year, which faltered to 2 percent growth in the first quarter, could be even less in the period ahead. A bunch of CEOs have even formed their own march on Washington. Eighteen of them just wrote to Treasury man Timothy Geithner, begging him to oppose tax-rate hikes on dividends (from 15 to 45 percent) and capital gains (from 15 to near 30 percent, taking the ``Buffett Rule'' into account). ``Equity capital is the life blood of investment and job creation for U.S. companies,'' they wrote. And they argued that the administration's tax-hike plans would do great harm to American competitiveness and capital formation. According to accounting firm Ernst & Young, the top U.S. integrated tax rate on corporate profits and dividends is on course to hit 68.6 percent, significantly higher than all other OECD countries, as well as Brazil, Russia, India, and China. Capital gains would rise to 56.7 percent. And Speaker Boehner knows this. So he's begun a valiant fight to get supply-side tax reform at the top of the congressional agenda well before the election. Similarly, House budget chairman Paul Ryan is suggesting at least a six- month extension of the Bush tax cuts, so as not to disrupt business. (By the way, the Ryan tax-and-spending-reform budget got 41 votes in the Senate, while Obama's budget got none.) In a recent interview, former top Obama economic adviser Larry Summers told me the U.S. recovery is going ``ahead of schedule.'' Really? But former Obama economist Austan Goolsbee gives a more realistic assessment by referring to a subpar 2 percent forecast that is way too slow to spark faster job creation. Bizarrely, some 25 million people have vanished from the labor force--from unemployment, underemployment, or simply dropping out all together. And half of U.S. households are now on some form of federal-transfer-payment assistance. So as we pay so many people not to work, we're sapping the vitality of the economy. Mitt Romney recently gave a fine speech, blasting Obama's profligate spend-and-borrow policies. He described ``a prairie fire of debt sweeping across Iowa and the nation,'' and he tied our newfound debt to the ``tepid recovery.'' But lower spending alone, while important, is not going to solve the economic-growth problem. Yes, moving spending to 20 percent of GDP from 24 percent will free up private resources. But lower tax-rate incentives on the extra dollar earned and invested is a more powerful economic-growth tool. Romney should push his 20 percent tax-rate-reduction plan. That would add liquidity to fight deflation, and would provide new economic-growth incentives. As for John Boehner's goal of an early extension of the Bush tax cuts, it's going to be an uphill climb. Democrats want to raise taxes, not cut them. But at least the GOP will have a coherent growth-and-jobs message. They can tell the public how important it is to avoid falling off the massive tax cliff which looms ahead. Deflationary fears can ease. And they can make it plain to voters that the GOP has a growth message in these perilous economic times, while the Obama Democrats do not.