Jon Kyl

Mr. KYL

Mr. KYL. The other subject I would like to address today is news on a totally different front, but it is a subject that will be familiar to us from last December when the Senate argued the New START treaty and ultimately passed it. I am going to speak primarily about questions of missile defense cooperation with Russia, which was a big part of that discussion. I wanted to first call attention to the fact that the Department of State released a fact sheet last Wednesday. It was entitled ``New START Treaty Aggregate Numbers of Strategic Offense Arms''--a long title. But the statement from the State Department confirmed what we had argued during the time of this START debate and what I thought was pretty widely understood at the time, despite administration protestations to the contrary; namely that the New START treaty is perhaps the first bilateral treaty that resulted in U.S. unilateral reductions in nuclear forces. As this fact sheet makes clear, Russia was already below the deployed strategic forces and deployed delivery vehicle limits of the treaty when we ratified the treaty. This is something we tried to point out. We said this is not a two-way street. Russia has already reduced its weapons below the levels called for in the treaty. The only country that will have to reduce levels from what currently exists is the United States. Now this information is confirmed by the State Department. Even the Arms Control Association recognized this when it posted on its blog recently, on June 1: Why has Russia already met its obligations? Because Moscow was in the process of retiring older strategic missiles while the treaty was under negotiation. Exactly correct. This fact should not be overlooked, especially not as the administration undertakes a review of the nuclear deployment guidance and targeting and deterrence doctrines, which are designed, or so the administration claims, to be ``preparations for the next round of nuclear reductions.'' That is according to the President's National Security Adviser. I worry that the next round may also be a unilateral round where the United States makes all of the concessions, as occurred under the New START treaty. According to Gary Samore of the national security staff, at an Arms Control Association Conference, he said these may be ``unilateral steps that the U.S. could take.'' Obviously, that is something we would be concerned about if we are making unilateral concessions while the Russians make none. He made one other point at the Arms Control Association. He said: We've reached the level in our forces where further reductions will raise questions about whether we retain the triad or whether we go to a system that is only a dyad. Those are important considerations. Reductions below the level that we have now are going to require some more fundamental questions about force structure. When we speak of the triad or the dyad, remember the triad is the system we have had all throughout the Cold War that relies on a combination of ICBMs on land, submarine-based missiles at sea, and a bomber force that can deliver weapons from the air. As Mr. Samore points out, if we reduce our weapons levels even further, we will probably reach a point where instead of all three systems, we will only have two. So I think it is clear we have reached a breaking point where further reductions will require significant changes to the U.S. nuclear deterrent and could presumably alter the commitments that the administration made to the Senate as to the modernization of deterrent. During our debate on the START treaty, there were a lot of promises made about how we were going to retain the triad, and we were not going to eliminate further strategic weapons. Now those matters seem to be in doubt, and this is why, one of the reasons why, 41 Senators wrote to the President on March 22 and asked that the Senate be consulted about any further changes that the administration may choose to embark upon. And I want to be clear, it is a choice. There is no compelling justification to change the current U.S. nuclear posture. So this would be something the administration would be doing on its own. But I am concerned that in the National Security Adviser's letter-- responding to ours--on May 31 there was no reference to how the administration intended to keep the Senate involved as this process goes forward. I think it makes all the more clear the need to pass S. 1097, the New START Implementation Act, which provides, as one of its provisions, for the Congress to be consulted before any changes are made to the nuclear guidance. I also look forward to an opportunity to discuss these matters with the President's nominee for Secretary of Defense, Mr. Leon Panetta. I will be curious to learn if he agrees with the 10-year commitments made to the Senate last year regarding the modernization of the nuclear deterrent, if he agrees with General Chilton who told the Senate that current levels of nuclear forces are exactly what is needed for deterrence, and also whether he agrees with Secretary Gates' recent comments at the American Enterprise Institute that nuclear modernization programs are absolutely critical. So it was on the basis of the administration's commitments to our nuclear modernization program that some Senators agreed to support or to ratify the New START treaty. Let me turn now to the question of missile defense. During the consideration of the New START treaty, many of us made the fundamental point that with respect to missile defense, there was no meeting of the minds between Russia and the United States. While the administration insisted that there were no restrictions on missile defense, either legal or otherwise, the Russian side believed that ``the linkage to missile defense is clearly spelled out in the accord and is legally binding.'' That was noted by Russian Foreign Minister Lavrov on April 6 of last year. Of course, the administration was never willing to share with the Senate the negotiating record that the Russian negotiators obviously were aware of. Sharing the record with us might have cleared up just what understandings the Russians think they received during the negotiation of the treaty. In order to secure Russian support for the New START treaty and assuage their misplaced concern about U.S. missile defense activities, the administration initiated talks with Russia to find common ground on missile defense cooperation, and it cancelled a third site deployment in Poland and the Czech Republic. Or, as Under Secretary of State Ellen Tauscher characterized the purpose of missile defense cooperation in a speech of May 19, 2010: ``to turn what has been an irritant to U.S.-Russian relations into a shared interest.'' Although administration officials might deny this, I believe Russian officials were under the impression that in return for Russian support for New START, the United States would provide Russia not only the opportunity for missile defense technical cooperation, but that Russia would also play a role in defining future U.S. and NATO missile defense plans. Thus, President Medvedev told the Russian General Assembly in December 2010: I'd like to speak plainly about the choice we face in the next ten years: either we reach an agreement on missile defense and create a meaningful joint mechanism for cooperation, or if we fail to do so, a new round of the arms race will begin and we will have to make decisions on the deployment of new strike weapons. As it turns out, we didn't have long to wait until the Russians threatened this ``choice.'' In response to the recently concluded U.S. and Romanian agreement to base SM-3 block TB missiles in Romania in 2015, President Medvedev has again threatened the U.S. and NATO with an arms race if these planned deployments go forward. On May 18, 2011, President Medvedev told a gathering of journalists in Moscow that ``if we don't [forge a missile defense cooperation model], we will have to take retaliatory measures, which we do not want to have to do. This will mean forcing the development of our strike nuclear potential. Medvedev went on to reiterate a warning issued by the Foreign Ministry that Moscow may pull out of the new START disarmament agreement in response to the United States' position on missile defense. This is precisely what many of us predicted would happen if we ratified the New START treaty in December. I didn't think it would happen quite so quickly. This point was reiterated by President Medvedev following the recent G-8 summit in Deauville, France when he said, ``We're wasting time . . . if we do not reach agreement by 2020, a new arms race will begin . . . I would like my partners to bear this in mind constantly.'' The Russians are of one point of mind at the top of their leadership. They are threatening a new arms race. What they mean by that is, the United States reduces our capability to defend against missiles that could theoretically come from Russia. Is this the reset in relationships the administration promised? Did they manage to reset our relationship right back to the dark days of the Cold War? It appears from the comments of the President of the Russian Federation that this is precisely what happened. The Russian Foreign Minister has further said Russia needed ``legal assurances,'' that the proposed U.S. missile defense deployments were not aimed at Russian territory. Presumably, even the administration would agree no such ``legal assurance'' can be made. But, then again, could the administration include such an assurance in the Missile Defense Cooperation Agreement, MDCA, or the Defense Technology Cooperation Agreement, DTCA, the administration is discussing with the Russian Federation? Again, no Senator nor Senate staffer has been able to see the document that the administration has shared with Russian counterparts. So, we are left to wonder. Here we are, and the Senate, being part of the American Government, isn't even privy to what our administration is talking to the Russians about--matters on which eventually the administration is likely to seek our consent to. Remember, the Constitution provides for Senate advice and consent. What I have said before is if the Senate is to give its consent, we need an opportunity to provide some advice before the administration negotiates its agreements with Russia. Why not share these documents with the Senate--and the House--and remove any cause for concern, if, in fact, there is none? I also note Russian President Medvedev has sent a letter to the NATO-Russia Counsel outlining Moscow's position on a common missile defense system--which differs significantly from NATO's conception of two independently operated missile defense systems sharing some form of early warning data. These are two very different things. And, it is not as if Members of Congress have been ambiguous about our concerns. Following a 14 April letter to the President signed by 39 Senators, 4 Senators met with Senior Defense and State Department officials on May 15 to again express our concerns about sharing sensitive missile defense technical and sensor data with the Russians, and to better understand the content and legal authority of the draft Defense Technology Cooperation Agreement and Missile Defense Cooperation Agreement being discussed with the Russians. Moreover, the House Armed Services Committee just incorporated the New START Implementation Act into its version of the National Defense Authorization Act for Fiscal Year 2012, as well as the amendment offered by Representative Brooks that will prohibit the sharing of sensitive missile defense technology and data. How will the United States and NATO respond to this latest Russian intimidation? Will NATO alter its plans to accommodate the Russian objective of a ``sectoral'' defense system? Will the United States and NATO curtail deployment of phases III and IV of the European Phased Adaptive Approach? Phase IV is, of course, still just a paper missile, not something we developed, but it is part of our ultimate plan. Will the United States agree to share sensitive information or technology with Russia for the sake of a missile defense agreement? The administration informs us that these Russian threats are mere rhetoric, associated more with the upcoming presidential elections in Russia than with any true threats. And that Russia will not pull out of New START or begin a new arms race in response to U.S. missile defense plans. The administration assures us the United States will not alter its missile defense plans to accommodate Russian concerns. Nevertheless, the Congress needs better insight into administration plans for missile defense cooperation and missile defense talks with Russia than has thus far been the case. At the very outset, the administration created a separate venue from New START to discuss missile defense cooperation with Russia--this was the so-called Tauscher-Ryabkov track; despite repeated inquiries from Congress, the administration still refuses to provide meaningful details about the nature of these discussions. Likewise, we are interested to know where the administration will recommend basing a new missile defense early-warning radar, called a TPY-2 radar. Will it put the radar in the Caucasus, as the Bush administration planned to do, or will it seek instead to base the radar in a location less advantageous to the missile defense of the United States homeland, but more acceptable to the Russians--even if that means that an ally like Israel will be denied access to the data generated, by the radar, as Turkey has said it requires? To this end, and as I referenced earlier, 39 Senators sent a letter to the President on April 14 to inquire whether, contrary to the President's December 18, 2010 letter, we will make our missile defense decisions ``regardless of Russia's actions.'' The letter expresses serious concerns about reports the administration may provide Russia with access to sensitive satellite data and U.S. hit-to-kill missile defense technology, and urges the administration to share with Congress the materials on U.S. missile defense cooperation that have been provided, or will shortly be provided, to the Russian government. We still await these materials. Lastly, the administration owes Senators information about what national security staff member Michael McFaul, whom I understand has been recently nominated by the President to be the U.S. Ambassador to Russia, meant when he briefed the press on May 26 that ``we got a new signal on missile defense cooperation that as soon as I'm done here I'll be engaging on that with the rest of the U.S. government.'' I am concerned that my staff asked the National Security staff about this almost a week ago and have heard nothing back. I hope to hear back from the administration soon, especially if the administration expects the Senate to act promptly on Mr. McFaul's nomination. Mr. President I am deeply skeptical about the course the United States and Russia are on concerning missile defense. I think it should be abundantly clear that Senators and House Members will be paying very close attention to the development and deployment of the European phased adaptive approach to make sure it is done in a manner consistent with the security of the United States, without consideration to Russian ``understanding'' of what they think has been agreed to between the United States and Russia. I will be working with my House colleagues to ensure that it is very clear that the United States will accept no limitations on its missile defenses. But I note, as I said at the outset, it is interesting that things that were told to us at the time the Senate was debating the New START agreement have turned out not to be true, just as many of us predicted, starting with the proposition that the United States would be drawing our weapons down while Russia would not. It turns out that is what happened because the Russians were already at the level they negotiated us down to. So the question is, What did we get for our unilateral concessions? It appears to me that the only thing we got is an understanding by Russia that they are also going to be able to talk us down from our missile defense plans that could protect both the United States and allies in Europe or that as an alternative Russians would be part of a cooperative missile defense program which would, of necessity, require the sharing of economic data that would be inimical to the U.S. national interests. I express these concerns in the hope that we can receive information from the administration that might allay our concerns, persuade us that it is not involved right now in negotiations, in effect, behind the Senate's back, and the best way to assure us is to share the information with us that we requested in letters we sent previously. I hope the administration will, next time it asks for our consent, be able to say it had already asked for our advice because I am afraid, if it does not, the Senate is much less likely to provide its consent to any agreements that might be submitted. Exhibit 1 [From RealClearPolitics.com, June 6, 2011] Obama Tunes Out, and Business Goes on Hiring Strike (By Michael Barone) Last week, I noted that various forms of the word ``unexpected'' almost inevitably appeared in news stories about unfavorable economic developments. You can find them again in stories about Friday's shocking news, that only 54,000 net new jobs were created in the month of May and that unemployment rose to 9.1 percent. But with news that bad, maybe bad economic numbers will no longer be ``unexpected.'' You can only expect a robust economic recovery for so long before you figure out, as Herbert Hoover eventually did, that it is not around the corner. Exogenous factors explain some part of the current economic stagnation. The earthquake and tsunami in Japan caused a slowdown in manufacturing. Horrendous tornados did not help. Nor did bad weather, though only a few still bitterly cling to the theory that it's caused by manmade global warming. But poor public policy is surely one reason why the American economy has not rebounded from recession as it has in the past. And political posturing has also played a major role. Barack Obama and the Democratic congressional supermajorities of 2009-10 raised federal spending from 21 percent to 25 percent of gross domestic product. Their stimulus package stopped layoffs of public employees for a while, even as private sector payrolls plummeted. And the Obama Democrats piled further burdens on would-be employers in the private sector. Obamacare and the Dodd-Frank financial regulation bill are scheduled to be followed by thousands of regulations that will impose impossible-to- estimate costs on the economy. That seems to have led to a hiring freeze. The Obama Democrats can reasonably claim not to be responsible for the huge number of layoffs that occurred in the months following the financial crisis of fall 2008. And Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke did manage to help stabilize financial markets. But while the number of layoffs is now vastly less than in the first half of 2009, the number of new hires has not increased appreciably. Many more people have been unemployed for longer periods than in previous recessions, and many more have stopped looking for work altogether. It's hard to avoid the conclusion that the threat of tax increases and increased regulatory burdens have produced something in the nature of a hiring strike. And then there is the political posturing. On April 13, Barack Obama delivered a ballyhooed speech at George Washington University. The man who conservatives as well as liberal pundits told us was a combination of Edmund Burke and Reinhold Niebuhr was widely expected to present a serious plan to address the budget deficits and entitlement spending. Instead, the man who can call on talented career professionals at the Office of Management and Budget to produce detailed blueprints gave us something in the nature of a few numbers scrawled on a paper napkin. The man depicted as pragmatic and free of ideological cant indulged in cheap political rhetoric, accusing Republicans, including House Budget Committee Chairman Paul Ryan, who was in the audience, of pushing old ladies in wheelchairs down the hill and starving autistic children. The signal was clear. Obama had already ignored his own deficit reduction commission in preparing his annual budget, which was later rejected 97-0 in the Senate. Now he was signaling that the time for governing was over and that he was entering campaign mode 19 months before the November 2012 election. People took notice, especially those people who decide whether to hire or not. Goldman Sachs' Current Activity Indicator stood at 4.2 percent in March. In April--in the middle of which came Obama's GW speech--it was 1.6 percent. For May, it is 1.0 percent. ``That is a major drop in no time at all,'' wrote Business Insider's Joe Weisenthal. After April 13, Obama Democrats went into campaign mode. They staged a poll-driven Senate vote to increase taxes on oil companies. They launched a Mediscare campaign against Ryan's budget resolution that all but four House Republicans had voted for. That seemed to pay off with a special election victory in the New York 26th congressional district. The message to job creators was clear. Hire at your own risk. Higher taxes, more burdensome regulation and crony capitalism may be here for some time to come. One possible upside is that economic bad news may no longer be ``unexpected.'' Another is that voters may figure out what is going on.

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

Mr. KYL

Mr. KYL. Mr. President, I would like to talk about two subjects briefly this afternoon. The first is the relatively bad news about unemployment in the country; the fact that the latest numbers are out and the country has not produced as many jobs as had been hoped for. In fact, it added only 54,000 payroll jobs in May and thereby fell short of the 130,000 to 150,000 which are needed each month just to keep pace with population growth. So we lost ground. As a result, the unemployment rate has now gone back up to 9.1 percent. It is not just the lack of jobs but also other economic news. Factory orders were down 1.2 percent in April, so we are not growing there. Interestingly, the Home Price Index, which is something very important in my State, the S&P Case-Schiller Home Price Index edged down .2 percent in March and is now 3.5 percent from this time a year ago. All of these and other pieces of the news present a very bleak picture for economic recovery. One of the interesting commentators on this is Michael Barone, who is well known to most of us involved in political work. He had an interesting op-ed today in the Washington Examiner with the unfortunate title, ``Obama Tunes Out, and Business Goes on Hiring Strike.'' The problem is, there is some information to back up the title of his piece. He is reflecting on government policies the last couple of years such as growing government spending as a percent of GDP, which has gone up from 21 percent to 25 percent. So we have been expanding government borrowing and spending at the same time as the economy is depressed. That included the time in which the failed stimulus plan was supposed to have provided economic growth and job creation. It also included the time of the health care entitlement, the Dodd-Frank financial regulation bill, and so on. So let me quote from the piece. He said: It is hard to avoid the conclusion that the threat of tax increases and increased regulatory burdens have produced something in the nature of a hiring strike. In relation to the President's speech at George Washington University, where the President had sort of repackaged his Federal budget, Barone says: The message to job creators was clear. Hire at your own risk. Higher taxes, more burdensome regulation, and crony capitalism may be here for some time to come. I ask unanimous consent to have the article by Michael Barone dated June 6, 2011, printed in the Record at the conclusion of my remarks.

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from Oklahoma (Mr. Coburn), the Senator from South Carolina (Mr. Graham), the Senator from Texas (Mrs. Hutchison), the Senator from North Dakota (Mr. Hoeven), and the Senator from Mississippi (Mr. Wicker).

Mr. KYL

Mr. KYL. The following Senator is necessarily absent: the Senator from Kansas (Mr. Roberts).

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from Kansas (Mr. Roberts) and the Senator from Florida (Mr. Rubio).

Mr. KYL. The following Senators are necessarily absent: the Senator from Kansas (Mr. Roberts) and the Senator from Florida (Mr. Rubio).

Mr. KYL. The following Senators are necessarily absent: the Senator from Kansas (Mr. Roberts) and the senator from Florida (Mr. Rubio).

Mr. KYL

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

Mr. KYL

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

Mr. KYL

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

Mr. KYL

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

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from Missouri (Mr. Blunt), the Senator from Texas (Mrs. Hutchison), and the Senator from Kansas (Mr. Roberts).

Mr. KYL

Mr. KYL. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. KYL

Mr. KYL. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from Tennessee (Mr. Alexander), the Senator from Missouri (Mr. Blunt), the Senator from Massachusetts (Mr. Brown), the Senator from Mississippi (Mr. Cochran), the Senator from Tennessee (Mr. Corker), the Senator from South Carolina (Mr. Graham), the Senator from Oklahoma (Mr. Inhofe), the Senator from Utah (Mr. Lee), the Senator from Idaho (Mr. Risch), the Senator from Florida (Mr. Rubio), the Senator from Alabama (Mr. Shelby), and the Senator from Louisiana (Mr. Vitter). Further, if present and voting, the Senator from Tennessee (Mr. Corker) would have voted ``yea,'' and the Senator from Tennessee (Mr. Alexander) would have voted ``yea.''

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from Texas (Mrs. Hutchison), the Senator from Kansas (Mr. Moran), and the Senator from Louisiana (Mr. Vitter).

Mr. KYL

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

Mr. KYL

Mr. KYL. Mr. President, I want to speak for a few minutes today about the effort that we are undergoing right now with the Vice President and our colleagues in the House of Representatives to find a way to constrain spending, reduce our deficits and debt sufficient to warrant an increase in the debt ceiling, as the President has asked us in the Congress to do. We are told by the Secretary of the Treasury that by around the first part of August the United States will run up to the debt ceiling and, therefore, Congress needs to pass legislation to extend that authority. Essentially, this is because financial commitments the United States has already made can only be paid if we borrow money to pay those financial commitments. Therefore, the debt ceiling would need to be increased. Members of both bodies on both sides of the aisle have acknowledged that one of the primary things we need to do at the same time we raise the debt ceiling--if that is to be accomplished--is to ensure that we don't have to keep doing that in the future; that is to say, that we don't keep piling on more debt by increasing spending in the future so that certain things will be necessary at that time: constraints on future spending; limitations on the ability of Congress and the President to pass additional appropriations for spending; for example, setting limits on our budget for the next at least couple of years so we know exactly how much Congress would be authorized to spend. Of course, those limits should take us back in time. They should not increase the amount of spending but should result in reductions. Tackling entitlements--we know the big money is in entitlements such as Medicaid, Medicare, Social Security, and other forms of what is called mandatory spending, spending that is committed to groups of Americans that doesn't require congressional action but money that we know we are going to have to spend in the future--enormous sums, in the trillions of dollars. If we are not able to trim that in one way or another, or at least stop the increases in growth, we are not going to be able to afford those programs in the future and would, therefore, have to continue to raise the debt ceiling. Another question that has arisen is whether it would be helpful in this connection to raise taxes. I have said, and the Republican side has said, we will not do that as part of this exercise in extending the debt ceiling. There may come a point in time later this year or next year where all of us would get together and engage in what some have called fundamental tax reform--or I like to call it progrowth tax reform because I think a lot of economists believe our Tax Code today is not conducive to economic growth, and were we to make it much simpler and do things such as reducing the corporate tax rate, for example, we can be much more competitive with our foreign trading partners. The President himself has made the point that we can reduce the corporate tax rate were we to eliminate what some call loopholes, and thereby reduce the amount of money we have to collect through the tax rate itself. This is a potential when we get into that kind of reform. I want to distinguish the point of rebalancing our Tax Code to get a progrowth kind of Tax Code with the possibility of generating more revenue to deal with our debt situation. Those are two totally different situations. While I would be very much in favor of taking a look at these tax expenditures, various subsidies, for example, to different groups to see whether we could reduce some of those, thereby reduce tax rates in a revenue-neutral manner so our Tax Code would be more conducive to growth, but in a revenue-neutral manner, meaning not in order to raise revenues but in order to have a more sensible Tax Code so we can be more competitive with our trading partners, for example, that is what the President, as I understand it, proposed relative to our corporate tax rate, which is the highest in the world today. If we can get that down from 35 percent to 20 or 25 percent, we can be much more competitive with our trading partners. One way is to reduce so-called tax expenditures. To give an example or two, we have significant tax credits and deductions that are taken for the production of things such as ethanol or for production of certain kinds of weather stripping equipment or solar energy equipment. This is an effort to promote so-called green energy. Those are pretty big subsidies. They are tax credits or deductions called tax expenditures. Were some of those to be eliminated or reduced, then we can offset that increase in revenue with a reduction in the tax rate and still have as much revenue coming into the Treasury but have a more sensible Tax Code. Let's contrast that with the situation on the debt ceiling question because that is the one before us right now. We are going to have to act on the debt ceiling in the next couple of months or so. The question is, How should we deal with our ballooning deficits and debt in order to warrant increasing the debt ceiling above what it is today? The answer, of course, is to reduce spending, not raise revenues or increase taxes. I don't think anybody is suggesting increasing revenues by increasing tax rates. But some people have said we can eliminate some of these loopholes or tax expenditures, and that is a way to collect more revenue. If a company cannot take a certain credit or deduction, it is going to have to pay more in taxes. I wish to make the point that, no if we are going to get into that kind of discussion, we should do it in the context of reforming our Tax Code so we can use those increased revenues in order to reduce the tax rates, as I said before, so that our country can be more competitive. That is the context in which we should be discussing the reduction or elimination of some of these so-called tax expenditures. Just in looking at this in an abstract way--and I will get more specific about numbers--our problem is spending. We have increased spending so much more than it has ever been in the past that we are getting very deep in debt. To just give a comparison, spending is over 25 percent of GDP. That is the amount we are now spending at the Federal Government level. Our historic level is just above 20 percent of the GDP. That is an enormous increase in the amount of spending by this country. Some will point out that the revenues collected by the Treasury are also down, and that has contributed to the deficit. To some extent that is true. What are the reasons? It is primarily because of the recession that we have been in since the end of 2006--the decrease in the amount of money that individuals and businesses are making, and therefore a reduction in the revenues collected as taxes by the IRS. So revenues are down, but it is due to the recession that we have. We have not cut tax rates in the last few years--since 2006--for example. The last time we had any kind of tax reduction was as a result of the 2001 and 2003 so-called Bush tax cuts. But we were generating a lot of revenue in this country before the recession. The recession caused us to generate less as families, as State and local governments, and as the Federal Government. But CBO figures demonstrate that under any of the budgets offered, including the Obama budget, we will be back to historic average levels of tax collections in just the next few years--something on the order of 20 percent of our gross domestic product. Revenues are not the problem. They are going to be back where they have always been. Our problem is the spending, as I said. The spending in this country is now above 25 percent. I misspoke a moment ago when I was talking about collections. The tax collections in this country have averaged between 18 and 19 percent of GDP. The spending has been a little above 20 percent. So the revenues are going to get back up to that 18 or 19 percent under any of the budgets that have been suggested--the Ryan budget, the Obama budget, and others. The problem is spending. Under the Obama budget, spending never gets below 23 percent of the gross domestic product. In the Ryan budget, it goes from the 25 percent that we are at today to below 20 percent. I think that after 10 years, in the Ryan budget passed by the House of Representatives, it is about 19.1 percent of the gross domestic product. That is a way to get spending down to historic levels. Revenues will be back up to historic levels, and that is the way we have both a vibrant economy and we produce the revenues the Federal Government needs to operate without having to borrow 40 cents or 42 cents on every dollar as we have to do today. When we are talking about how to get the budget better balanced, how to reduce our deficits, we should not be looking at the revenue side or the taxing side; we should be looking at the spending side. On spending, we know the big money is in the entitlements, not the discretionary part of the budget. We need to, as a downpayment, be looking in the order of magnitude of about $2 trillion. Speaker Boehner has said that if the administration wants to increase the debt ceiling by $2 trillion, then we should show $2 trillion in savings. If it is $1 trillion, then make it $1 trillion. So far in our negotiations, we are only talking about a couple hundred billion dollars. We have to get up to the $1 trillion and $2 trillion level. Over the course of the 10 years, we are going to have to at least double that to more than $4 trillion if we are going to handle the long-term debt problem. That is how big it is. Under the Ryan budget, the actual debt ceiling is increased by $5 trillion over 10 years. So we are not talking about slashing everything in half. We are talking about continuing to have to borrow more money to pay our bills. But under the Obama budget, the amount we would have to borrow, in addition to what we have, is $12 trillion. President Obama would be asking us to raise the debt ceiling by another $12 trillion, and that is not sustainable in this country. It has to be more along the line of the Ryan budget, as I said. That means we are going to have to come up this year with at least $4 trillion--I would say between $4 trillion and $6 trillion--in savings in order to be able to bend this spending curve downward over time. That means at least a couple trillion dollars as a downpayment, at least double that over this 10-year period, and that means a lot more than what we have been talking about in our negotiations so far. I do not doubt the good will of the parties to achieve that objective, but it cannot be achieved by looking at just domestic discretionary spending. We have to look at fundamental entitlement reform in order to achieve those kinds of savings. For those who say that may change the Medicare Program or it may change the Social Security Program, two things: First, nobody is talking about changing any of those programs for anybody who is currently on them or even somebody who is going to be on them within a 10-year period of time. We are not talking about people who are on Social Security or people who are even 9 years away from Social Security. Second, with respect to the benefits that are promised in these programs, understand that if we do not do something about them now, those benefits are not going to be there in 15 or 20 years. In fact, under Social Security, the law is that when it no longer has the benefits, the benefits stop. This is not a matter of either keeping in law what we have right now or nothing; this is a matter of either fixing the programs now or having a dramatic reduction in benefits on down the road. That is why we need to tackle this issue now. One of the reasons I wanted to discuss this on the floor today is because there is some misunderstanding of comments I made on television yesterday, and I think it is easy to misunderstand people when they talk about raising revenue in the context of dealing with a budget deficit. Republicans are simply not going to raise tax rates in order to try to reduce this deficit with more revenue as opposed to savings. It is much different to talk about that than it is to say there are tax expenditures we can deal with, and if we can eliminate those or reduce them, then we can also reduce our tax rates and make our Tax Code more competitive. That makes a perfect amount of sense. But I don't think we will be able to do that within the next 2 months. My guess is it is either going to be later this fall or early next year before we are able to achieve that kind of bipartisan revision of our Tax Code, if we can even do it then. I hope we can because I think there is a recognition by a lot of folks that there are a lot of these tax expenditures in the code that do not need to be in the code. They pick winners and losers. The more we can do away with and thereby reduce tax rates, the better off we will be. I am hopeful we will, through these bipartisan negotiations, be able to come together on significant savings. The last point I will make is I would not be concerned, however, that the United States of America will ever default on our debt. We will not. The President has made it clear, the Secretary of the Treasury has made it clear that we can't. In fact, if we look at article IV of the 14th amendment, it says we can't. So I don't think any creditor should be of the view that we are not going to pay them when their T-bill comes due. That is not going to happen. Nonetheless, it is not a good situation when the income of the government is less than the bills we need to pay because even though we may pay creditors, that may mean, Mr. President, your paycheck and mine might be paid 2 weeks late or something like that, and I am sure all of us would like to see our bills paid on time. But I think we can come together and even avoid that result if we are able to work together as both sides of the aisle and as both bodies in the Congress have committed themselves to do. Mr. President, I suggest the absence of a quorum.

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from North Carolina (Mr. Burr), the Senator from Indiana (Mr. Coats), the Senator from Mississippi (Mr. Cochran), the Senator from Texas (Mrs. Hutchison), the Senator from Alaska (Ms. Murkowski), and the Senator from Louisiana (Mr. Vitter).

Mr. KYL

Mr. KYL. Mr. President, on behalf of myself and Senators McCain, Sessions, Cornyn, Vitter, Wicker, and Inhofe--and probably others before the end of the day--I am going to introduce legislation called the New START Implementation Act, which I would like to describe briefly. This legislation is nearly identical to a companion bill introduced in the House of Representatives by Mr. Turner, the chairman of the Strategic Forces Subcommittee of the Armed Services Committee. He has been a leader in the House on nuclear and missile defense issues. I understand many of the provisions have been included in the chairman's mark of the National Defense Authorization Act in the House and that the remainder will be introduced as amendments later today at a full committee level. I specifically wish to thank Chairman Turner for his leadership. Nuclear deterrence issues are among the most complicated and technical issues that we in the Congress are confronted with, and he deserves full credit for tackling them with vigor and for mastering them so quickly. Similar to the House legislation, it is my hope that the Senate bill will be incorporated into the Senate version of the National Defense Act for fiscal year 2012. Let me now explain a little bit why I think this legislation is necessary at this time. I voted against the New START treaty for reasons I have made clear previously on the floor. But I recognize the President's stated commitment to the modernization of our nuclear deterrent is necessary and is important and that Congress needs to codify the commitments made during the debate on the New START ratification process as well as the agreements the President has indicated through his comments and letters to us. This is important for the future, for future Congresses and future Presidents, because this process is going to take place over a period of at least 10 to 12 years. Modernization of our nuclear weapons facilities and the strategic delivery systems all will require commitments over the space of another decade or more. Memories fade, people's interpretations may change over time, circumstances change, and what we want to make sure of is that over the time period involved during which this modernization process must occur, the understandings that were agreed to at the time of the START treaty ratification will be memorialized in statute and complied with by the Congress and by the administration as time goes on. The five key features of the legislation are these. First, it would link the funding of the administration's 10-year nuclear modernization program with any U.S. nuclear force reductions during the implementation phase of the treaty. What that means is, as in the later years of the treaty, funding is necessary for the demobilization, the dismantling of some of the weapons that are called for to be dismantled under the treaty but that funding is coordinated with the funding for the modernization program which is going on at the same time. It urges the President to stand by the timelines he pledged on warhead modernization in the revised plan he submitted in November of 2010. This is key to ensuring that Congress will support these modernization efforts that were deemed necessary in conjunction with the New START treaty. The second thing the bill does is to ensure that nuclear doctrine and targeting guidelines and the New START force levels that the former STRATCOM commander, GEN Kevin Chilton, said were ``exactly what is needed'' are not arbitrarily cut by the administration that seems eager now to go to even lower levels, perhaps even unilaterally, than were negotiated in the START treaty. The President has indicated his desire for a world without nuclear weapons and said he would like to do new things in the future to reduce the numbers of these weapons. We simply want to make certain the guidelines that are militarily necessary reference points for the number of weapons we have, the types we have, how they are deployed and so on, are not modified in order to be a reason for or an excuse for reducing strategic weapons thereafter. I think this is necessary because the President's National Security Adviser said on March 29 that, even as ``we implement New START, we're making preparations for the next round of nuclear reductions.'' In developing options for further reductions, he said: ``We need to consider several factors, such as potential changes in targeting requirements and alert postures that are required for effective deterrence.'' We were told the New START force levels were exactly what is needed for deterrence. Yet now the administration may seek to alter deterrence requirements in order to justify further reductions. My view is, the administration cannot use one set of facts to ratify the treaty and then immediately change those facts in order to suit its Global Zero agenda. Forty-one Senators made clear in a letter to the President on March 22 that we expect the administration to consult with Congress before directing any changes to U.S. nuclear weapons doctrine or proposing further strategic nuclear reductions with Russia. No consultations have occurred to date, and we expect that those consultations would occur before any discussions with Russians take place. Third, the legislation would ensure that the triad of strategic nuclear delivery systems--that is to say, the bombers, cruise missiles, ICBMs and ballistic missile submarines--are modernized and that their reliability is assessed each year. Even today, we are still uncertain about the administration's plans to modernize the ICBM leg, nor do we know if the new bomber will be nuclear certified upon its deployment. For example, according to an April 22, 2011, press account in the Global Security Newswire, ``The US Airforce cannot say exactly how much it will spend to explore options for modernizing its ICBM fleet, nor where the money will come from.'' Obviously, if we are currently planning the modernization of these fleets, but we do not even know where the money is going to come from for the planning, we have a problem that needs to be resolved now rather than later. That is what the third requirement of the legislation would require. Fourth, the bill would affirm that the New START treaty contains no limitation on U.S. missile defense beyond the language in article V, section 3 and that any future agreement with Russia that would attempt to limit U.S. missile defenses could only be done by a treaty that would require the Senate's advice and consent. This is no different than what we all talked about on a bipartisan basis when the New START treaty was ratified, but we think these commitments should actually be codified to ensure they are kept. Finally, the bill would counsel against unilateral reductions or withdrawal of U.S. nonstrategic nuclear weapons in Europe without the unanimous approval of NATO's members. Obviously, in NATO, one State should not be permitted to end NATO's successful article V policy, the policy that an attack on one is an attack on the others and will be met with resistance from the other NATO allies. In conclusion, I think this bill should enjoy broad congressional support, given the fact that it merely builds on what the Senate and the administration agreed to in the New START resolution of ratification with respect to nuclear modernization and our freedom of action to develop and deploy missile defenses. It ensures that a future Congress and a future President understand and support the current commitment to nuclear modernization and ensures that there will be no further limitations on our missile defense efforts. Finally, it builds in vital checks to permit congressional oversight of impending activities by the administration that portend significant changes to U.S. nuclear doctrine, further strategic nuclear reductions and potential activities with, and possibly concessions to, Russia with regard to missile defense and tactical nuclear weapons in Europe--all of which might be counter to U.S. security. I will be pleased to add other colleagues as cosponsors to the legislation. As I said, I intend to actually introduce this toward the end of the day, and I am sure we will have additional cosponsors by that time. I suggest the absence of a quorum.

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from Mississippi (Mr. Cochran), the Senator from Alaska (Ms. Murkowski), and the Senator from Louisiana (Mr. Vitter).

Mr. KYL

Mr. KYL. The following Senator is necessarily absent: the Senator from Louisiana (Mr. Vitter).

Mr. KYL

Mr. KYL. Mr. President, I note that Vice President Biden was just here in the Chamber for the swearing-in of our newest Senator, Dean Heller from Nevada. I add my congratulations to now-Senator Heller joining this body.

Mr. KYL

Mr. KYL. Vice President Biden has been kind enough to host discussions--starting last week and going into this week and perhaps beyond--with Members of the Senate and the House of Representatives to try to find a way to reduce the huge debt that hangs over the United States, as a prelude, I am sure he would put it, to the Congress acting on the President's request that Congress increase the debt ceiling. There have been generally two ways suggested on how to deal with our debt. Many Democrats believe the wealthy in the United States do not pay enough taxes, and therefore one way to reduce the debt is for taxes to be increased, especially on the wealthy. Most Republicans believe that is a bad idea, that since debt is our problem and we got into debt because we have been spending too much, the better way for us to deal with the problem is to begin reducing our spending and to make sure over the years we are able to do that. There are a couple of interesting things that have just come out in the news recently that I think bear on this argument. A lot of folks wonder about the debt burden in the United States, and I think it is useful to point out the fact that last week the Wall Street Journal reported that the Joint Committee on Taxation found that ``the percentage of U.S. households paying no federal income tax . . . reached 51% for [the year] 2009.'' I think that is the first time in the history of America that over half of Americans didn't pay Federal income taxes. I do not think that is a good thing. While certainly people in the lower income brackets are not able to pay very much in the way of taxes, I think even a very small amount, an affordable amount, would be appropriate so everybody has what they call skin in the game, so everybody understands the relationship between the burdens and the benefits of government. I would not impose a significant tax on the lower half or certainly not the lower 10 percent, but I think it is important for all Americans to know we all have a stake in this, and that more than half of the people cannot just expect the so-called wealthy to bear all of the burdens of government. But the question remains, are American wealthy taxpayers undertaxed? I think a useful measure to look at here is a comparison with other countries, for example. The OECD countries--which stands for Organisation for Economic Co-operation and Development--are generally regarded as the most advanced economies in the world, and the United States is one of those countries. A study that is based on 2008 statistics found that the highest earning 10 percent of the U.S. population paid the largest share among 24 countries examined, even after adjusting for their relatively higher incomes, and it concluded: ``Taxation is most progressively distributed in the United States,'' the OECD concluded. The bottom line here is that for a country to be competitive, the people who provide the capital for job creation, for economic growth, have to have some capital remaining after they have earned it in order to invest that capital, return it to their businesses, hire more people, be more productive, create more wealth, and thereby provide for the families of the people who own the businesses and, by earning more income, increase the amount the Federal Government and the State government take in as revenues. Republicans are very happy to concede it would be helpful if the government has more revenues in order to help close this debt gap we have. The question is how we get more revenues. We believe more revenues are a function of a growing economy. Here too some statistics that just came out over the weekend, I believe it was, demonstrated that we can actually delay the increase in the debt ceiling by some period of time because revenues to the Federal Treasury have been a little higher than previously expected. Why? Because the economy grew more than expected, and as people made more money, they therefore paid more in withholding and in Federal income taxes. That is the way for the government to get more revenue--for the economy to do better, for Americans to do better. So if you tax more the people who are the ones likely to do the investing into businesses, will you get more investment? Will you get more Federal revenue? Well, you will get a little bit more to begin with, but in the long run, you will get less. One of the reasons it is not a good idea to tax more the very people whom we are referring to in this study is because half of all the small business income reported is reported as part of the highest income tax bracket for individuals. In other words, small businesses do not pay as corporations, they pay as individuals, and when a small businessman has to report his earnings, he reports all of the income from his enterprise. A lot of that is business expense, but that is how he has to report it. So you are talking here about half of all that income reported being taxed at a higher rate, if, in fact, the President and some of his colleagues have their way. That will reduce the amount of investment and growth in the economy and thereby make it harder for us to pay off this large debt. The advocates of a gigantic tax increase are really very shortsighted, therefore, in assuming that if they raise tax rates, they are going to get more revenues. That is what they tried to do in Japan during the late 1990s. It did not work out. Japan went back into a deep recession, and it is not going to be possible for them to generate existing revenue with their higher tax rates. The way you get robust growth is not with higher tax rates but with lower tax rates. A rapidly expanding economy does create new jobs and income for investment and wealth-creating enterprises, and obviously some of that wealth flows back to the government and can be used to reduce the debt. But the policy tools we decide upon in these negotiations will have a lot to say about how we are able to reduce the debt and whether part of that will be a result of economic growth in the future. Obviously, the point here is not just to have economic growth so the Federal Government can earn more in income tax revenue but to promote American prosperity and a better future for our families. So the question is, Will we impose tax hikes that discourage investment and punish job creation or will we make the tax system more efficient and conducive to growth? I wish to cite a couple of studies to show why it is most important for us to focus on reducing spending rather than raising tax rates, because spending cuts, not tax hikes, are the best way to close the massive budget gap and help to produce economic growth in our country. One study was performed by two Harvard economists, Alberto Alesina and Silvia Ardagna. By studying large-scale fiscal adjustments by wealthy developed countries from 1990 to 2007, they determined that ``spending cuts are much more effective than tax increases in stabilizing the debt and avoiding economic downturns.'' Moreover, they found ``several episodes in which spending cuts adopted to reduce deficits have been associated with economic expansions rather than recessions.'' Two economists at Goldman Sachs, Ben Broadbent and Kevin Daly, undertook a similar study and reviewed every major fiscal correction in wealthy nations since 1975. They found: Decisive budgetary adjustments that have focused on reducing government expenditures have (i) been successful in correcting fiscal imbalances; (ii) typically boosted growth; and (iii) resulted in significant bond and equity market outperformance. Tax-driven fiscal adjustments, by contrast, typically fail to correct fiscal imbalances and are damaging for growth. So reducing spending was the way not only to reduce the debt of the country, but it also boosted growth; whereas, tax-driven adjustments had exactly the opposite effect and failed to correct fiscal imbalances and were damaging for growth. A final study--and I think this is interesting because it focuses on what we think are big-spending countries. It is by the same two economists, Broadbent and Daly. They pointed specifically to Ireland, Sweden, and Canada. They pointed out cases driven by cuts in public spending. Sweden, in particular, which is famous for being a generous welfare state, was able to trim the size of government substantially-- all of which suggests to me that if Stockholm can do it, Washington ought to be able to do it today. Reducing the short-term deficit and stabilizing the long-term debt are critically important to American prosperity and living standards, and if you do it by reducing spending rather than increasing tax rates, you can also have the additional benefit of increasing prosperity not just for businesses and families but for the U.S. Government, which would then make more in terms of income tax revenues. The bottom line here is when we work to forge this bipartisan compromise that everybody is looking to us to reach, we should bear these basics principles in mind: Cutting spending, not raising taxes, is the answer. I ask unanimous consent to have two documents printed in the Record. The first one was published in the National Review Online, dated May 9, called ``The Future of American Prosperity,'' which I authored. The second is a publication which was in weeklystandard.com on May 16, by Frederick Kagan and Kimberly Kagan.