Jon Kyl

Mr. KYL

Mr. KYL. Go ahead. I will yield to my colleague.

Mr. KYL. Let me answer a question with a question. First of all, given the fact that I think we are taking 30-minute segments each and we are having a debate here, can we agree that we will debate until 7 o'clock, and you can have half the time and I will have half the time? Either that or I am going to have to quit yielding to make my points.

Mr. KYL. And I am happy to do it either way.

Mr. KYL. Let me respond to this question.

Mr. KYL. Mr. President, first of all, this is the kind of engagement we need on this treaty and on so many other issues in this body. Too many times it is a Senator coming down and giving a speech, and half of us or more are not listening. And this kind of colloquy can develop more useful material for our colleagues and for the record than anything else. So I am very happy to engage in it. I just want to make sure I do not run out of my time with my colleague's questions. But here is how it relates, and here is the importance. We are being told that even though the delivery systems--and remember, this treaty deals with warheads and delivery systems. Let's leave the warheads off to the side for a moment. The delivery systems-- which are the submarines with their missiles, the long-range bombers, with cruise missiles in some cases, and our ICBM force and the Russian counterparts--those delivery systems are constrained in this treaty. The numbers are brought down to 700 deployable systems. So the question we have asked, naturally enough is, Is that enough? Will that work to cover all of the targets we need to cover? I talked this morning about--and the answer to that question depends in part on what our future plans are because--take the B-52. Most of the pilots who are flying B-52s--I think we are two generations beyond the time these B-52s were built. These are old, aging aircraft. And everybody realizes even the B-1s and to some extent the B-2s need to be replaced. So the decisions to do that need to be made very soon. Whether 700 is a good number will depend on whether we have an adequate triad to deliver these weapons when the time comes. So naturally we ask the question, What is our triad going to look like? It is true that some of these systems--the new systems that replace what we currently have--will not be available until outside the 10-year limit of the treaty. But it is also true that every one takes an inordinate amount of time. How do they take so much time? I don't know. It seems as though in World War II we had all kinds of weapons systems come together to be built and fight the war and it is over in 5 or 6 years, but nowadays it takes 5 or 6 years just to get something ready to go, and then it takes them that long to deploy. So these are long timeframes for development and deployment. It is true the Navy has already made the basic decision for the submarine, but I haven't mentioned the Navy. That is not my concern. But my concern is the IBM force and the bomber force. I will leave the point with this: What is troubling to me is that on the bomber force, our administration is unwilling to commit we will have a bomber triad nuclear capable. That is an important decision, because if we are talking about 700 delivery vehicles that will not include nuclear-capable bombers, I have a problem. The reason is, because when you get briefed on how we are going to deliver these weapons if, God forbid, they ever have to be delivered or how we are going to deal with a potential Russian breakout, for example, or how we are going to deal with a problem if, let's say, we have an issue with one of our submarine or ICBM components to the triad, if we don't have a bomb-carrying or cruise missile-carrying nuclear capability with our bombers, then it is quite obvious the viability of our triad is implicated. So we have to know these things. It is not some esoteric question. We are talking about delivery systems being brought down to 700 and is that too low. It is not too low if we have a very viable triad, but it becomes too low if our triad is not viable. In the time remaining, let me talk about missile defense. This is something a lot of my colleagues have talked about. It is kind of core to the concerns a lot of us have with the treaty and, frankly, my ultimate support or not will depend, to some extent, on how we resolve this issue, whether it is by amendment to the preamble or the treaty or the resolution of the ratification or a combination of things. But, clearly, this treaty implicates U.S. missile defense, and that is wrong. One of the chief achievements of the Bush administration was to finally decouple missile defense and strategic offensive weapons and the treaties that deal with strategic offensive weapons. It was somewhat limited in the START treaty, but in the Moscow Treaty of 2002 we said: We are going to reduce our weapons. If the Russians want to do the same, that is fine with us. We don't need a treaty to deal with that. The Russians essentially said: We want a treaty, and we want you to limit your missile defenses. We said no, and they eventually relented and said OK. I have spoken with Secretary Rice and Under Secretary Feith and other people in the administration who count it as one of their achievements, the fact that we finally decoupled those two issues. In this treaty, they are right back together again and in a way that is inimicable to other defenses by the United States. That is what I want to focus on. We don't think there should be any limitations on U.S. missile defense. Yet the New START treaty not only contains specific limitations, though we were told there wouldn't be any, but it also reestablishes this unwise linkage I talked about in the preamble. Let me quote three things that Under Secretary Tauscher said as of March 29 of this year: The treaty does nothing to constrain missile defense . . . this treaty is about strategic weapons. There is no limit on what the United States can do with its missile defense systems. The third quote: There are no constraints to missile defense. Those three statements are not true because it turns out there are limitations and constraints specifically in the treaty. Article V, section 3 specifically constrains a particular kind of missile defense, the United States using a strategic offensive silo, for example, to use for defense. We have done that before. Our current plans are not to do it again because it is expensive. We might not do it in the future. This administration says it doesn't want to, but it is certainly constraining. How can you say those three statements by Under Secretary Tauscher are true? They are false. The administration simply says: Well, yes, there are limits, but we don't intend to do that anyway, so it is kind of a theoretical limit. Well, in the first place, why is there a limitation on any missile defense capability in this treaty? We thought this was about, as Secretary Tauscher said, strategic weapons. Well, it turns out the Russians, of course, want to make it also about missile defense. One way they make it about missile defense is by article V, section 3 or paragraph 3, specifically constraining a particular way we would develop missile defense. That is what we object to, that linkage. Why is that important? Because the Russians have always wanted to limit U.S. missile defenses, and this now gets the foot in the door for them to argue that under the treaty, they would have a right to withdraw if we improve our missile defenses. That gets to the real issue, and that is the preamble to the treaty. I wish to quote from Richard Perle and Ed Meese, both of whom served in the Reagan administration. Richard Perle was with President Reagan at Reykjavik, a seminal moment in arms control history and for the Reagan administration. It was a time when President Reagan decided missile defenses for the United States were so important that he would walk away from a major strategic offensive weapon proposal that had been made to him by President Gorbachev. Here is what they write: With this unfortunate paragraph, New START returns to the old Cold War `balance of terror' and assumes that attempts to defend the U.S. and its allies with missile defenses against strategic attack are threatening to Russia and thus destabilizing. Limiting missile defenses to preserve U.S. vulnerability to Russian strategic nuclear strikes (as defined by the Russians) will result in less effective defenses against any and all countries, including Iran and North Korea. That is the problem. How does that problem arise? Because of the language in the preamble. This is the language followed by two signing statements from Russia and the United States that define the intentions of the two countries with respect to this issue of missile defense. Here is what the preamble states: The current strategic defensive arms do not undermine the viability and effectiveness of the strategic arms of the parties. That is what it says, in part. Quote: Current strategic defensive arms do not undermine the viability and effectiveness of the strategic arms of the parties. ``Current,'' that is new language. That was not in the START I treaty. So what they are doing is defining the current systems. Why is that important? Because later they talk about any additions that would qualitatively or quantitatively improve our system would allow the Russians to withdraw. Here is what--well, let me just make one point before I quote that. The administration says the preamble is not important because you can always walk away from a treaty, and even though the Russians say this preamble language gives them the right to walk away from the treaty, they can do it anyway, so what is the big deal? Well, you can't just do it on a whim. We agree that if there is a matter that is so important to either country that it constitutes an exceptional circumstance referred to in article XIV which is the withdraw clause, then a party could withdraw. So, yes, it is true, that either party can define anything as an exceptional circumstance and therefore withdraw, but that is bad faith and it clearly is something that would be very difficult for a country to do, unless a country had built into the treaty the very excuse that they are talking about as grounds for leaving the treaty. What would that extraordinary event be? Well, it would be the improvement of U.S. missile defense systems. Here is what Foreign Minister Lavrov said on March 28: [T]he treaty and all obligations it contains are valid only within the context of the levels which are now present in the sphere of strategic defensive systems. That is their position. That is their legal position. That is what they mean by ``current'' in the preamble. The reason that legal opinion is important is because the United States does intend--if you believe Secretary Gates and I certainly do--does intend to develop missile defense capabilities that could qualitatively advance our protection against a missile coming from Russia. It is not necessarily designed for that purpose. It may be designed to thwart an ICBM from Iran or from North Korea, but it has that capability and the Russians can easily define it as such. Here is the Russian legal opinion: The treaty between the Russian Federation and the United States of America on the reduction and limitation of strategic offensive arms signed in Prague on April 8, 2010, can operate and be viable only if the United States of America refrains from developing its missile defense capabilities, quantitatively or qualitatively. Well, we will develop our missile defense capabilities quantitatively and certainly qualitatively. That is what the phased adaptive approach Secretary Gates has announced is all about: a qualitative improvement of our missile defense capabilities. So how would the Russians treat that? Their statement, their signing statement, signed at the time that the treaty was signed, says the exceptional circumstances referred to in article XIV, the withdrawal clause of the treaty, include increasing the capabilities of the U.S. missile defense system in such a way that threatens the potential of the strategic nuclear forces of the Russian Federation. That is why this preamble is so important. They treat it as the legal basis for their withdrawal if we improve our missile defenses qualitatively, which we most certainly will, and potentially quantitatively. They have already built this into the record. From my point of view and a lot of my colleagues, this can only be read as an attempt to exert political pressure on the United States to forestall continued development and deployment of our missile defenses, and there is evidence it has already worked. First of all, we have pulled back from the deployment of the ground-based interceptor system that the Bush administration had developed and was prepared to deploy in Poland with the radars associated in Czechoslovakia, and we have also said now that with respect to our NATO deployment of the so-called phased adaptive approach, the first three phases will be deployed, but the fourth phase, the one that is most effective against an ICBM coming from long range, which could include a country such as Russia, is available--not deployed but available--by 2020. Instead of having a firm rebuttal in response to what the Russians said in the preamble and in their signing statement accompanying the signing of the treaty, what was our response? It was not a firm rebuttal. We didn't say: No, that is not correct. That is not our understanding. That is not what we did, even though we had done that, by the way, with the START treaty. We pushed back very firmly on the Russians' signing statement. But instead, the State Department response to the Russian unilateral statement is as follows: The United States of America takes note of the statement on missile defense by the Russian Federation. Defense. The United States missile defense systems are not intended to affect the strategic balance with Russia. The United States missile defense systems would be employed to defend the United States against limited missile launches, and to defend its deployed forces, allies and partners against regional threats. The United States intends to continue improving and deploying its missile defense systems in order to defend itself against limited attack and as part of our collaborative approach to strengthening stability in key regions. In other words, don't worry, Russia. We are not going to develop missile defenses that could thwart your strategic offensive capabilities. We are only developing missile defenses that would be effective against regional threats, against limited missile launches, against limited attack. So it appears to me that while the Russians have built into this treaty and into the preamble the perfect argument for withdrawal and they have directly said it constitutes exceptional circumstances under their interpretation of article XIV, the United States has not responded with a negative but rather with a statement that says: Don't worry. Might I inquire, is the original 30 minutes which this side was allotted consumed?

Mr. KYL. Let me do this, since I do see Senator Casey on the floor, and Senator Kerry may have something more to say. Let me try to sum up what I am saying about missile defense, although there is much more to talk about, and this will very definitely be the subject of maybe even the first amendment that is offered on our side because there has been such a cavalier attitude about this on the other side: We don't need any amendments. We don't need any missile defenses. This is serious business. You would never enter into a contract to buy a car or a house, for example, with a degree of uncertainty or disagreement between the parties as to what the terms mean. Think about this treaty. This is a very serious proposition that starts with a fundamental disagreement between the parties and clearly could create enormous complications in our relationships in the future. If I could just finish this point. Instead of creating a more stable relationship, a relationship built on the reset, a relationship which is built on very clear, transparent views of things on how we are moving forward together, built into this treaty is an inherent conflict that can cause nothing but trouble in the future unless the United States says: Fine. We will not develop any missile defenses that could conceivably be effective against Russia, which then means that they couldn't be effective against an ICBM from Iran or an ICBM from Korea. This is the dilemma presented by this treaty and its preamble terms. This is what causes us such great concern. I am happy at this point to yield to my colleague, and if he would like to engage in a colloquy, that would be fine.

Mr. KYL. I have a brief response. There are concerns by a lot of colleagues on my side of the aisle, so it is not just a matter of satisfying John Kyl. Let's understand that. I would be happy to take yes for an answer--if that were the answer. My colleague confuses two things. First, the preamble has been agreed to by both parties. This is not just a Russian statement of intent. The preamble is part of the treaty that we have agreed to. For the first time, it connects missile defense with strategic offensive limitations by saying the current strategic defensive arms do not undermine the viability and effectiveness of the strategic arms of the parties. Secondly, my colleague says it is a technical argument that the treaty otherwise constrains missile defenses. It is more than a technical argument. It specifically does--and there was no place in this treaty for any limitation on missile defenses or how important or unimportant they are. Why would the Russians insist on putting that in there except to establish the beachhead? The point is that, yes, a strategic arms control treaty will deal with missile defense. It does, and the preamble does too by linking the two. Why is this important? There is not a technical statement in the treaty that says the United States will limit its missile defenses. That is true. But because the Russians interpret the extraordinary events--the technical term under article IV that would permit a country to withdraw--as specifically including the U.S. development of missile defenses that are qualitatively better than we have now, better than current policy, because that is their interpretation, whether or not we agree with that interpretation, we have created a dichotomy between the two parties to a very important contract. They interpret it one way and we interpret it another. What will the inevitable result be? Disagreement between our countries about a fundamental point, one which, according to the Russians, will require them to engage in a new round of the arms race that will begin, according to President Medvedev. They are saying: If you don't agree with this, under the circumstances we are going to engage in another round of strategic offense weapon building. What we on our side are concerned about is that President Obama, who has already backed off the deployment of the GBI system, which was the most robust American missile defense system, and has qualified, it appears, the deployment of the fourth phase of the phased adaptive approach, and who other people in the administration speak in terms of that--I am talking about the State Department and our signing statement--they suggest we would only develop a missile defense against a limited or regional threat. Those are reasons to believe this position of Russia is already working to cause the United States to back away from what would have otherwise been a much more robust development of missile defenses to protect the people of the United States. So that is the argument we are making. We can say that, technically, anybody can withdraw from the treaty all they want to and the preamble doesn't mean anything or so on. Well, it appears to have already had a significant meaning within this administration is the point we are trying to make.

Mr. KYL

Mr. KYL. I thank my colleagues for bringing this issue to the attention of the Senate. Senator Vitter brought this matter to my attention as the bill was being wrapped up, as a matter of fact, and I told him at that time that while we could not provide an extension longer than the one in the tax bill, I would work with him early in 2011 to help these projects obtain the necessary extension. I say the very same thing to the senior Senator from Louisiana today. I also share the confidence of the chairman of the Finance Committee that we will find an appropriate tax bill early in 2011 to include this change, which I agree we all view as a technical change, that will allow this special financing to be used as Congress intended it.

Mr. KYL. Mr. President, I would say to the Senator from Louisiana that I don't know technically whether it is 77 or 42 or whatever, but we have all discussed the fact that it is limited to those projects that are started but couldn't be completed within the 1-year extension and, therefore, would require the second extension, and it is limited to this area, yes.

Mr. KYL. I would say to my colleague that I asked the chairman of the Finance Committee: How quickly do you think we could do this? He gave me the same answer he just gave you: Yes, as soon as we can, but it is hard to make a commitment about a tax bill coming to the floor. As I also told the senior Senator from Louisiana, there are some other reasons we have to act quite quickly next year in dealing with some technical fixes to other aspects of the tax bill. So there are other reasons to act quickly as well as this particular situation.

Mr. KYL. I object.

Mr. KYL. I object.

Mr. KYL

Mr. KYL. The following Senator is necessarily absent: the Senator from Wyoming (Mr. Enzi).

Mr. KYL

Mr. KYL. Mr. President, reserving the right to object, I am not sure I will be speaking for 40 minutes or any particular timeframe here. I want to focus for the moment on the omnibus and a continuing resolution, so my remarks probably would be relevant to that, and therefore I probably should not join in the unanimous consent request at this time.

Mr. KYL

Mr. KYL. Madam President, might I just add a word to what the Republican leader has just said. As the Republican whip, it is my job to visit with Senators about their views on issues and votes that are coming up. I didn't always like the answer George Voinovich gave me, but I always knew that, as the leader said, it was a principled response to a question that reflected his well-thought-out and deeply felt views about the role of the government, issues on finance and debt, and generally from his long experience as having been a public leader at the State level, as well as the Federal level. So I join my colleague in paying tribute to an incredible public service career and especially the time I have enjoyed working with Senator Voinovich in the Senate.

Mr. KYL. Madam President, I think I can do it in 12 minutes.

Mr. KYL. Madam President, I want to speak for a few minutes about the tax legislation the Senate is debating and will be voting on before long. There has been some dismay on both sides of the aisle regarding the merits of the package. I emphasize a point also made by others: Nobody thinks this is a perfect bill. Most conservatives are upset about the unfunded extension of unemployment benefits and the fact that the tax rate extensions are not permanent. On the left, there are those who dislike the death tax reform and would have preferred that the top marginal income tax rates be increased. There are other concerns as well. I agree with some of the criticisms my conservative friends have made. This is not the bill I would have written. There are some provisions in the package I disagree with or would have written differently. On the other hand, this is not the bill President Obama would have written. He has made it clear that he doesn't like everything in it either. The package represents a true bipartisan compromise. That is something we talk about a lot but seldom seem able to do. But political circumstances will not allow either party to dictate its perfect bill. So while neither party got everything it wanted, there are provisions in the package to appeal to both sides of the aisle, and most of us agree it would be very bad for Americans to allow taxes to be increased. The most important things this bill does, in my view, are to freeze all existing income, capital gains, and dividend tax rates and reform the death tax. Without legislation, taxes are set to go up for every taxpayer in just 17 days. So by maintaining current tax rates and instituting death tax reform, the bill will provide positive economic certainty to families and to job creators. This is a very important development for American taxpayers and for our economy. In fact, according to new data from Morgan Stanley, this bill could boost economic growth to 4 percent or more next year. That is a lot better than the anemic 2 percent achieved in the third quarter of this year. Ironically, some commentators have argued that this economic growth will benefit President Obama's reelection prospects and, therefore, should be opposed. That is not clear thinking. Some other conservatives say that if we wait until next year to pass tax legislation, the GOP-controlled House could pass a better bill than this one. That is true, from my perspective, but there is no guarantee that the Senate or the White House would go along with such a bill or that we could get any better compromise in the end. In the meantime, every taxpayer would have been hit with a tax increase in the first paycheck of the new year and for many weeks thereafter. Tax increases would almost certainly hurt the economy. Look back to 1936, for example, when President Roosevelt raised taxes on high earners. The shaky economy plunged back into depression and unemployment skyrocketed. Freezing the tax rates, on the other hand, has the potential to help the economy and job growth. Some on the liberal left seem to think that tax provisions in this bill should implement their particular philosophy of class warfare. But the Tax Code is not a vehicle for punishing certain taxpayers, as some on the left seem to think. I would hope we all agree that we want to help the job creators as well as job seekers. Ideology should not trump those concerns on either the right or left. The key thing is that tax rates matter to growth. Businesses must be allowed to retain earnings so they can expand, invest, and hire new workers. As I have come to the floor to point out again and again, many successful small businesses that create jobs pay taxes at the individual rate and would be hurt by increases in the top marginal income tax brackets. According to IRS data cited by economists Kevin Hassett and Allen Viard: Fully 48 percent of the net income of sole proprietorships, partnerships, and S corporations reported on tax returns went to households with incomes above $200,000 in 2007. That is the last year, incidentally, for which we have these figures. Other businesses would have been hurt by skyrocketing capital gains and dividend taxes. Raising capital gains and dividend tax rates would greatly discourage the investment our economy so urgently needs. Indeed, capital taxes are among the most distortive and least efficient taxes the government collects. In my view, any comprehensive tax reform package should include significant reductions in capital taxation. For now, I am glad that Members of both parties have decided to at least block a capital gains tax increase, which would have a severe impact on job-creating investment. Death tax reform is another measure in this bill that will provide certainty to job creators. I thank Senator Lincoln for her leadership on this issue. We have spent a lot of time together over the last few years working on this issue, and she deserves much credit for her expertise and devotion toward crafting this plan, which will provide relief to job-creating small businesses. The result is a true compromise. There will be a large increase from this year's zero percent estate tax rate--which is what I favor--to a 35-percent rate; but that is much less than the 55-percent rate that will be in place on January 1. And the exemption is $5 million, which is preferable to the $1 million exemption after January 1. Should death tax reform not occur and the rate rise to 55 percent, small businesses could be forced to reduce their payrolls by more than 500,000 workers over the next 10 years, according to a former CBO Director, Douglas Holtz-Eakin. Think of that. That is a half million people whose jobs could be threatened. The effect of the compromise will be to eliminate the death tax liability for about 90 percent of estates that would otherwise owe exorbitant sums. According to the institute for Research on Economics and Taxation, the death tax proposal in this bill would add more than $200 billion in annual economic growth relative to current law. So this is not about ``giveaways to the wealthy,'' as some have asserted. Most of the people helped by this measure are small business employers. A final word about the deficit: It is true that extending unemployment compensation without cutting other government spending will add to the deficit--and there are some tax incentives in the bill that are similar to spending, and should also be offset with spending cuts. It is important to note that we should not raise taxes to provide the revenue--that would just grow the size of the Federal Government-- and Democrats are unwilling to find spending cuts, so we are left accumulating more debt instead. The political reality is that the unemployment benefits would certainly pass both Chambers, and there are not and will not be the votes in the Senate to cut spending to offset the costs either this year or next. I admit that I am surprised to hear some conservative commentators lump the extension of current tax rates and death tax reform into the same argument about the deficit. Congress has never offset theoretical revenue loss from the annual AMT relief, for example, because we all know there was never any intent to collect it. Likewise, Republicans have always viewed the tax extender package and extension of other rates as exactly that--extensions of existing law, not new tax cuts. The left--and some commentators--delight in misrepresenting the legislation as providing ``tax cuts for the rich.'' But these are not tax cuts--only extensions of decade-old existing tax rates--for everyone. The only new tax cuts are the expensing for businesses sought by the President, with which Republicans generally agree, and the payroll tax holiday. The actual revenue loss, therefore, is about $237 billion, not the $900 billion that some assert. While any increase in the deficit is unwelcome, the overall merits of this bill--including preventing a massive tax increase on each and every taxpayer--outweigh that deficit increase, in my opinion. In conclusion, Americans are looking for economic growth and solutions to unemployment. Keeping tax rates where they are and providing some certainty is a good place to start. I urge my colleagues to support this bill and see to it that job-killing tax rates are not imposed on anyone.

Mr. KYL

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

Mr. KYL

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

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from Kansas (Mr. Brownback) and the Senator from Texas (Mr. Cornyn). Further, if present and voting, the Senator from Texas (Mr. Cornyn) would have voted ``nay.''

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from Kentucky (Mr. Bunning), the Senator from Tennessee (Mr. Alexander), the Senator from Texas (Mr. Cornyn), the Senator from Arizona (Mr. Kyl), the Senator from Kansas (Mr. Brownback), the Senator from Texas (Mrs. Hutchison), the Senator from Oklahoma (Mr. Inhofe), the Senator from North Carolina (Mr. Burr), the Senator from Idaho (Mr. Crapo), the Senator from South Carolina (Mr. Graham), the Senator from New Hampshire (Mr. Gregg), the Senator from Florida (Mr. LeMieux), and the Senator from Louisiana (Mr. Vitter). Further, if present and voting, the Senator from Kentucky (Mr. Bunning) would have voted ``yea,'' the Senator from Tennessee (Mr. Alexander) would have voted ``yea,'' and the Senator from Texas (Mr. Cornyn) would have voted ``yea.''

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from Kansas (Mr. Brownback) and the Senator from New Hampshire (Mr. Gregg).

Mr. KYL

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

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

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