Jeff Merkley

Mr. MERKLEY

Mr. MERKLEY. Mr. President, I ask unanimous consent that floor privileges be extended for the balance of the day to my intern, India Wade.

Mr. MERKLEY

Mr. MERKLEY. Mr. President, I have a modification at the desk.

Mr. MERKLEY. Mr. President, when our American government spends money on infrastructure, core infrastructure, we should look first to American companies and American workers. But this doesn't always happen. In fact, recently, there was a bid proposal in Alaska to build a bridge with America's taxpayer money and a Chinese company employing Chinese steel outbid the American company using American steel. This was a big surprise in that normally there is a framework that helps ensure American companies and American workers are able to do the infrastructure projects we are funding with our taxpayer dollars so we are creating jobs here at home. It turns out there is a loophole; whereas, this basic framework covers highways, it covers commuting rail, it covers passenger rail but doesn't apply to freight rail. This was a freight bridge on tracks that do not also have passenger trains on them. I don't know how many tracks in America only have freight and not passenger, but when everything got sorted out through the appeal process, that is what it came down to. This afternoon, we will have a simple amendment that makes this piece of the infrastructure more consistent with the rest of the infrastructure world. The industrial might of this Nation was built on American railroads made from American steel. We often say: Wow, there is a loophole you can drive a freight train through. In this case, you actually can drive a freight train through the loophole. That is what we need to fix. At a time when Americans everywhere are searching for jobs, we should be supporting American companies that employ and hire Americans, use American steel when American taxpayer dollars are employed. In the framework for infrastructure, there are some exceptions. Those exceptions in this amendment are exactly the same exceptions that are provided in the rest of the infrastructure picture; that is, the Secretary of Transportation can waive this requirement for U.S.- produced steel, iron, and manufactured products if the application is inconsistent with the public interest. That is a pretty broad ground on which the Secretary can make a determination; more specifically, if the materials and products are not available in sufficient quantity or quality from the American manufacturer or if the inclusion of the domestic material would increase the cost of the project by my more than 25 percent. This is a small change that fills in or eliminates a loophole you can drive a freight train through. The bottom line is this: If we don't build things in America, we will not have a middle class in America. Our taxpayer dollars should go to create good, living-wage jobs for our workers here at home in these core infrastructure projects, not to create jobs in China. I urge my colleagues to support this amendment. I note the absence of a quorum.

Mr. MERKLEY

Mr. MERKLEY. I ask unanimous consent further reading of the amendment be dispensed with.

Mr. MERKLEY. Madam President, as provided under the previous unanimous consent order, I ask the pending amendment be set aside so I may call up my amendment No. 879.

Mr. MERKLEY. Madam President, I rise to offer this amendment for the consideration of this body because it is important to boosting American jobs and manufacturing and ensuring that more of our American dollars are spent here at home. When the Federal Government spends tax dollars, it should be looking to American companies to provide goods and services. Recently, an issue came to light that gave me substantial concern. A few months ago, a bid was awarded to a Chinese company to provide steel for a freight rail bridge in Alaska, the Tanana Bridge. There was strong American competition. However, the award went to the Chinese company. If there were a level playing field, that would be one thing. But, in fact, China is employing a three-tiered strategy that provides enormous subsidies to its own manufacturing, tilting the playing field considerably. The first part of that strategy is to peg its currency so its products have a 25- to 40-percent subsidy--equivalent to that subsidy--because of the pegging of the currency. The second piece is it provides all kinds of subsidies that are not actually permitted under WTO, but China is doing it anyway. These go directly to the heart of manufacturing competition. Recently, a bipartisan amendment was put forward. I applaud my colleagues from Wyoming, Senator Enzi and Senator Barrasso. We said China is required under the WTO to post its subsidies, to notify the parties of its subsidies. It has done so only once since 2006. It is in violation. Also, under the WTO, the American Trade Representative is authorized to counternotify if China fails to do so--and we had not done so. So we called upon our Trade Representative to counternotify. Very interestingly, the next week we get this list of 200 subsidies that China is utilizing outside the framework of WTO to subsidize its manufacturers and compete unfairly against the United States. The third part of the strategy is that China is using its central bank as the only authorized bank to control the interest rate on deposits and thereby also being able to control the interest rates on loans in a fashion that provides enormous subsidies to our competitors in China. Until recently, America had stood on the sidelines and not confronted any of these three Chinese strategies other than to say in some cases that are relevant to our national defense and our national transportation system there needs to be a provision to buy products inside America. But this particular project fell between the cracks. Although the funds came from the Defense Department, it was not a straight Defense Department program, and although it was a rail program, it was not a passenger rail program. This amendment closes this loophole. At a time when Americans everywhere are searching for jobs, we should be supporting American companies that employ and hire Americans, especially to make sure American companies are not disadvantaged by this three-tier Chinese strategy that tilts the playing field against our companies and thereby destroys jobs in America. Under this amendment, freight rail transportation contracts exceeding $100,000, funded in the appropriations bill, would use steel, iron, and manufactured products produced in America. There is flexibility provided to the Secretary of Transportation to waive this requirement under one of three scenarios--if the application is inconsistent with the public interest, if the materials and products are not available in sufficient quantity or quality or that the inclusion of domestic material would increase the price by more than 25 percent. I am not sure 25 percent is high enough, given that just pegging its currency creates a 25-to 40-percent subsidy for Chinese products, so this may not go far enough. This may only go a small portion of the way to leveling the playing field. I lay it down as a marker that we should create fairness so American manufacturers can compete. This amendment may not go as far as it should, but it is certainly a stride in the right direction. For that reason, I urge my colleagues to support it. If we do not make things in America, we will not have a middle class in America.

Mr. MERKLEY

Mr. MERKLEY. Mr. President, my colleague from Oklahoma was addressing the frustration that exists on the part of the American public with this Chamber for not doing its job. I must say, on that point, we are in complete agreement. I hear in every townhall, in every conversation with constituents, the question of why is it that when what we need most in this Nation are jobs, this Chamber, the Senate, is unable to hold a debate over a jobs bill? Just last week we had a debate not over a jobs bill but whether to proceed to the jobs bill. Unfortunately, it was defeated, not because the majority did not want to get to the bill but because the minority opposed it and invoked a 60-vote hurdle, a hurdle that was never routinely used in this Chamber in the past. The fear of debating a jobs bill in this Chamber by my colleagues is irrational. The American people want us to wrestle with creating jobs. Have people not gone out and talked to their constituents? Do they not know the unemployment rate in this Nation? Do they not hear from fathers and mothers who are worried about keeping shelter over their family or worried about their mortgage, their rent, their utilities? I do not understand how anyone could say: Let's not have a debate about jobs on the floor of the Senate. Yet it was a unanimous ``no'' vote from across the aisle when we proposed having the debate over the jobs bill. I think it is so important that all of us in this Chamber who actually receive a paycheck understand the challenge and the plight of American citizens who either are working part time in multiple jobs trying to make ends meet or who have lost their job and are completely unemployed. Over the past 10 years, we have lost 5 million manufacturing jobs in this country. Over the last 10 years, we have lost 50,000 factories in this country. Working families are in a tremendous crunch. I thought I would simply share some stories from back home because there does not seem to be many people listening to folks back home and their concern that this Chamber debate and produce a jobs bill and get it to the President. Jerry from Linn County says: I was laid off in April, 2009. It took me 2 years and 2 months to find a contracting job. I appreciate having a job, however I have no benefits, no holiday pay, no vacation pay, no medical or dental coverage. My wife recently suffered a badly broken leg. We have no insurance. Her injury required surgery and a hospital stay. Now we are in danger of losing the house that I bought in 1993. I am told that my contract has been renewed for another year. That will bring us to May of 2012. Then I have to leave for three months before I can return. I am given no promise of being able to return to work there. That is Jerry's story that he sent in to share. Virginia from Hillsboro writes: In February 2010, my department at my company was advised we would be laid off after transitioning our job duties to a replacement staff in India. It felt like quite a blow. Prior to the layoff, the company had not given us raises for 3-4 years, even though they were reporting profits. Half of our department was laid off within a few months. I filed a TAA petition to attempt to attain additional funds or schooling for the people at our department, but it was denied. The year before I was laid off, my daughter, who lives with us with her son, changed jobs and then was laid off from the new job. Four months after my layoff, my husband was advised the rest of his department is being laid off after their job duties were transitioned to an off-shore site; hopefully, he will have work until March. My daughter, myself, and my husband are all looking for work. We moved my mother up with us three years ago, so now we have four generations living in our home. I have no idea what will happen if none of us can find work. My husband served his time in the Army and he and I have always worked full- time, steady jobs. It feels like we're being punished for spending our lives working to take care of our family and to keep a roof over our heads. I read in the papers this morning that things are improving in Oregon, but, honestly, I don't see it. Americans are hurting. Americans need jobs! We want to work and need to work! We are not lazy--we are innovators and always have been! We need to regain our pride in our country, help each other and quit focusing on greed. That was Virginia from Hillsboro. And if you didn't catch the beginning, her letter started by saying that she and her team were laid off after training replacements in India to take over their jobs. This terrible economy is resulting in multiple generations of her family without work. Julio from southwest Portland says: I am 31 years old with my first baby on the way and I can honestly tell you I am nowhere where I thought I would be at this point in my life. Upon graduating high school, I joined the Navy. I did a 6-year enlistment. My mother was a housekeeper and my father was an ordained minister and they were unable to help me with the expenses of higher education, so I took full advantage of the GI bill once I was honorably discharged in 2004. I completed my degree in three years and nine months and graduated with a bachelor's in business management and a minor in economics. I strongly felt that as a 6-year veteran of the Navy, with a degree in business, and being bilingual, that I would have no problem finding employment. Unfortunately, I had the misfortune of graduating just as the financial world collapsed in 2008. Three years later, I work two jobs and still make less than $30,000 a year. I have interviewed for several great jobs, but due to the same amount of people applying for the same position I have lost out to individuals with a great amount of experience. I know I can do well, but in our current environment I feel as though I don't even have a chance. Anything you can do to create better paying jobs in Oregon would be greatly appreciated. That was Julio from southwest Portland. These stories that are coming from our single parents, coming from our husbands, our wives, are coming from folks who are taking care of their parents. They are coming from folks who are trying to take care of their children, and you can feel the sense of frustration. You can feel the sense of panic in this economy. Last week this Chamber debated whether to have a debate about creating jobs. My colleagues across the aisle said, no, we will not let the jobs bill come to the floor. I must say I am extraordinarily frustrated that at this time in this economy, with so many Americans hurting, my colleagues are unable to summon the connection to the challenge of the American family so that we can have a full debate on this floor on a jobs bill. These families that are writing, as you can tell from the letters, served their country. Several of them were in the service. They played by the rules. They worked hard. But they have been let down again and again by a political system that has protected tax breaks for the wealthy over creating jobs and opportunities for working families. I hope we will have another chance to decide whether to debate a jobs bill, and I hope every Member of this Chamber will say yes to taking and shutting down tax breaks, $20 billion a year for oil companies that are stashing that money in the bank and not creating a single job with it, and instead take that $20 billion and put it to work on energy retrofits, which is, according to every economist, the best bang for the buck we could possibly have in creating jobs. You cannot outsource a single bit of the labor, and virtually all of the products are made right here in our economy, from the pink cotton candy insulation to the double-paned windows to the caulk. That is just one example of the kind of conversation we should be having. We should be having a conversation about whether we should be helping our school districts hire teachers. Some will agree, some will not, but let's have the debate. If someone wants to propose an amendment and say we don't want to help our school districts, we can do something better to create jobs, let's have that debate. Let's not sit on our hands when American families are suffering. Let's get to work and create jobs that the families across America need. I yield the floor.

Mr. MERKLEY

Mr. MERKLEY. Madam President, I rise today to speak about the issue of creating jobs in America--more specifically, the loss of jobs that has been driven by the unfair trade practices of China. The bottom line is this: Chinese manipulation of currency is a tariff on American products and a subsidy to Chinese exports, greatly disadvantaging manufacturing in America and destroying thousands of American jobs. When we look at our challenge, it is not to simply strengthen the overall economy, often measured by the gross domestic product. Our challenge is to strengthen the American family, the financial foundations that depend upon a good living-wage job. So every proposal we consider should be weighed by whether it creates jobs or destroys jobs. That is true in times of a robust economy. It is particularly true now when we have a persistent high unemployment rate, when families have been battered not just by the loss of jobs but by the loss of equity in their homes, by the loss of their health care that went with their jobs, by the loss of their retirement savings--all of these at a time when the price of things fundamental to families keeps going up. There are many who looked to the opening of China as an opportunity to have a vast market for American products. Indeed, many continue today to talk about China in terms of the market opportunities for American products. But the picture has changed dramatically over the last decade, and we, as policymakers here in the Senate, must recognize that change: that China has become a vast manufacturing enterprise, that it has done so through a deliberate manufacturing and export strategy, and that strategy is destroying jobs in the United States of America. Over the last 10 years, China has reaped benefits, but it has not upheld its end of the bargain. Indeed, one piece of the deal is that they would create a rule of law that they would enforce restrictions on the theft of intellectual property. But I can tell you that when we took a bipartisan delegation to China earlier this year, led by the majority leader, company after company told us the stories of their products being stolen by Chinese enterprises, and not just the design of their products that were then replicated and sold without the appropriate patents but also the software. If you want a simple example of this, take Microsoft Windows and its products and its Office suite. Only about half of the copies used by the official government in China are legal copies, and outside of the government, only a very small fraction of the copies are legal copies. That is just the beginning of the vast intellectual theft where China has not upheld its end of the bargain to create a rule of law and stop the outright thievery of American intellectual property, damaging American companies. Second, we have the Chinese-pegged currency. Now, when a country pegs its currency to another, as they have their currency to the dollar, they can do so and adjust it periodically according to market influences; they can decide to end the pegging and let it float, which then you get a real market valuation or they can deliberately keep printing money to sustain a situation in which the currency is undervalued. And that is exactly what China has done. When they make their currency cheap, what they do is make their products much less expensive to other nations. That is equivalent to subsidizing their exports. When they make their currency cheap and make dollars very expensive, it is equivalent to putting a tax on American products, a tariff on American products. While much of America has thought of the World Trade Organization as one that created a platform for free trade or even a level playing field, that is far from the truth. The truth is that China has been allowed to sustain a pegged currency that puts the equivalent of a 25- percent tariff disadvantage to American products and a 25-percent subsidy to Chinese products. There are those in this Chamber who have come to this floor and said that to challenge the Chinese tariff on American products is to launch a trade war. My friends, do you not realize that the Chinese tariff on America is a trade war and that they are winning this war and they are destroying American jobs while vastly increasing their own production? If not, please go to China and talk to American companies and talk to the American companies that have been shut down in America. We have lost 3 million manufacturing jobs since 1998, a little bit over a decade. Not all of that is the consequence of Chinese practices, but a great amount of it is. We must not stand by trying to pretend that the world is one way and that China represents solely a market and not a manufacturing competitor when the truth is they are a fierce competitor using industrial policy and a pegged currency to outcompete American products, to penalize American products. In terms of the currency manipulation, our Secretary of the Treasury said this: Whatever your definition of manipulation is, what matters is the currency is undervalued. They are intervening-- Referring to China-- to hold it down. That adversely affects our economic interests, and there is an overwhelmingly compelling economic case for the world, for China's trading partners, for China, for us, to try to alter that basic practice. Well, certainly we have the Secretary of the Treasury echoing that we have a challenge that is hurting America and that we need to respond to that challenge. That is why we have this bill on the floor addressing the Chinese manipulation of currency. This is not the only strategy China uses. They also, through their use of rules, use a strategy of holding down interest rates below the inflation rate. This means any Chinese citizen who puts their money in a state-controlled bank--and that is the only option they have--loses value every year on that money. This is sometimes given the fancy name of ``financial repression'' by economists--where they repress or hold down the interest rates. But let's call it something a little more understandable: insurance rate manipulation. That is done in order to allow the central bank--the Chinese banking system--to reap great revenues, which they can then take to subsidize their manufacturing. They do this through a series of grants and through a series of subsidized loans. An American entrepreneur was in my office the morning before yesterday talking about how an individual he knows went to China and started out negotiations with China, where they offered him a 3-percent interest rate on money to operate his enterprise. They ended up offering a negative 3-percent interest rate. In other words, they would pay him to take the money in order to bring that manufacturing to China. In other words, take his plant out of the United States and bring it to China. They would pay him to do that. That is a vast subsidy. That is not the only subsidy. The grants, the subsidization of water costs, and the subsidization of electricity--all these subsidies--have a big impact. If we go to the WTO Web site, we will see how it summarizes the structure of the WTO. Under the section called ``Subsidies,'' they note: [Subsidies] are prohibited because they are specifically designed to distort international trades, and are they're therefore likely to hurt other countries' trade. So the plan was, when subsidies were used deliberately to distort international trade, they would be outlawed. Guess what. China is ignoring this. China is flaunting this. They are required to disclose each and every year all the subsidies they provide to their manufacturing, and they do not do it. They did it once in 2006, a very minimal disclosure. Why is it we continue to believe we have a structure that facilitates mutually beneficial trade in the WTO when China, through currency manipulation and direct subsidies to exports, is breaking every key aspect of the WTO framework with hardly a protest from the United States? We have on the floor a bill which says we will no longer turn our head from the deliberate distortion of the international trading regime that was supposed to benefit both nations but, in fact, has become a powerful international tool for stealing jobs from the United States of America and undermining the success of the American worker. Let's take a look at paper. Just a few months ago, Blue Heron, a company that has operated for nearly a century in Oregon, shut down. It is a paper company. They shut down for one simple reason: because the Chinese currency manipulation and the Chinese direct subsidies to those who manufacture paper for export in China completely undermined the market for manufacturers in the United States. So the lives of these American workers are destroyed. The workers owned Blue Heron. When they got notice they were going to have to shut down because of these Chinese subsidies and Chinese currency manipulations, they basically were completely out on the street--no health care after the Friday they shut down, no severance payment. Indeed, they are having to start from scratch--workers who are 40, 50 years old starting from scratch--in an economy where there are no jobs to be found. But they are not alone. Paper companies across the United States have been shutting down for exactly the same reasons. Let's take the case of wind turbines. Wind turbines imported into China are subject to a 10-percent tariff, while wind turbines imported into the United States are subject to only a 2\1/2\-percent tariff. Why do we--on top of everything else I have noted--add to the injury by putting a lower tariff on their imports than they put on ours? Can someone in this Chamber explain to me why shutting down manufacturing in the United States and opening manufacturing in China and piling on lower tariffs on a country that is already subsidizing its exports and already putting a tariff on ours makes any sense? I certainly would be very interested in that explanation. I think the workers in an industry that would otherwise be manufacturing these wind turbines in the United States would be very interested in the explanation. China doesn't give our wind turbines a fair chance to be used in their energy products. Let me read this quote from 2009 regarding the award of contracts on Chinese projects. . . . all multinational firms bidding on National Development and Reform Commission projects [were] quickly disqualified on technical grounds within 3 days of applying. In other words, a nontariff barrier in China was added, on top of everything else, to make sure that only Chinese manufacturers would have a chance to get the contracts. Let's turn to solar--solar voltaic panels. The whole technology was invented in the United States, but we can see that over the last 3 years the tremendous subsidies to solar in China are destroying the American industry. One of the few remaining manufacturers is SolarWorld. It is located in my State--the State of Oregon. In the span of less than 10 months--from 2009 to 2010--three major manufacturers shut down, destroying hundreds of jobs--jobs that would not be restored. SolarWorld is incredibly efficient. They are working with American technology. We should be building and selling these solar panels to the world, but we aren't going to be able to do so if China--using their manipulated interest rates to produce funds for grants and subsidized loans--continues to virtually pay folks to ship their manufacturing into China and discriminates against American products. I want SolarWorld to be there not just next year but 10 years from now or 20 years from now. That will not happen if we don't address this massive assault on American manufacturing. Because China has failed to disclose its subsidies, as required under WTO, I have proposed an amendment to the bill--an amendment that will not be heard because a deal cannot be worked out to allow amendments on this bill. I am very disappointed in that. This amendment simply says, if China or any other country under the WTO fails to do the notification of subsidies that is required, our U.S. Trade Representative will do a counternotification, putting those subsidies on the table. That way we can see exactly what they are and we can be part of this debate. It is the beginning of holding China accountable for breaking the WTO rules. This is not a Democratic amendment and it is not a Republican amendment. This is an amendment about the future of the middle class in America, the future of the worker in America. I am pleased to have Senator Enzi as my chief cosponsor and additional colleagues from across the aisle--Senator Barrasso and Senator Snowe. I am pleased on this side of the aisle to have Senators Nelson, Schumer, and Levin as cosponsors. That pretty much spans the spectrum of opinion in this Chamber, where everyone agrees China should be held accountable. If they are subsidizing their manufacturing, which they are, they have to disclose it, and they are not. We can have a better debate about how to end their rule-breaking under the WTO if we have that information. In closing, I just wish to note that this debate should have happened a decade ago--it should have happened 5 years ago--because over that timespan we have continued to hemorrhage jobs, we have continued to hope China would apply the rule of law on intellectual property, we have continued to hope they would end their manipulation of their currency, we have continued to hope they would end their illegal subsidies and the undermining of American products. Those hopes have not been realized. China has not chosen to honor the framework that was established. So while we hope, American workers are losing their jobs. That is why we have to have this debate on the floor. That is why this bill before us must be passed--to give the President greater leverage and to send a message to China that we are now fully paying attention at a level we should have a decade ago. The fact we have not paid attention is water under the bridge, but we are paying attention now. If anyone cares about having an American middle class, with living wages for workers, then I ask them to fully support this bill. The trade war China has been carrying out, decimating manufacturing in our Nation, must not go without full debate and a full response. I thank the Chair, and I yield the floor.

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

Mr. MERKLEY

Mr. MERKLEY. I found it very interesting, listening to some of the debate today, that there seems to be some policymakers in the Senate who haven't come to understand that when another nation pegs its currency, rather than letting it float, it does so deliberately to put in effect what is essentially a tariff against imports. In our case, that is a tariff against American imports, and in some cases it provides a subsidy to exports. Now, here we are in America. Why would we say it is OK for China to peg its currency in a fashion that puts a tariff against American products and subsidizes Chinese exports to America? Because that is guaranteed to strip jobs out of America. Why would some Members of this Chamber consider that to be just fine? I am puzzled by that, and I am wondering if the Senator could help me understand.

Mr. MERKLEY. In Oregon, we recently had the shutdown of a company called Blue Heron. It has operated for the better part of a century, making paper. The point Blue Heron was making was that because of the pegging of the currency, the paper they tried to sell to China faced a 25-percent tariff, while China's paper enjoyed a 25-percent subsidy if it was sold in the United States, and it created an absolutely unfair international trade playing field that was going to be putting American papermakers out of business. No matter how efficient they could possibly be, China, with this subsidy, could sell into the U.S. market, undercutting American products. Well, that plant shut down. It is one of a series of paper plants that have shut down. I think the Senator has some similar situations in Ohio.

Mr. MERKLEY. I think it is important to understand as well that the pegged currency isn't the only tool China is using to create an unlevel playing field against American products. Another is that they use something economists call financial repression. That is a fancy word for artificially lowering the interest rates on savings on a level below inflation. So if you are a Chinese citizen and you are saving money and the inflation rate is 5 percent, the interest rate you are going to get is going to be less than 5 percent. It is a way, essentially, of taxing the entire nation, and then the Chinese Government takes those funds and they give massive subsidies to manufacturing in China. Those subsidies include grants, and they include below-market loans. So on top of the huge tariff on American products which basically stems from this currency manipulation, we have these huge subsidies to domestic manufacturers who export to the United States. China is supposed to disclose those subsidies under WTO, but it may come as a surprise to some in this Chamber that China doesn't do it. They only did it one year, in 2006. So they are taking the structure that was set up and they are abusing it. This adds to, on top of the currency manipulation, further driving jobs out of the United States, discriminating against U.S. products. Isn't there a time when we as policymakers need to stand for American workers, stand for the American middle class, and say we are not going to allow another nation in a major trading relationship to break the rules in order to discriminate against the very products that put American workers out of work?

Mr. MERKLEY. Madam President, I wonder if my colleague from Ohio would consider a bit of a discussion for a few minutes.

Mr. MERKLEY. I wish to thank the Senator from Ohio, Mr. Brown, for his work, along with the work my colleague from New York, Senator Schumer, has done. It is time we stand for workers across our Nation who have been systematically losing the good-paying manufacturing jobs because China has been pegging its currency and discriminating against American products to subsidize the export of their own. This must be discussed in every corner of our Nation and must be discussed here on the floor of this Chamber because it is affecting the success of American families in Oregon, in Ohio, in New York, in North Carolina, and throughout our Nation. Thank you, Madam President. I note the absence of a quorum.

Mr. MERKLEY

Mr. MERKLEY. Mr. President, I rise today to commemorate a statesman and a mentor, Senator Mark O. Hatfield. He took many roles: dedicated public servant, conscientious man of faith, and pioneer for new development in the West. He was born in 1922 in Dallas, OR, a small town not far from our capital, Salem, to a family of modest means. His father was a blacksmith and his mother was a schoolteacher. When he was young, his family then actually moved to the State capital, which gave him a chance, as a teenager, to work as a guide in the State capitol building and to imagine returning one day as a public leader. He proceeded to study at Willamette University in Salem. During his freshman year, events took a dramatic turn with the attack on Pearl Harbor in 1941. Senator Hatfield joined the Reserves and accelerated his studies, so he completed his degree in 1943 and joined the Navy. He proceeded as a naval officer and fought in Okinawa and Iwo Jima, and he saw the devastating aftermath of the atomic bomb at Hiroshima, an imprint that, along with his State, caused him to struggle with the appropriate and moral use of force throughout his life in public service. In his own words: In the war's immediate aftermath, one vivid experience made the profoundest impression on me. I was with a Navy contingent who were among the first Americans to enter Hiroshima after the atomic bomb had been dropped. Sensing, in that utter devastation, the full inhumanity and horror of modern war's violence, I began to question whether there can be any virtue in war. He elaborates on this process of questioning, this process of challenging, in his book ``Conflict and Conscience.'' In terms of the Vietnam war, he concluded that it did not meet the Christian theologians' test for a just war. After the war, Hatfield went back to Oregon and he started a law degree, but he changed course after a year. He decided instead to pursue a master's in political affairs, and he went to Stanford and completed that master's and came back to Oregon. He started teaching at Willamette University, and in short order he was running for the Oregon House, in 1950, first elected at the age of 28, and then Secretary of State 6 years later at the age of 34, and Governor 2 years later at the age of 36. Through these experiences, Senator Hatfield developed the ability to chart his own course, to determine and follow his own convictions. In 1964, he championed an initiative to outlaw the death penalty. That ballot measure passed, and Governor Hatfield then commuted the sentences of those on death row. In 1965, in July, he was the one Governor at the National Governors Association to vote against the resolution endorsing the Vietnam war. In 1995, he proceeded to oppose the balanced budget amendment, and as the Senate historian, Don Ritchie, observed, ``It was one of the most courageous votes I had ever seen. He knew he was sacrificing his chairmanship and his position as a Senator. Few knew then that Senator Hatfield had offered to resign.'' Senator Hatfield also worked hard to build core institutions in Oregon. He was a champion of Oregon Health and Sciences University and built it into a fabulous institution of research and learning. The Mark O. Hatfield School of Government carries on his legacy of leadership, conveying those principles to young leaders who are dispersing throughout the public policy arena. The Marine Science Center in Newport, a tremendous research facility, continues to yield benefits, including setting the foundation for the recent location of NOAA'S research fleet in the city of Newport. He was an intense advocate of medical research, and he championed NIH, where a building now bears his name. He was a champion for the U.S. Institute of Peace. He felt if there were academies that studied war, there should be acadamies to study peace and reconciliation. In 1975, he introduced the George Washington Peace Academy Act to further the understanding of the process and state of peace among nations, to consider the dimensions of peaceful resolutions of differences, to train students and to inform government leaders in the process of peaceful resolutions. It took 9 years, but this effort which began as the George Washington Peace Academy Act ended in the establishment of the U.S. Institute of Peace in 1984. As my senior colleague mentioned, he championed many efforts to protect Oregon's precious wilderness. One of his final projects was to protect Opal Creek, which has been described as 6,800 acres of virgin old growth, the largest span remaining in western Oregon. He said about this: It is an inspiration. It is a place of educational and spiritual renewal and exploration. To walk among the centuries old fir, hemlock, and cedar inspires tremendous awe and instills, I think, a perspective unlike itself. My own connection to Senator Hatfield began in 1976, in the spring of that year, when I went to Salem to meet with Jerry Frank, Senator Hatfield's legendary Chief of Staff, to interview for a possible summer internship in Senator Hatfield's DC office. I will be eternally grateful to Jerry Frank and Senator Hatfield for offering me that internship, for that opportunity to come to our Nation's capital to see government in action. My first responsibility was to open the mail. When you open the mail, you start to understand the dimension, the breadth of political opinion in the breadth of a State. How readily did many constituents attack Senator Hatfield's Christian faith because they disagreed with him on some policy position. I opened so much mail that said: Hi, my policy position is this and yours is different. So how can you be a man of Christian faith? Indeed, Senator Hatfield started his book ``Conflict and Conscience'' with just this dimension, a politicization of religion. He puts in it a number of letters that he received. One reads: Dear Mr. Hatfield, Your encouragement of antiwar demonstrations and the riots that have come from such demonstration are in fact treason for they give comfort and aid to our enemies. . . . I and a lot of other Christian people are extremely disappointed in your performance in the Senate, for you who claim to be a Christian and have access to our Almighty God should have a better understanding of human nature and the evil in the human heart. Senator Hatfield talked about the challenge of being a public man of faith and working to take those principles and convert them to public policy in the face of hostility coming from the left or the right. But it was his determination to stay that course, to continue to be a person of reflection and depth in the pursuit of public policy. That summer, I was assigned to the Tax Reform Act of 1976. The great joy that I had was that it happened to come up on the floor that summer. Back then, before there was television in this Chamber, before there was e-mail, you would come to the floor, if you were working on an issue, and go up to the staff gallery and follow debate, and you would rush down with the other staffers to meet your Senator coming out of the elevators just outside those double doors. Because there were lots of amendments, I got to meet with the Senator many times to describe the debate on the floor here, and to fill in what folks back home were saying about the particular issue at hand. Then, occasionally, the timing being just right, we would have a chance to walk back and forth. Senator Hatfield loved to walk back and forth outside in the sunshine under the trees between the Capitol and his office in the Russell Office Building. It was while observing those debates that I saw the Senate at its best. There was an amendment from the right side of the aisle that was debated and discussed and voted on an hour and a half later. Then there was an amendment from the left side of the aisle. The amendments were on the issue at hand, such as different tax strategies, and often they were bipartisan in nature. Indeed, you saw that our Senators at that time--most of whom had served in World War II together--could disagree without demonizing each other. This is a tremendously important facet of the Senate that has been lost over the decades since. Indeed, there were many friendly debates between Republicans and Democrats. My father, Darrell, was a mechanic, and he had one of these debates with his boss who owned the company. When I was offered the internship with Senator Hatfield, Jerry called my father and said, Darrell, I won the debate because Senator Hatfield will work to make Jeff a good Republican. My dad said, no, no, no, I won the debate because Jeff will work to make Senator Hatfield a good Democrat. Neither of us would have broached such a topic. The conversation wasn't about Democrats and Republicans. It was about the challenges at hand and how you resolve them. It was from that summer that I developed a lifelong admiration for Senator Hatfield and his model of public service. Here is what Senator Hatfield had to say about public calling: Political service must be rooted in a philosophy of society's overall well-being, with a broad vision of how the body politic serves the people through its corporate structures. The heart of one's service in the political order must be molded by ideals, principles, and values that express how we, in the words of the Constitution, are ``to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the General Welfare, and secure the Blessings of liberty to ourselves and our posterity.'' He continued: Political service must flow out of such a commitment. Convictions about war and peace, about the priorities governing the expenditure of Federal funds, about the patterns of economic wealth and distribution, about the Government's responsibility toward the oppressed and dispossessed both in our land and throughout the world, about our Nation's system of law and justice, and about the meaning of human liberty--these should be at the core of one's desire to seek public office. It was because of my admiration for Senator Hatfield that when I became Speaker of the Oregon House in 2007, I called him and asked if he would consider coming to swear me in when I took the oath of office. He readily agreed to do so. That was the last public event that my father was at before he passed away. It was one of Senator Hatfield's last major public events. I so much appreciated the symbolism of a Republican and a Democrat coming together at that moment, and sought to help guide the Oregon House, the same Chamber where Senator Hatfield started his political career to solve Oregon's problems. It is because of my admiration for Senator Hatfield that when I came to this Chamber I asked for Senator Hatfield's desk. There are 14 names carved into the desk drawer in his desk. The 13th is Senator Hatfield's. As I looked at the names, I was surprised to discover this desk had never crossed the aisle before. So I think it is symbolic of Senator Hatfield's career of public service, focused on solving problems and working together across the aisle, that his desk made that journey to where it is now. During those walks back and forth between here and the Russell Senate Office Building, Senator Hatfield paused one day to pull the leaf off a Ginkgo tree. He said: Jeff, this is one of the simplest of God's creations. Why is it that folks can't see the beauty of God's creation in the very simplest of one of his plants? I held that leaf tightly in my hand, determined to preserve it. Just as we got back to the office, he plucked it out of my hand and said: Well, of course, you don't want to continue to carry that leaf. I didn't have the courage at that moment to say: No, I would treasure that leaf all my life, and then grab it back from him. So I don't have the leaf, but I take that memory of his deep personal faith and conviction. I was sharing this story with another intern who served with Senator Hatfield in 1985, and he said: Well, let me tell you another story about a tree and Senator Hatfield. On this walk between the Capitol and the Russell Senate Office Building there is a tree that Senator Hatfield planted. It is a Metasequoia tree. It so happens the Metasequoia used to grow throughout Oregon millions of years ago. When people found the fossils and studied them, they concluded the tree was extinct--until the 1940s when they found a stand of Metasequoias growing in China. Senator Hatfield arranged to have one of these trees planted in that walk. It so happens in 2005, when I was House Democratic leader in Oregon, we passed a bill that made the Metasequoia tree the fossil of Oregon, but we didn't know about this tree Senator Hatfield had planted. But there it is today. It is now 25 years old. It sheds its needles every winter, so people think it is a fir tree that has died. But it comes roaring back to life in the spring. Now, 25 years into its life, it is equal to the highest of the broad leaf trees on the grounds of the Capitol. In another 25 years the Hatfield tree is going to soar over these Capitol grounds. In so doing, it is going to represent the values he fought for--the courage of one's convictions, the effort to get beyond the bumper stickers and into the nitty-gritty of issues, and to come to a conscientious decision that will take our Nation forward, the determination to be oriented toward solving problems and not to a partisan divide.

Mr. MERKLEY. Certainly.

Mr. MERKLEY. Mr. President, I applaud my colleague from Tennessee. I appreciate him coming to make comments about his service with Senator Hatfield. When I was first coming to the Senate, Senator Hatfield asked me to bring greetings to his former colleagues. One of the first conversations I was able to have was to sit down with Senator Lamar Alexander who, like Senator Hatfield, served as a Governor, and who embodies so many of the qualities Senator Hatfield worked to cultivate.

Mr. MERKLEY. Mr. President, I have just one closing comment, and that is this: This is a picture of the Senator Hatfield tree. It has my staff in front of it. We went out there on July 12, Senator Hatfield's birthday, to take this picture and we hoped to give this to him. We didn't have a chance to do that before he passed away. But I think this tree will serve as a living reminder of all that he championed throughout his tremendous career. We have lost a great man, and our Senate and our Nation are poorer for it.

Mr. MERKLEY

Mr. MERKLEY. Mr. President, I ask unanimous consent that my intern, Yan Perng, have the privilege of the floor for the balance of the day.

Mr. MERKLEY

Mr. MERKLEY. Mr. President, I ask unanimous consent that Rachel Travis of my staff be granted privileges of the floor for this pending legislation.

Mr. MERKLEY

Mr. MERKLEY. Mr. President, I rise to address the Obama-Boehner debt deal. I must say it is an issue on which I have been immersed in wrestling to understand the impact on unemployment, the impact on investments that will strengthen our Nation down the road; certainly an impact on programs that strengthen our families. It is in that context we try to understand how do we build the strongest possible Nation for working families. How do we do that? Is the Obama-Boehner debt deal the right path? I must conclude that it is not the right path. I conclude that for four reasons. The first is the impact on jobs. We are facing a gathering storm on the job front. We have 5 to 8 million additional foreclosures that are suppressing the success of our construction market, driving down the value of houses and having a devastating impact on the attempts at a recovery. Second, the unemployment benefits. The extended unemployment benefits expire this year, and the rough estimate is that that will result in a reduction of around 500,000 jobs. That is a tremendous blow in 2012. Then we have the termination of a payroll tax holiday and the estimate is that may well produce losses of jobs of more than 900,000 across America. Add them and you are talking about nearly 1.5 million lost jobs that we will face in 2012. So on top of this gathering storm comes the Obama-Boehner debt deal that is estimated to produce another job loss--and by varying estimates--from 100,000 to 300,000. Doesn't this deal take us in the wrong direction? Shouldn't we be on this floor working to create jobs, not to destroy jobs? The success of our families depends on it. My second major reservation about the Obama-Boehner debt deal is its impact on working families through the concentration of cuts on the 18 percent of the budget that is the nondefense discretionary portion. This is the portion of the budget that involves Head Start and Pell grants--in other words, an opportunity for our children, our smallest children, success for university education for our college-bound students. It is the area of the budget that involves investments in clean energy. It involves our small business programs that support the success of our small businesses. It involves job training that helps families adjust to a changing dynamic in the economy, and so much more. In this 18 percent of the budget is where the cuts will hit. What with the phase I required cuts, or title 1 cuts, in combination with the cuts under title 3, you have essentially 15 percent cuts from the 2011 March CBO baseline. Understand that baseline for 2011 is a very low baseline, much lower than 2010, much lower than 2009. It takes us back many years earlier. We have a very low baseline and we are going to cut 15 percent more out of the core programs supporting the success of our working families, supporting the success of our smallest children, supporting the success of our college-bound children. This is not the path that builds a stronger America. The third factor is that while our children in Head Start and our children headed for college and our citizens seeking job training are going to take these blows, the wealthy and well-connected do not contribute one slim dime. As some of my colleagues have argued: Well, you know what, there are some of those programs embedded in the Tax Code that actually help the middle class. My colleague from Utah was just making that argument. Then the argument is extended: So don't touch any of those programs. Well, if we take that same attitude toward our spending programs, we would say some benefit the middle class, so don't touch any spending programs. Obviously, it is an absurd argument. Why is it made on the revenue side, to those programs there, but not in the programs that are on the appropriations bill? Why is the tax bill protected from not only that argument but the spending bills are not? One simple answer: The programs for the wealthy and well-connected are in the tax bill. So this false argument is used to defend the accumulation of wealth, the expansion of prosperity for the few--for the powerful few--at the expense of families across this Nation. My fourth concern about the Obama-Boehner debt deal is that simply it was forged out of a process of extortion. If you look through the editorials, you see words such as ``hostage taking'' and ``extortion'' and ``lunacy.'' We only have to turn back to Ronald Reagan to remember what he had to say on this. He said: This brinksmanship threatens the holders of government bonds and those who rely on Social Security and veterans' benefits. Interest markets would skyrocket, instability would occur in the financial markets, and the Federal deficit would soar. The United States has a special responsibility to itself and to the world to meet its obligations. Those who have threatened, for the first time in U.S. history, for the United States not to meet its obligations, which would result in a devastating impact for families across this Nation, those who carried out that threat did so in the wrong spirit--not the spirit of America pulling together, but in the spirit of creating a situation of hostage taking and extortion designed to protect the most powerful and wealthy at the expense of families across this Nation. Because this deal does damage to jobs and contributes to a gathering storm in 2012 that threatens to take us back to a double-dip recession, because the cuts are concentrated on the programs such as education and Head Start and Pell grants that support the success of our children and the success for our future economy, because it doesn't take one slim dime of contribution from those who are most able to contribute in our society, and because it was forged out of a fundamentally inappropriate use of extortion against the American family--for those four reasons I will oppose this deal. Thank you, Mr. President. I yield the floor.

Mr. MERKLEY

Mr. MERKLEY. Mr. President, I rise to address this issue of the debt limit and how we are going to go forward. I think it is important, given the conversation I have been hearing this morning, to understand some of the key features that are under discussion. The first is that the plan that came from the House last night, the Boehner plan, requires the second half of the debt ceiling to be lifted only if a balanced budget amendment is passed and sent out to the States. In other words, it puts a two-thirds vote of each Chamber basically on the process 6 months from now. What that does is it says to our Nation that we are going to be in continuous debate over this issue the next 6 months, facing a two- thirds vote that is very unlikely to happen. So this crisis is not going to end, not on August 2, not on August 3, not on August 4 but not for 6 months into the future. Then it is not going to end because we are not going to have a two-thirds vote. It sends exactly the wrong message to our business community which is waiting for a sense of stability that we are through this moment. It sends the wrong message to the international world that is looking at the question of whether they are going to buy Treasury bills. It sends the wrong message in regard to our reputation in the world. This plan of continuing the crisis for 6 months in order to bring this Nation to its knees just so folks campaign on the fact that they will do better, if you will, does not represent the best of the American spirit. We should be coming together to solve problems, not to extend problems, not to amplify problems, not to hurt families across the United States of America and hurt small businesses across this land. The second thing the proposal did that we faced last night is it took defense spending off the table for 2 years. Why is this important? It is important because defense spending has grown by over 300 percent in the last decade. It is important because the recent Secretary of Defense, Robert Gates, said there are over $100 billion of defense programs that do not contribute to our national security. We must be looking at programs that do not contribute for their intended purpose if we are going to take and address our fiscal situation with the best possible path for America. Then the Speaker said: Do you know what. There is going to be a supercommittee, but I, the Speaker, am only going to allow it to consider cuts to direct spending, and I will not appoint anyone who would look at the full range of options that is to include programs tucked into the Tax Code. Just a few minutes ago, my colleague from Florida said if there are tax programs which are there not because of good policy but because of good lobbying, those need to be on the table. He is absolutely right. It is a situation where every citizen understands that whether we spend $10,000 on a grant or spend $10,000 on a tax credit, it is the same $10,000. There is a reason the Boehner plan has put tax loopholes and tax earmarks and tax programs off the table; that is because inserted into the Tax Code are programs for the wealthy and the well-connected. Why do they want their programs in the Tax Code? Very simply, they avoid the annual authorization process. They avoid the annual appropriations process. In a way, we can think of them as superprograms because they don't get reviewed regularly. That is where the well-connected and the wealthy want to have their programs placed, and they have been very successful. It has been over a quarter century since we have had a systematic review of these programs. But here we are in a fiscal crisis. It makes sense to examine the tax loopholes, many of which have outlived their use, and many others which may still be very valid--and those are the ones we should keep--but we need to examine all of them. I had a colleague come to the floor the other day, a colleague across the aisle, and he made this argument. He said: There are some tax programs that benefit the middle class, and he proceeded to put up all these charts and all these numbers about programs that benefit the middle class. He concluded that because some of the tax programs benefit the middle class, no tax programs should be discussed as part of this issue. Well, let's apply the same logic to our appropriations programs. Can't anyone say there are some direct spending programs that benefit the middle class? But then do we turn around and say all these programs should be left unexamined as a result? Of course not. Nor was my colleague across the aisle willing to make that argument. But why did he make such an absurd argument that because some programs are useful, we shouldn't look at any of the programs in the Tax Code? Because he wanted to protect the programs for the wealthy and well-connected. I will tell you, today, there is something terribly wrong with coming to this floor to protect the programs for the best off in our society and doing so under the false claim that they are here to fight for working families. That is wrong, and that is why we must look at every single program. There is another problem in the bill that we have; that is, if you take Boehner at his word and he is going to take the $1.5 trillion in the Tax Code under tax expenditures and not allow them to be examined, then the only place we end up going to reach the numbers involved is Medicaid and Medicare: Medicaid, health care for the poor; Medicare, health care for our seniors. It seems there are Members of this Chamber who want to think of health care as a special privilege for only those who are wealthy in our society. Maybe they should come and live in my community, where we understand that the quality of life is deeply dependent upon one's health. There was indeed a very interesting experiment in Oregon over the last few years. We did not have enough funds for everyone to participate in Medicaid, called the Oregon Health Plan, and so there was a lottery. So for the first time anywhere in the Nation, there was the ability to study those who got to sign up against a control group of those who didn't. We found out Medicaid made a profound difference in people's lives. It shouldn't come as any surprise that health care makes a profound difference, but many people on this floor have questioned whether health care matters. It is always interesting to hear people who have access to health care, who have it because they are wealthy, who have it because they have a job right here that gives them health care, wondering why we should bother to care about health care for others. These issues are issues we must address as we go forward. Let me note then that if we proceed with a plan that is guaranteed to paralyze this Chamber over the next 6 months, with an impossible hurdle at the end of that period, we will destroy this economy. We are flat right now. We are not gaining ground. We had a bill, small business innovation bill, research bill on the floor, debated it for 6 weeks, a routine bill. My colleagues across the aisle voted not to end debate so there couldn't be a vote on taking this bill forward. They were deeply determined to prevent bills creating jobs from getting to the President's desk. Indeed, because we have not been able to take those key pieces of legislation and go forward, here we are with a flat economy. Now they want to take it to its knees. If we create this uncertainty over the next 6 months, the interest rate goes up on the Treasury bills, the interest rate goes up on home mortgages, the interest rate goes up on car loans, the interest rate goes up on small businesses, and we get greater unemployment. Is that the outcome we want? Interest is an empty tax, a tax on every family. The estimate is it would be about $2,000 a year and it buys us nothing, nothing but destruction of the economy. That must not happen.

Mr. MERKLEY

Mr. MERKLEY. Mr. President, I thank the Chair for leading the moment of silence we just had for Officer Jacob Chestnut and Detective John Gibson of the U.S. Capitol Police. It is important to recognize that each and every day the citizens of the United States come to the Capitol. They are able to visit this Chamber and visit the offices of their elected Senators and, across the building, the offices of the Members of the House of Representatives. They are able to do so because the Capitol Police maintain a form of security that gives us this access while at the same time protects the functioning of democracy from the very real threats of a changing world. So it is appropriate that the east front door was renamed the Memorial Door in honor of Officer Jacob Chestnut and Detective John Gibson and that we take this moment to recognize the service of all of the members of the Capitol Police who not only protect all of those who work here, all of those who legislate here, but all of the citizens of the country who come to advocate for their concerns. Thank you, Mr. President. I note the absence of a quorum.

Mr. MERKLEY

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

Mr. MERKLEY

Mr. MERKLEY. Madam President, this weekend I was in eastern Oregon holding townhalls. At each gathering, citizens asked me: How important is August 2? Are the Members of the Senate going to be able to come together and make sure our Nation doesn't default? I rise today to address that question. Indeed, it would be historic, the first time in the history of the United States that we will have refused to pay our bills. Some of my colleagues have called into question the significance of such an event. One of my colleagues said: I am a little bit cynical about the scare mongering and putting America's back up against this August 2 deadline just to get an increase in the American credit card. I heard some of my colleagues talk about the situation in which they view paying the interest on Treasury bills as equivalent to a family holding a mortgage; and the fact that the United States has other bills, such as checks to write to our veterans and our senior citizens, as more equivalent to utility bills; and that somehow, as long as you keep paying on your mortgage, you can quit making your payments on your utilities; that is, other payments for debts and obligations we have already incurred. I want to clarify that this is a deeply flawed analysis because we don't have our national debt locked in for 30 years in a situation where we don't have to worry about changes in interest on it as long as we keep making our payments. Indeed, every week there is an auction of Treasury bonds. Thus, even if we make our payments on our interest, if we are not making our payments on other obligations in the United States, that translates into a sense that we are in trouble, and we will have to pay higher interest on the Treasury side. So it is as if you had to refinance your family mortgage and you knew that if you didn't pay your utility bills, you weren't going to be able to get that bill refinanced or at least you would have to pay higher interest. The consequences are substantial because this would be an increase in interest that is like a tax on all Americans, on all small businesses, on the entire economy, and a tax that buys us nothing of value. A Representative from the House has said, referring to the possibility of losing our AAA rating: I am not as worried as Moody's or anyone else as this economy gets worse . . . I don't take the premise that we're going to default on our obligations. Quite frankly, to believe that we can ignore payments on our debts and not have serious consequences is way off the mark. If we don't hit August 2 with action and we don't get our act together by then, on August 3 we will fail to make payments, and there will be a severe impact on our national economy. No matter how we shuffle around the money, we will not have enough money to pay some of our obligations, whether it be our interest payments, Social Security checks, checks to veterans, military checks--you name it--and our credit rating will be downgraded. Already, the ratings agencies have stated as much. As Senator Schumer and others have shown very effectively, there is no way for revenues we have coming in to cover the full set of obligations we have incurred. This cavalier attitude about the consequences of default ignores the fact that default will have an immediate impact on interest rates and could send our economy into quite a tailspin. That is the last thing families need--higher costs in the short term and perhaps a severe loss of jobs and a much deeper recession. That would put us in a hole deeper than the one we have now. It would not facilitate our path to a solution; it would hinder our path to fiscal responsibility. I thought I would note that the impact on families is fairly direct. Most major items families buy are with loans. A three-quarters of a percentage point increase on the interest rate for Treasury bonds, which J.P. Morgan has estimated would be the minimum it would rise in default, translates into serious costs for a family. Let me be clear. This is the best-case scenario. The consequences could be much more severe. Let's start first with the consequences on a mortgage. The average family takes out a loan of $172,000 to buy their home, with a monthly mortgage payment of around $1,000. The expected increase in Treasury bond rates would translate into higher rates for mortgages, and it would cost the average family about $1,000 more per year. This would be on new loans. Families who have adjustable-rate mortgages based on Treasury rates would also be impacted. Let's take a second look at credit cards. Families use credit to pay for everything from food, to gas, to prescription drugs--it is especially true during hard times such as we are in now. The median balance for an American with credit card debt was $3,300 in 2009. That means the average family with credit card debt will pay about $250 more in interest per year. Let's turn to some of the other family expenses. Analysts estimate that a technical default on bonds will also diminish the trading value of the dollar, maybe causing it to fall 5 percent or so against competing currencies. This would have a direct impact, and we would feel it most directly in the cost of oil. I have been arguing that we need a plan to end our dependence on overseas oil. We send $1 billion a day out of our country. That creates jobs overseas rather than here at home. But ending our dependence on overseas oil can't happen overnight, so all of the costs of that additional oil, at a different exchange rate, would be felt in the family budget. Indeed, if there was a decline of 5 percent, the impact would be felt on food. It takes a lot of energy to power agriculture. The estimate is about $318 more per year for a family. That is a J.P. Morgan estimate. Similarly, on utilities, we have all heard horror stories throughout the recession that families have to decide which utilities to pay first. Mothers and fathers are sitting around the kitchen table thinking, Can we get by without electricity or should we postpone the water payment or perhaps the natural gas payment? Default would make the situation worse for families, adding, at that 5 percent estimate from J.P. Morgan, about $182 more per year. Remember, this is the best- case analysis. Gasoline at the pump is similarly affected. Taking a look at average consumption per year, families would pay about $100 more per year on gas. Again, that is the best case. If we total these, we can see that the overall cost for a middle- class family would be on the order of about $1,850. We can round it off to about $2,000 per family. I don't know about the block you live on, but on the block I live on $2,000 is a real blow for working families. That is just the beginning of this story because, as it unfolds, the impact on the dollar and the shock waves that would flow would very likely send us into a double-dip recession. Now, it would have an impact as of August 2 or 3 on Social Security and Medicare payments. A bipartisan committee has taken a look at it and backed up Senator Schumer's statement that there would not be enough revenue coming in to cover all of our obligations. The stock market would probably take a hit, and 401(k)s could be severely impacted. Other savings could be severely impacted. We all know how that felt in late 2008 and 2009 when families often saw their life savings wiped out in a few short weeks. The bigger issue is jobs. Perhaps more than half a million jobs could be lost. This analysis is from the Third Way. Their estimate is 640,000 jobs. Oregon has about 1 percent of the Nation's population. This would translate into about 6,000 to 7,000 jobs in my home State. We would love to have an increase of 6,000 to 7,000 jobs in Oregon, and we would hate to see a loss of 6,000 to 7,000 jobs. I know that would extend throughout our Nation. We need more jobs, not fewer jobs. In addition, this situation will have an impact on our debt. Contrary to what some of my colleagues have said, it will make the situation worse, not better. That is because the interest payments on the debt will go up--$1.3 trillion additional in new debt. Is that really the direction in which we want to go? Is that really good stewardship of the economy--to impose a situation in which Social Security checks might be halted and veterans might go to the mailbox and find it empty; that the bills will have to be missed, and it will put people more directly in harm's way in terms of being able to keep house payments up and avoid foreclosure in a situation where we already face a tsunami of foreclosures across this country? At a minimum, the American families will be impacted by higher costs on their homes, credit cards, essential goods--food, gas, utilities--and then with the significant possibility of hundreds of thousands of Americans losing jobs, and additional debt, not less. It is important that we come together and have a sound deal so that we can avoid this situation. This isn't about incurring new spending, this is about paying the bills on spending decisions that were made in the past. I disagreed with a lot of those spending decisions. I disagreed that Medicare Part D should have been enacted without a way to pay for it. I disagreed with the giveaways for the best off in America, the wealthy and well-connected, when we could not afford it, which reversed the surplus into a deficit in this country. I disagreed with a strategy where we are spending $120 billion in Afghanistan and a strategy of nation building that is not the best use of national security and of our soldiers, who are there to fight for our national security. Those decisions were made in the past, and we must pay the bill on those decisions, even though I disagreed with them. Then we need to put together a plan that takes on our deficit and our debt. That plan has to put all of the options on the table. Some of my colleagues across the aisle said: Well, we want to protect the tax spending programs, where we have tucked in tax provisions for the wealthy and well-connected. They want to defend those, and they want to cut the programs for working Americans. That is unacceptable. We have seen an enormous increase in the disparity between the wages and welfare of our citizens in general and the best off becoming much wealthier proportionately. We can't continue to say that we are going to protect the well-connected while attacking working families. That is not the America we want to build. We want to build an America where families can thrive, provide a great foundation for their children to also thrive. That means all policies have to be on the table, all spending programs, whether in tax bills or in appropriations bills, have to be on the table, and we have to weigh them one against the other to say which is most important in creating a stronger economy, which is more valuable in strengthening the financial foundations of our families. That is the process we must go through, and that is the process that will put us back on track. But let us not doubt for a moment that when the citizens of my State come to a townhall and say, How important is it that we get this figured out by August 2, the answer is, Very important. When they ask, Will it hurt us if we fail, the answer is, Yes, it will hurt us. We will be shooting ourselves maybe--I say in the foot, maybe worse. This is a serious issue. We must come together, not as Democrats and Republicans but as Senators working together for the best future for the United States of America. Mr. President, I suggest the absence of a quorum.