John Thune

Mr. THUNE

Mr. THUNE. Mr. President, today I recognize Logan Penfield, an intern in my Washington, DC, office, for all of the hard work he has done for me, my staff, and the State of South Dakota. Logan is a graduate of Northwestern High School in Mellette, SD. Currently, he is also a graduate of South Dakota State University, where he majored in political science. He is a hard worker who has been dedicated to getting the most out of his internship experience. I extend my sincere thanks and appreciation to Logan for all of the fine work he has done and wish him continued success in the years to come.

Mr. THUNE

Mr. THUNE. Mr. President, I come to the floor today to talk about the debt crisis facing this country and why I believe any deal to avert the fiscal cliff must address serious entitlement reform. We should not let the discussion around taxes, which is sort of dominating the airwaves here in Washington, distract us from the fact that Washington has a spending problem, not a revenue problem. Every independent expert who examines America's long-term structural fiscal dilemma comes to the same conclusion: Entitlement programs are the drivers of our national debt over the long term. Those who argue that we can dig our way out of a $16 trillion debt-- and counting, by the way--by raising taxes are ignoring reality. According to the Congressional Budget Office's most recent forecast, under the current tax rates, revenues over the next 10 years will average roughly 18 percent of GDP. In other words, Federal revenues will return to their historical average without raising taxes on anyone. I will repeat that because I think it is an important point. Our tax revenues will go back to an average of 18 percent over the next decade, which is the historical average, and that happens with existing tax policy in place, without raising taxes on anyone. In fact, according to the Congressional Budget Office, under the current tax rates, revenues as a percentage of GDP will reach 18.6 percent by the year 2022--a decade from now. That is more than half a percentage point higher than the historical average. Clearly, our budget problems are not because we have too little revenue. Our budget situation today relates directly to Washington's addiction to overspending. In fiscal year 2007, before the recession, total Federal revenue was roughly $2.5 trillion and total Federal spending was approximately $2.7 trillion. Five years later, for fiscal year 2012, which recently ended, total Federal revenue was $2.45 trillion--basically back to the prerecession levels, about the same revenue we had back in 2007--but total Federal spending was above $3.5 trillion. In other words, tax revenue is back to where it was before the recession but Federal spending is now $800 billion higher than it was just 5 years ago, in 2007. Even the Washington Post on their editorial page, which is not something I usually agree with, agrees. In an editorial entitled ``Mr. Obama's Time to Lead on Entitlements,'' the Post argued: Since 60 percent of the federal budget goes to Medicare, Medicaid and Social Security, there's no way to achieve balance without slowing the rate of increase of those programs. Speaking of entitlement programs, the Post editorial went on to say, ``At some point he,'' referring to the President, ``has to prepare the American people--and his own supporters most of all--for the hard decisions required to put the country on a sound financial footing.'' Even the Washington Post agrees that we must take on the driver of Federal spending, entitlement spending and, second, that the President has to lead on that issue. Unfortunately, the President has continued campaigning around the country for higher taxes, but until he gets serious about leading on the issue of entitlement reforms, we simply will not be able to reach an agreement to tackle our fiscal problems in a meaningful way. A look at the President's proposed tax hike demonstrates why we simply cannot tax our way out of a debt crisis. The President is proposing $68 billion in revenue next year by raising the top tax rates--in the process, raising taxes on nearly 1 million small business owners. The White House claims this will not have a major negative effect on America's business owners or their employees. But according to the National Federation of Independent Business, small businesses created two-thirds of the new jobs in the last decade, and those small businesses are the most likely to be hit by the new tax increases, and those are the small businesses that employ, by the way, 25 percent of the total workforce. According to a study by Ernst & Young, the President's proposed tax increases will result in 700,000 fewer jobs, a nearly 2-percent decline in wages and economic growth that is 1.3 percent lower than it otherwise would be. Yet despite the broad impact of these taxes on small businesses and our economy, this tax hike would only fund government operations next year for about a week. If the President got everything he wanted in the form of higher rates on income, higher rates on capital gains and dividends--all of those things go back to the higher rates--it would fund government for about a week. The President appears to have an obsession with raising income tax rates and claiming that it is the only way to get significant new revenues. But this is not true according to the administration's own budget. According to this administration's budget, the President's marginal income tax rate hike on high earners will raise $442 billion over 10 years. As I mentioned, if we look at just the top two rates, we would raise about $442 billion over 10 years. If we average that out, it ends up being about $40 billion a year. Yet, according to the same budget, the President's proposal to limit the value of tax expenditures for higher income earners by itself raises $584 billion over 10 years. In fact, the marginal tax rate increases alone are only one-fourth of the total $1.6 trillion in new taxes that the President has proposed. So it is simply not true, as a factual matter or as a matter of arithmetic, that we need to raise marginal income tax rates to raise significant revenue. Yet the President continues to insist that marginal income tax rate increases be part of any fiscal cliff agreement. We have to wonder: Is it because of the arithmetic or is it because of a liberal ideology that considers higher income tax rates to be the holy grail of tax policy. The last thing we ought to do if we want to boost economic growth is to raise tax rates, especially marginal income tax rates. Marginal income tax rates matter because they have incentive effects. They affect a worker's decision to work an additional hour. The Congressional Budget Office explains that phenomenon in this way: Increasing revenues by raising marginal tax rates on labor would reduce people's incentive to work and therefore reduce the amount of labor supplied to the economy. Most Americans understand this logic intuitively. If we want less of something, raise the cost of producing it by taxing more heavily. If we raise marginal income tax rates, we will get less income as well as the labor that gives rise to that income. If we raise taxes on investment, we are likely to get less investment. It is time to recognize that we don't live in a static world. Taxpayers will adjust to higher rates and, in fact, this has already started to happen. Consider that in the last month we have seen a host of companies announcing special dividends or rushing to move up their dividend payments before the end of the year. There were 228 companies that announced special dividend payouts in the month of November. This compares to 54 companies in the month of October and 72 companies in November of last year. So we have three times as many companies announcing that they are going to do special dividend payouts in the month of November as we had last year. We have to believe this is a direct result of the administration's plan to raise the top dividend tax rate from 15 percent today to 43.4 percent next year. The top tax rate on dividends next year will nearly triple unless we take action to prevent that. Rather than raising taxes on America's small businesses, we should reform our Tax Code in a way that encourages economic growth and therefore generates new revenue. Instead of the President's approach to simply redistribute revenue, we should be focused on growing the economy over the long run thus increasing opportunities for wealth creation for all Americans. We know this approach can work because we have done it before. The Tax Reform Act of 1986 lowered rates, broadened the tax base, and resulted in one of the longest economic booms in American history. Harvard economist Dale Jorgenson recently estimated that the gains available from fundamental tax reform amount to as much as $7 trillion in current dollar terms. The Joint Tax Committee has projected that revenue-neutral tax reform that lowered rates and broadened the tax base could lead to an increase in GDP by as much as 3.5 percent in the long run. Mark Feldstein, former Chairman of the White House Council of Economic Advisers, calculated that lowering individual tax rates by only 10 percent, coupled with base-broadening measures to ensure revenue neutrality, would raise over $500 billion in new revenue related to growth over the next 10 years. That is lowering individual tax rates by just 10 percent. Increasing the rate of economic growth is the single most important thing we can do to ensure greater prosperity for Americans today but also for the coming generations. A recent report by Third Way, a center-left think tank, highlighted the importance of raising economic growth back to the post-World War II average of 3.3 percent. According to this report, increasing economic growth back to 3.3 percent starting in the year 2018 would result in nearly 2 million additional jobs by the year 2022 and roughly 5.3 million new jobs by the year 2030. It will result in more than $600 billion in new revenue by 2022 and more than $5 trillion in additional Federal revenue by the year 2030. Christina Romer, former Chair of the White House Council of Economic Advisers under President Obama, has equated a 1-percentage-point change in GDP with 1 million jobs per year. Given these estimates, there should be a bipartisan consensus that what we need is higher economic growth, not higher taxes. I would propose that the fiscal cliff is both a challenge and an opportunity. It is a challenge to get the Federal Government's runaway spending under control, but it is also an opportunity for us to make real entitlement reforms and to put in place a structure for comprehensive tax reform next year that will have enormous benefits for our economy. I hope the President of the United States will soon join the discussion that many of us have been having about comprehensive tax and entitlement reforms. Presidential leadership on both of these critical issues is long overdue and is essential. We cannot do big things in this country, such as entitlement reform or tax reform, absent Presidential leadership. President Obama has a unique opportunity in his second term to do some things that are desperately needed for this country and to put our country on a path toward fiscal solvency, a trajectory that will ensure a brighter, better, and more prosperous future for generations of Americans. In order to have that happen, we have to have the right policies in place, and those are policies that encourage jobs and economic growth. The President said in his postelection press conference that his No. 1 priority was going to be jobs and the economy. I could not agree more with that statement. The way we achieve that is by getting fiscal discipline in place through budgetary restraint and by having policies in place that promote robust economic growth. If we look at what solves these problems, the best thing we can do is to grow our economy and then a lot of these debt and deficit issues become much smaller by comparison. It really does come down to growth, but we simply cannot grow the economy by raising taxes on small businesses, job creators, and people out there who are creating the jobs and impact literally millions of middle-class families who are employed by those very same small businesses. Millions and millions of Americans work for small businesses in this country. If the President has his way, those Americans would see their taxes go up. That is not something we want to see happen in a weak economy. In fact, it was only 2 years ago in 2010 when the President said that we ought to extend all of the tax rates because we should not raise taxes in the middle of a weak economy. At that time economic growth on an annualized basis was 2.4 percent. Economic growth now on an analyzed basis is 2. We have a weaker economy today than we did in 2010 when the President said raising taxes in the middle of a weak economy would be a mistake and a bad idea. I agreed with him then, and I hope he will come to the conclusion now that this is a bad solution. I know the President is insistent on higher tax rates, but as I pointed out earlier, if we raise the top two marginal income tax rates alone, we generate about $40 billion of revenue next year. If we add to that capital gains and dividend tax rate increases, we get about $68 billion in additional tax revenue next year, which funds government for just under a week. It simply does not solve the problem if we are talking about fixing the deficit. On the other hand, what it does do is make it more expensive and more difficult for American businesses to create jobs to get Americans back to work, to get our economy growing again, and to make this country prosperous for future generations. I yield the floor.

Mr. THUNE

Mr. THUNE. Mr. President, today I wish to recognize Jason Simmons, an intern in my Sioux Falls, SD, office, for all of the hard work he has done for me, my staff, and the State of South Dakota over the past several weeks. Jason is a graduate of New Underwood High School in New Underwood, SD. Currently he is attending the University of South Dakota, where he is earning his master of business administration in health services administration. He is a hard worker who has been dedicated to getting the most out of his internship experience. I would like to extend my sincere thanks and appreciation to Jason for all of the fine work he has done and wish him continued success in the years to come.

Mr. THUNE

Mr. THUNE. Mr. President, today I recognize Colleen Guinn, an intern in my Washington, DC, office, for all of the hard work she has done for me, my staff, and the State of South Dakota. Colleen is a graduate of Brandon Valley High School in Brandon, SD. Currently, she is attending Georgetown University, where she is majoring in government and English. She is a hard worker who has been dedicated to getting the most out of her internship experience. I extend my sincere thanks and appreciation to Colleen for all of the fine work she has done and wish her continued success in the years to come.

Mr. THUNE

Mr. THUNE. Mr. President, I ask for the yeas and nays.

Mr. THUNE

Mr. THUNE. Mr. President, I rise today in strong support of the legislation before us to enact permanent normal trade relations with respect to Russia and Moldova. This legislation will also put in place a new mechanism for combating human rights abuses and strengthening the ruling of law in Russia commonly known as the Magnitsky bill. The economic argument for the legislation before us is clear. Russia is the world's sixth largest economy; the world's fifth largest global importer of agricultural products, and home to 140 million potential customers, the largest consumer market in Europe. Russia is already an important and growing market for U.S. businesses. Of the top 15 U.S. trading partners, Russia was the market where American companies enjoyed the fastest export growth last year, at 38 percent. If we enact PNTR, it is estimated that U.S. exports of goods and services to Russia could literally double over the next 5 years. That is why groups ranging from the American Farm Bureau to the National Association of Manufacturers to the National Corn Growers, just to name a few, strongly support PNTR. Just last week I met with representatives from the South Dakota Soybean Association, and I was reminded of the importance of Russia as a growing export market to my State of South Dakota. While greater access to the Russian market will benefit a wide range of U.S. companies, such as manufacturers and service providers, I would be remiss not to point out the enormous opportunity for America's agricultural producers in Russia. Consider that Russia is the world's largest importer of beef on a quantity basis, with imports of nearly $4 billion last year. Russia is the world's fifth largest importer of pork products as well as the world's largest importer of dairy products. Despite the problems we have encountered recently with respect to our poultry exports, America remains the single largest supplier of poultry to the Russian market, accounting for 50 percent of Russian poultry imports last year. Under the terms of Russia's WTO accession, which occurred last year, Russia is obligated to reduce tariffs across a wide range of agricultural products while also adhering to WTO rules regarding sanitary and phyto-sanitary measures. Once we have enacted PNTR the United States will have the ability to enforce visa commitments through the World Trade Organization dispute settlement process. It is important to note that our vote on passage of this bill is different than voting on a trade agreement where both sides make concessions in order to reach a conclusion. In contrast, our vote on the House-passed Russia PNTR bill is entirely one-sided in favor of the United States. Russia joined the World Trade Organization in August and will remain a member of the WTO regardless of what we do with respect to PNTR. We are not giving Russia anything new because they have received PNTR on a recurring annual basis for the past 20 years. The only issue today is whether we will now allow U.S. businesses to take full advantage of the new trade commitments that Russia has made as part of joining the World Trade Organization. If we do not act, American manufacturers, farmers, ranchers, and service providers will remain at a competitive disadvantage relative to their foreign competitors doing business in Russia. At a time when our economy is growing more slowly than any postrecession recovery since World War II, failure to enact PNTR makes no sense. American export growth has been one of the true bright spots since the great recession. According to the Department of Commerce, jobs supported by exports increased by 1.2 million between 2009 and 2011. If we are serious about encouraging job creation, we need to continue to open new job markets abroad for American exports. Normalizing our trade relationship with Russia is an important step in the right direction. While this legislation is about supporting American jobs by promoting our exports, we should also recognize the importance of the Magnitsky provision included in this bill at the insistence of Senators Cardin, Kyl, McCain, and Wicker, among others. By replacing the outdated Jackson-Vanik law with a new mechanism to support democratic reforms in Russia, this legislation will strengthen the rule of law while combating corruption and human rights abuses. The only thing surprising about this vote is that it did not happen sooner. Nearly 6 months ago, on June 12, I joined Senators Baucus, McCain, and Kerry in introducing legislation to enact PNTR. With the leadership of Senator Hatch and others, we approved the PNTR legislation in the Finance Committee by a unanimous vote on July 18. Unfortunately, many of us believe the administration did not push forcefully enough for enactment of PNTR before Russia joined the World Trade Organization in August. As a result, we are just now finally considering this legislation more than 3 months after Russia's WTO accession. Nevertheless, I look forward to enactment of this bill, especially considering the overwhelming bipartisan vote of approval for this legislation in the House of Representatives just a few weeks ago. While today's vote is specific to Russia and Moldova, I hope this vote will remind us of the importance of moving forward on trade in general. It is an unfortunate reality that when America stands still on trade, we are actually falling behind relative to the rest of the world. There are more than 100 new free-trade agreements currently under negotiation around the world. Yet the United States is party to only one of those negotiations, the Trans-Pacific Partnership. The United States has not successfully negotiated a single new trade agreement during the 4 years of the Obama administration, and this administration has not yet asked Congress for a renewal of trade promotion authority, despite the fact that TPA expired over 5 years ago. The cost of inaction on trade is high because we live in a global economy where American producers rely on access to foreign markets. More than 95 percent of global consumers live outside the United States. Consider that in 1960 exports accounted for only 3.6 percent of GDP. Exports account for 12.5 percent of our GDP. Exports of U.S. goods and services supported over 10 million American jobs. If we do not aggressively pursue new market opening agreements on behalf of American workers, we will see new export opportunities go to foreign businesses and foreign workers. So while I am pleased that we are considering PNTR today, I hope President Obama in his second term will recognize the potential for increased trade opportunities through a more aggressive trade agenda. I look forward to the President signing this legislation into law, and I urge all of my colleagues to vote for the legislation before us when that vote comes up tomorrow at noon. I yield the floor.

Mr. THUNE

Mr. THUNE. Madam President, I am working with the managers of the bill to try to address concerns they might have on an amendment I have filed at the desk and hope to get accepted. But I wish to speak to it now, if I might. Essentially, the amendment is just a sense of Congress regarding the Federal Government's use of spectrum, and, in particular, spectrum use of the Department of Defense. Spectrum is a very important resource to the Department of Defense, and it is a very important resource to the private sector. Unfortunately, spectrum is becoming a scarcer and scarcer resource, and it is increasingly necessary for there to be better and more efficient management of this scarce resource. Demand for spectrum is sharply rising due to the growing advanced network of communication devices that rely on spectrum to transmit and receive information. The rise of mobile devices, such as smart phones and tablets, the iPhone and iPad over the past few years, are the reason for this sharp rise in demand for spectrum. According to a recent study by Cisco, last year's mobile data traffic was eight times the size of the entire global Internet in 2000. The Cisco study predicts that global mobile data traffic will increase eighteenfold between 2011 and 2016 at a compound annual growth rate of 78 percent, reaching 10.8 exabytes per month by 2016. The rise in the smart phone and the tablet has contributed significantly to our Nation's economy. The Nation's mobile communications industry, by one estimate, directly or indirectly supports 3.8 million jobs, contributing $195.5 billion to the U.S. gross domestic product, and driving $33 billion in productivity improvements in 2011. With all that has gone wrong with our economy over the past several years, it is important that we as policymakers nurture the growth of the economy, especially where growth is already happening and, in fact, is exploding. We need to enact smart progrowth policies relating to spectrum. I know the spectrum issue isn't easy to understand or to manage, but it is crucial we seek to better manage this scarce resource, and where it is possible to allocate more of the scarce resource to the private sector where it can create jobs and grow the economy. That is the reasoning and purpose behind my amendment. The Federal Government controls the vast amount of spectrum for its own use. It is probably not all as efficiently managed as it could be. Undoubtedly, a sufficient amount of this spectrum could be made available to help create jobs and grow the economy. One of the low-hanging fruits we can deal with almost immediately is the band of spectrum known as the 1755-to-1780 megahertz band. This spectrum is particularly well suited for reallocation to commercial use because it is identified internationally for commercial mobile services and is used for that purpose throughout most of the world. This 1755- to-1780 band is also immediately adjacent to existing domestic wireless spectrum and would fit seamlessly into the current mobile broadband spectrum portfolio allowing for more immediate equipment development and deployment. There is no reason for further delay in the reallocation of the 1755- to-1780 band for commercial use. This band was identified for commercial broadband use internationally at the 2000 World Radio Communications Conference over 10 years ago. Despite the international designation of the band for advanced wireless use, it is still allocated domestically for government use, heavily by DOD. The National Telecommunications and Information Administration, or NTIA, the agency which is responsible for all government spectrum, issued studies and reports in 2001, 2002, and 2010 that addressed use of the band for commercial use but took no action. The spectrum was also identified in the National Broadband Plan as potentially available for reallocation. In March 2012, NTIA released its latest report assessing the availability of the band. Unfortunately, the 2012 NTIA report contains no firm deadline for action and no clear path to making the band available for commercial use. It contemplates a potential 10-year timeframe and potential shared use of spectrum but defers any formal recommendation regarding reallocation until the completion of still further study. Had NTIA acted when the first band was allocated internationally for advanced wireless use, the band might already be available for commercial services. Without a firm deadline DOD is unlikely to agree to reallocation, and the prospects for reallocating the 1755-to-1780 megahertz band for commercial use remain slim. That is why my amendment urges the President to direct Federal users on that 1755-to-1780 band to prepare, not later than May 31, 2013, a reallocation plan that includes the cost of relocating from this band, and urges the Federal Communications Commission to reallocate this band to commercial use. I hasten to add that it is important the cost of relocating the band should be verifiable and transparent. The report for the underlying bill requires the Government Accountability Office to determine if the cost of vacating or sharing the 1755-to-1780 band is sufficiently captured in estimates. I look forward to the GAO's report on this issue. There are those who may voice concerns about how this impacts our national security. I take a back seat to no one in being pro-military. I sat on the Armed Services Committee for 6 years. I have an Air Force Base in my State that I care deeply about. It is important to understand that existing law provides ample protection to DOD for the relocation to replacement spectrum. There are those concerned about the cost to DOT to relocate. The law requires DOT relocation costs be covered by the Spectrum Relocation Fund, which is funded through the proceeds of the auction of the band to commercial licensees. If the auction does not raise 110 percent of the relocation cost, the auction would be canceled, assuring that incumbent users are made whole. Moreover, as part of the U.S. Middle Class Tax Relief and Job Creation Act of 2012, Congress expanded the scope of funding from the relocation fund to include the cost of planning for relocation. I am confident the Pentagon and the larger Federal Government can more efficiently manage its spectrum holdings and make available additional spectrum to help grow our economy and create jobs. I hope, Madam President, that we can work this out to have it included as part of the Defense authorization bill. I certainly believe it is an amendment that is important with regard to the issue I mentioned, which is the reallocation and relocation of spectrum in this country to allow for multiple uses--obviously, important private commercial uses--out there and an enormous demand, a demand that is adding significantly to our economy and creating jobs for literally thousands and millions of Americans. Madam President, I yield the floor.

Mr. THUNE

Mr. THUNE. I want to echo the words of my colleague from Wyoming with regard to the whole issue of the Senate rules. I come from the House of Representatives. I came to the Senate having first served in the House of Representatives, three terms there. The House of Representatives, of course, is very structured. There is a Rules Committee. If someone wants to get an amendment considered, debated, voted on in the House of Representatives, there is a process. They have to go plead their case to the Rules Committee. The Rules Committee can decide, no, we are not going to allow that amendment to be considered; we are not going to allow that amendment to be debated. They can decide which amendments are offered in what order and how much time is allowed on each amendment. It is a very structured process in the House of Representatives, but it makes it very difficult for an individual Member to be able to have their voice heard in the House of Representatives. That is the way it works. I had the luxury, I guess, while I was serving there of being in the majority. But even in the majority a lot of times I could take what I thought was a very worthwhile amendment, reflective of the views of the people who sent me there to represent them, and they could shoot it down. I never got a chance to have that amendment debated or voted on. That is what is distinctive about the Senate. That is what the Founders intended with the Senate--to allow for open debate, to allow individual Members to come down to represent their constituencies and to debate the big issues of the day in a way that is different and distinct from the House of Representatives. I think what many of my colleagues who are proposing this rules change want to see happen is they want to see the Senate function more like the House. It was not designed to. This is a very different place. It was designed to be a very different place where we have debate, where we have votes on amendments, where individual Members have an opportunity--particularly members of the minority in the Senate--have an opportunity to have their voices heard and the voices of their constituents heard. So this is an unprecedented power grab by the majority. What the majority leader is proposing is essentially to break the rules to change the rules. That will be a legacy, if he is successful, that he will have to live with because he will change the way that this institution has functioned for so long. If we think about how this ought to be done, there is a process by which rules changes can be considered in the Senate, and it starts with the leaders consulting and talking about whether some of those changes ought to be put in place, whether those are appropriate, and then getting the necessary two- thirds vote that is required under the rules of the Senate to change the rules. The Senate is a very different place from the House of Representatives. What we do ought to reflect that. We should not have these power grabs and attempts to violate the rules of the Senate in order to change the rules in a way that is completely inconsistent with the history and the tradition in the Senate. What the Founders intended when they created the Senate, distinct and separate from the House of Representatives, was to allow for debate and votes on amendments. I hope the majority leader and members of his party will see clearly to do the right thing and to go about this in the right way; that is, for the leaders to consult, and if there is a need for changes in the rules or modifications, let's do it in the way it has always been done, not by breaking the rules or changing the rules. Fiscal Cliff Madam President, I wish to speak as well to the issue that was raised by my colleague from Wyoming; that is, the fiscal cliff. We are on the threshold of something that could be very harmful to the economy of this country, very harmful to jobs. If we go over the fiscal cliff, the experts are telling us--and by the experts I mean not only private economists but the CBO and others in Washington, DC, who analyze and study such things--that we could plunge the country into another recession, we could see unemployment go above 9 percent if tax rates go up and a sequester is triggered a little more than 1 month from now. Longer term, we place unsustainable fiscal imbalances largely because of entitlement programs that have not been reformed in a way that aligns our current demographics with the needs of these programs. Entitlement spending is the largest driver of our national debt over the long term. Those who argue that we can dig our way out of more than $16 trillion in debt simply by raising taxes are ignoring reality. We have to do something to address what is our real problem in Washington, DC; that is, the spending problem, not the revenue problem. While it is true Federal revenue has declined over the past few years, it is due to the great recession, not because tax rates are too low. The average ratio of Federal revenue to GDP over the past 40 years has been about 18 percent. According to the Congressional Budget Office most recent forecast, under the current tax rates--the tax rates in place today-- revenues from 2013 to 2022, the next decade, would average roughly 18 percent of GDP. So let's be clear about exactly what the CBO is saying. The CBO is telling us Federal revenues will return to the historical average over the next 10 years without raising taxes on anyone. We are going to get back to the historical average. In fact, according to the CBO, under the current tax rates, revenues as a percentage of GDP will reach 18.6 percent by 2022, and that is more than one-half of a percent higher than the historical average. Clearly, any deal to address our fiscal situation should be first and foremost about spending, not taxes. Our spending problem is exemplified by the past few years in particular. If we go back to the fiscal year 2007, before the recession, total Federal revenue was roughly $2.5 trillion and total Federal spending was approximately $2.7 trillion. So $2.5 trillion in revenue and $2.7 trillion in spending, so we were still running a deficit of about $200 billion a year. For fiscal year 2012, which recently ended, total Federal revenue was $2.45 trillion, basically back to the prerecession levels, but total Federal spending was above $3.5 trillion. So what happened. Tax revenue is back to where it was before the recession, but Federal spending is now $800 billion-- almost $1 trillion--higher than it was just 5 years ago in fiscal year 2007. It is no wonder that Federal spending and our national debt will continue to grow for the foreseeable future. According to the CBO, mandatory spending, which comprised about 60 percent of total Federal spending in fiscal year 2012, is going to continue to grow, and if we look at what is driving that, it is Medicare, Medicaid, and Social Security. Those programs alone represent over 40 percent of Federal spending currently. Spending on these programs is projected to grow at an unsustainable rate and we cannot simply raise taxes to pay for all this new spending. That is the problem. We have a spending problem in Washington, DC, and not a taxing problem. We have to make significant changes in these programs to make our Federal entitlements sustainable and in line with today's demographics, and we need Democrats to join us in that effort. To put a fine point on all that, I wish to mention what the nonpartisan Congressional Budget Office report, which was issued on November 12 of this year--just a couple weeks ago--said: ``With the population aging and health care costs per person likely to keep growing faster than the economy, the United States cannot sustain the Federal spending programs that are now in place. . . .'' That is from the Congressional Budget Office. The President's own fiscal commission, the Simpson-Bowles Commission, noted in its official report: ``Federal health care spending represents our single largest fiscal challenge over the long run.'' Earlier this month, the Washington Post editorial board said, ``Entitlement reform must be on the table.'' Of the debt reduction plan, the Post editorial board went on to say, ``No serious plan can exclude entitlements.'' So we have experts inside and outside the government, we have the editorial boards of newspapers around this country, all recognizing what the real issue is; that is, the fact that Washington spends too much and it spends too much on programs that are unsustainable for our future. What we have to be able to do is to come up with ways in which we can reform these programs to make them more sustainable. Of course, if we look at Medicare spending alone, in 1967, it was proposed that by 1990 Medicare would spend about $12 billion. That is what the Congress projected when they created that program in 1967. That calculation, by the way, included inflation. If we look at actual Medicare spending in 1990, it was $110 billion--almost 10 times the amount that was estimated in 1967. This year, we will spend $550 billion on Medicare. Ten years from now, the Congressional Budget Office projects we will spend $1.1 trillion on Medicare. With regard to Social Security, for the past 2 years, this program has been operating at a cash deficit. If we look at the next 75 years, benefits promised to current and future beneficiaries exceed payroll tax revenue and trust fund redemptions by $8.6 trillion. The present course of Social Security is unsustainable, and the trustees report projects that the trust fund is going to be exhausted by the year 2033. In order to protect Social Security for future generations, it, too, must be reformed. We have to take on what is driving Federal spending and that is entitlement programs. We have to reform them. Raising taxes is not the solution. The President's only proposal so far is to raise taxes on small businesses to generate this next year what would be $68 billion in revenue which, by raising the two top tax rates in the process, would hit nearly 1 million small businesses. What is ironic about that is raising taxes on the small businesses that create jobs in this country and that grow our economy--actually raising taxes on them to generate $68 billion would fund the government a little under 1 week. That is what we are talking about. The dimensions of this problem are so vast we cannot solve them simply by raising taxes and particularly raising taxes on the very people we are looking to--small businesses. Raising taxes on small businesses would do harm to the economy. We would give back everything we get in the form of higher tax revenue by reduced economic growth. We have to deal with the fundamental problem we have; that is, entitlements. I hope my colleagues on the other side will work with us. I hope the President will work with us. The President knows what the problems are, but he has folks all across the country who are putting pressure on him to not deal with the issue of entitlement reform. But I hope he will come to the table and address this issue. We have a spending problem and we have a growth problem. If we can address the spending problem, get entitlement program reform on a sustainable path. If we can get progrowth tax reform put in place to grow the economy and expand the economy, we can solve these problems. People across this country expect us to. The world expects us to. The financial markets expect us to. It can't be done simply by raising taxes on small businesses which so far is all we have gotten from the administration and from many of the Democrats in Congress. We have to fix the spending problem and the growth problem. We have a solution to do that. We hope our colleagues will work with us to do that. I yield the floor.

Mr. THUNE

Mr. THUNE. Mr. President, today I wish to recognize Kelsey Luckhurst, an intern in my Aberdeen, SD, office, for all of the hard work she has done for me, my staff, and the State of South Dakota over the past several months. Kelsey is a native of Garden City, SD and a graduate of Clark High School. Currently, she is attending Northern State University, where she is pursuing degrees in history and political science. She is a very hard worker who has been dedicated to getting the most out of her internship experience. I would like to extend my sincere thanks and appreciation to Kelsey for all of the fine work she has done and wish her continued success in the years to come.

Mr. THUNE

Mr. THUNE. Mr. President, today I recognize Mike Modrick of Rapid City, SD. Mike, a recognized television personality in western South Dakota, is celebrating 25 years on October 26, 2012, as a meteorologist at KOTA Territory News and 30 years in weather forecasting. Mike is a graduate of Iowa State University with a bachelor of science degree in meteorology and a degree in speech. Shortly after graduating, Mike made his way to the beautiful, yet markedly unpredictable climate of western South Dakota where he has provided important safety and weather communications to the people of South Dakota for 25 years. Mike has received the Seal of Approval for Television Weathercasting from the American Meteorological Society, which is considered the most prestigious award in weather broadcasting. His dedication to timely, reliable forecasting across western South Dakota is indicative of his passion and commitment to the safety of all South Dakotans. As Mike celebrates his silver anniversary with KOTA, it is my pleasure to thank him for his service.

Mr. THUNE

Mr. THUNE. Mr. President, I would like to thank my colleague from Oregon, Mr. Merkley, for working with the Senator from Missouri, Mrs. McCaskill, and me today to address his concerns with our bipartisan bill, S. 1956, the European Union Emissions Trading Scheme Prohibition Act. The amendment, which he has filed for consideration and which is currently running through the hotline process, reconfirms that the Secretary of Transportation's responsibility to determine there is a public interest before taking any action does not end after the first determination. Instead, it is an ongoing responsibility. The amendment that Mr. Merkley has filed, and which I support, clarifies that it is the Secretary's right to reassess the public interest determination. Additionally, the amendment clarifies that if the EU ETS is amended, if there is an international agreement on aviation emissions, or if a Federal public law is enacted that addresses aviation emissions, that the Secretary will again revisit the public interest determination. Again, I would like to thank the Senator from Oregon for working with me, and I look forward to passage of S. 1956.

Mr. THUNE

Mr. THUNE. That is correct, it has always been my intent, and it is shared by the Congressional Budget Office, and the Secretary of Transportation, who will have the primary responsibility of implementing this legislation. According to the CBO, ``enacting S. 1956 would have no significant impact on the federal budget.'' I ask unanimous consent at this time to have their entire report printed in the Record.

Mr. THUNE. Yes.

Mr. THUNE. Additionally, at a recent Commerce Committee hearing on my bill, Secretary LaHood was asked if any possible action of implementation could ``include the U.S. government paying EU authorities directly or compensating the operators for any fines incurred for non-compliance with EU ETS.'' He responded, ``We have absolutely no intention of asking the U.S. taxpayer to pay any ETS fines incurred for non-compliance with EU ETS, directly or indirectly.'' I appreciate Senator Cardin and Lautenberg for coming forward and working with me to clarify this point, and I thank them both for releasing their hold. I am happy that we have been able to come to a bipartisan agreement on my bill and look forward to final passage today in the Senate and hopefully soon by the House of Representatives so we can send a clear message to the EU that ETS is arbitrary, unfair, and a clear violation of international law.

Mr. THUNE

Mr. THUNE. Mr. President, today I wish to recognize Paige McPherson of Sturgis, SD, who earned a bronze medal in Taekwondo at the 2012 Olympic Games in London, England, this summer. Despite facing the popular British world champion in the first round of competition in London, Paige fought her way to the bronze medal in the women's 67- kilogram division. Paige possesses an outstanding record of success in Taekwondo, beginning at a young age and, most recently, as a silver medalist at the 2011 Pan American Games. She was also a successful member of the U.S. National Team in 2009, 2010, and 2011. Growing up in Sturgis, Paige pursued excellence in many areas. Paige is a passionate dancer and an active member of her church, pursuits which, along with her family and friends, helped her accomplish the amazing feat of earning an Olympic medal. She graduated from Black Hills Classical Christian Academy in 2009, at which point she was already nationally recognized in Taekwondo, and went on to attend Miami-Dade College in Miami, FL. Some of her most notable awards include 2007 Outstanding Female Athlete at the Senior National Championships, 2008 Chris Canning Award of Excellence Winner, and 2009 Outstanding Female Athlete at the USAT National Championships. Paige should be extremely proud of her remarkable accomplishments. I am more than happy to extend my congratulations on her Olympic medal and to offer congratulations on behalf of the State of South Dakota. We are extremely proud and wish her continued success in the years to come.

Mr. THUNE

Mr. THUNE. Mr. President, there is no question that the premier issue for most Americans is jobs and the economy. It is the issue that is on the minds of all Americans. They are pocketbook issues that impact middle-class Americans all across the country. For the past 3\1/2\ years, the President and the Democrats here in the Senate have failed to provide the leadership America needs to make a stronger middle class. Middle-class Americans continue to face a bleak economic picture on this President's watch. We have seen gas prices more than double--the highest level in September that we have ever seen for the month of September. Middle-class income is down by nearly $4,000 since the President took office. Just last week, a Kaiser Family Foundation study came out indicating worker health insurance costs have increased by 29 percent since the President took office. The President promised to lower health care costs by $2,500 per family. Instead, average family premiums have increased by over $3,000 since he took office. Republicans have solutions to grow the economy and to help the middle class, strengthen the middle class. We support commonsense solutions such as increasing domestic energy, reforming our Tax Code, and stopping the job-killing regulations that are killing our small businesses. We hope to have the opportunity to work on those solutions for America's future.

Mr. THUNE

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

Mr. THUNE. Mr. President, the Senate is sort of wrapping up its business, if you will, until after the election. It is ironic, in a way, that there are so many big issues in front of us as a nation--so many challenges--yet we are talking about things I am sure are important, but, once again, we are punting, kicking the can down the road on all the big crises in front of us as a nation. I have to say that never before has a President and a Senate done so little when the Nation's challenges are so great. People have talked about the fiscal cliff repeatedly, and people have talked about the fiscal crisis in which we find ourselves in terms that I think ought to frighten all Americans. It certainly ought to frighten Members of Congress when we talk about the most predictable crisis in American history, probably in human history. It is not like it is any surprise what is going to happen. We are repeatedly reminded by all of the experts that if we don't deal with this issue of the fiscal cliff, it will have devastating, catastrophic impacts on our economy, on our national security, on our country, and on the American people. Yet we are not addressing it and doing what we should be doing to avert the disaster ahead of us, the fiscal cliff that faces us on January 1 of this next year. It is not as though there isn't already a lot of evidence that we have big problems. We just crossed the $16 trillion level in terms of our debt. We have added over $1 trillion of debt every single year now for the past 4 years, since President Obama has taken office. That is $50,000 for every man, woman, and child in America. Everybody in America--man, woman, or child--now has $50,000 as their share of Federal debt. So it is a fiscal crisis unlike anything we have seen before, and it has, as I said, been predicted. The Congressional Budget Office has said if we don't deal with the fiscal cliff, it will plunge the economy into recession. They have suggested that it will reduce by 2.9 percent the size of the economy. We actually will have a contraction of the economy in the first 6 months of next year. They have also projected it will drive unemployment above 9 percent. Granted, we are over 8 percent today. We have been at 8 percent now for 43 consecutive months. That is the longest stretch in history. In fact, if we go back to the time the Bureau of Labor Statistics started keeping unemployment data and we add up the data for the 11 Presidents from Harry Truman through the end of the George W. Bush administration--about 60 years--there were 39 months where the unemployment rate exceeded 8 percent. That is 11 Presidents in about 60 years of history where we have had unemployment above 8 percent. We have now had unemployment above 8 percent for 43 consecutive months. So 39 months in the first 60 years since they started keeping data, and 43 months now in a row under the current administration. We have the Federal Reserve telling us if we don't deal with our fiscal crisis, the economy is going to soften next year. We have ratings agencies such as Moody's suggesting that if we don't have a plan in place not only to deal with the sequestration that is going to occur at the end of the year in a way that is paid for but also to deal with the longer, structural problem--the debt and deficits crisis we have in this country--we are facing a downgrade in our credit rating. You had the World Economic Forum come out just recently with their assessment about the world's most competitive economies. Back in January of 2009 when President Obama took office, the World Economic Forum found that the United States had the No. 1 most competitive economy in the world. In terms of global competitiveness, the United States was ranked No. 1. Now we have dropped. We had dropped to fifth, and this year, just recently, as I mentioned, when they came out with their current rankings, the United States had dropped down to seventh. So in a short 4-year timespan, we have gone from first in terms of global competitiveness down to seventh. That does not speak well for the steps that are being taken here in this country to make America competitive in the global economy, to deal with the problems of spending and debt and the fiscal cliff that is ahead of us. It is interesting to note that at the World Economic Forum--what did they point to in terms of their analysis? Why did they come to the conclusion that the United States had fallen from first in January of 2009 when the President took office to seventh here this year? Well, they pointed out spending, debt, taxes, regulations, redtape--all the things that come from Washington, DC; all the things that are controlled by policies here in Washington; the regulations that continue to spin out of various government agencies that drive up the cost of doing business in this country, that make us less competitive; the higher taxes that are being assessed on our economy in so many different ways; and, of course, all the taxes that are going to take hold, take effect as part of ObamaCare, the health care law that was passed a couple years ago, that begin to kick in. So you are going to have higher taxes. You have the redtape associated with doing business in this country and the bureaucracies, the mandates, the requirements that are imposed on our small businesses and our job creators. And then, of course, as I said, you have this massive amount of debt that hangs like a cloud over our economy. These are all factors that contribute to this assessment that has basically downgraded the United States from the No. 1 position in terms of global competitiveness to No. 7. So the question before the house is, What can we do? What should we be doing to avert that crisis? Well, it strikes me, at least, that it starts with having a plan and working together, having the President step forward with a plan that would make sure our economy does not go into a recession next year; that makes sure the defense cuts that would occur under the sequester--which are terribly disproportionate relative to the size of the defense budget as a percentage of our total budget-- do not harm our national security interests; figure out ways to solve that problem; reduce spending in other areas to redistribute the cuts. Defense represents only 20 percent of the entire budget, but it gets 50 percent of the cuts under this across-the-board sequester that would take effect on January 1 of next year. Our national security experts and our military leadership have said that if these cuts take effect, we will have the smallest Army since the beginning of World War II. You have to go back to 1940 to find a time when we would have had an Army that is that small. You have to go back to 1915, before World War I, to find a time when we would have had a Navy that is as small as it will be if these cuts take effect in the number of ships we have at our disposal. And we would have the smallest Air Force, literally, in the history of the Air Force. That is what our military leadership is telling us will happen if these devastating cuts take effect. You have had the Secretary of Defense, Leon Panetta, the President's own Secretary, say that this would be catastrophic, that these cuts would be disastrous. You have the service chiefs saying the very same thing. So we have all this right in front of us, staring us in the face, and instead of dealing with that crisis we are putting bills on the floor that really do not have near the consequence--as I said, I am sure important; I am not denigrating at all any of the legislation the Senate is considering, but it seems to be right now geared a lot more toward the election than it is about saving the country and doing the things that are necessary to avoid this cliff that is ahead of us and all the disastrous consequences that come with it. Now, just again, a point of fact, and I mentioned this before. We have had now 43 months of 8 percent unemployment or above. We have 23 million Americans who are either unemployed or underemployed. We have seen that the data continues to suggest how sluggish our economy is, the impact it is having on the middle class in this country. In fact, middle-class Americans are continually hit by continued bad news. You start with the fact that since President Obama took office, average incomes have gone down almost $4,000. Added on top of that is the fact that fuel prices have literally doubled in that timeframe--now more than doubled. In fact, we hit, in the month of September--this month--the highest fuel prices ever for the month of September. That is a cost that is borne by middle-class Americans. One of the biggest costs, biggest expenses in their lives is dealing with getting their kids to and from school, getting to work, taking care of the day-to-day activities for which they are responsible. The cost of fuel is a very important pocketbook issue for middle-class Americans. Then you have news the Kaiser Foundation came out with that says health care premiums have gone up by 29 percent. That is despite all the assertions when ObamaCare was being debated that it would drive health care costs down. In fact, the President, as he campaigned for office 4 years ago, talked about bringing the premium for an average family down by $2,500. Well, the opposite has happened. According to the Kaiser Foundation, health insurance costs have gone up by 29 percent. Instead of coming down by $2,500 for the average family, they have gone up by over $3,000 for the average family. So whether it is health care costs, fuel costs, tuition costs, which, by the way, have gone up by 25 percent, or average incomes that have gone down, you see this worsening picture for average Americans. All of that will be dramatically complicated by what is going to happen on January 1 if we do not take action to avert that crisis. What happens on January 1? As I mentioned, you have an across-the- board cut. It is across the board in the sense that everything gets hit, but not everything gets hit proportionately. Defense, as I said, gets 50 percent of the cuts although it represents only 20 percent of the budget. You are going to have all these cuts that take effect that hurt the national security budget and the jobs that go with that, but you also have taxes going up. Tax rates go up on January 1, which will absolutely devastate job creation in this country if they are allowed to take effect. In fact, the total amount of tax increases that will hit us on January 1, if Congress does not take action, over a 10- year period is about $5 trillion--about $5 trillion over a 10-year period in additional taxes. Even if you say, as the President does, that you want taxes to go up just on people who make more than $200,000 a year or couples who make more than $250,000 a year, you are harming almost 1 million small businesses--the very people we are looking to to create the jobs to get the economy moving again--almost 1 million small businesses that file income tax returns. They are passthrough entities or flowthrough entities organized as subchapter S corporations or LLCs; therefore, they file their business income on their individual tax returns. And they would see their taxes go up--almost 1 million small businesses that represent 25 percent of the workforce, hire 25 percent of the workforce in this country. So that is a huge tax increase that is facing job creators in this country come January 1 of next year. These are things on which the House, the Senate, and the President of the United States ought to be focused. Yet we are not getting that focus. In fact, it is hard to get even information from the President of the United States about how he would implement the sequestration proposal. We had passed legislation earlier this summer which he signed into law in August which required him to submit to the Congress a proposal for how he would implement sequestration. We finally, after a delay--he missed the deadline--received that last week, but, again, it lacks specificity, it lacks detail. Congress asked to have that on program, project specific areas, and we did not get that. So as a consequence, again, we are still operating without the information that is necessary to do something to replace that sequestration. I have to say that the House of Representatives has attempted--they passed in their budget--in the subsequent reconciliation bill that went with it--a replacement for this sequestration so that we would not have this $\1/2\ trillion cut in our national security budget and all the attendant problems and risks that come with that. Yet that was not picked up, that was not acted on here in the Senate. So, unfortunately, we are where we are, which is we are going into the election season now. We have not dealt with the across-the-board cuts, the sequestration. We have not dealt with the issue of taxes going up on January 1 on the people who create jobs in this country. For that reason, we have all these analysts--independents analysts, government analysts--concluding the same thing; that is, we are headed for a train wreck. That is what we ought to be focused on right now. Frankly, that is not going to happen unless we get some leadership from the President of the United States. We have to have the President engaged, involved in these discussions if we are going to try to solve this problem. I would hope the leadership here in the Senate would be a partner to that as well. I know there are Republicans here who have tried to get votes on ways to replace the sequestration or come up with a substitute for the defense cuts that it includes. We have tried and actually gotten some votes on actually extending the tax rates at the end of the year, but that was voted down here. But the Democratic leadership in the Senate has to be a party to discussions, as does the President of the United States, in order for us to do what is necessary to avert what we know is going to be a calamity come January 1 unless we change course. As we begin to conclude this particular session of the Senate--I see that my colleague, the Senator from Wyoming, Mr. Barrasso, who is a physician, a doctor, is here. I know he has spoken at great length about the impact of many of the policies that are coming out of Washington on our small businesses, on our middle class, and I certainly would want to give him an opportunity to make some observations about that as well. But I want to conclude by saying I hope that before this catastrophe hits us, we have the foresight and the willingness and the courage to take on these big issues. You cannot solve big issues in this city without leadership. It is going to take leadership from the President of the United States. It is going to take leadership in the Senate. As I stand here today, we have not seen that. We have not passed a budget in 3 years. We have not dealt with any of the long-term problems that are posed and raised by the fiscal cliff that hits us on January 1 of next year. I hope that changes. I hope to see that leadership. And I hope we can get this country back on track. Mr. President, I yield the floor.

Mr. THUNE

Mr. THUNE. Mr. President, today I wish to recognize the 200th Anniversary of the reported death of Sacagawea within the borders of what is now South Dakota. At this time I would like to commemorate her for her contributions to the Lewis and Clark Expedition. Sacagawea accompanied Meriwether Lewis and William Clark on the Northwestern Discovery Expedition to the Pacific Coast for the U.S. President Thomas Jefferson's Corps. In recognition of her service and bravery, the Central South Dakota Chapter of the Lewis and Clark Trail Heritage Foundation, known as Keepers of the Story, Stewards of the Trail, are hosting a regional meeting September 28, 29, and 30, 2012. The meeting will be open to the public in the cities of Fort Pierre, Pierre, Mobridge, and Kenel, SD. To help commemorate the bicentennial of the reported death of Sacagawea, the Lewis and Clark Trail Heritage Foundation will travel to Fort Manuel Lisa. The story of Sacagawea, while short, is one of great success and worthy of remembrance. Her guidance and interpretation were vital to Lewis and Clark's journey. I hope my fellow colleagues will help me commemorate the 200th anniversary of the reported death of Sacagawea by recognizing her sacrifice and efforts.

Mr. THUNE

Mr. THUNE. Mr. President, I ask unanimous consent that I be allowed to speak as if in morning business.

Mr. THUNE. Mr. President, all week my Democratic colleagues in the Senate have been coming to the floor and using scare tactics and demagoguery on the so-called Ryan budget. Of course, what they are referring to is the budget that was passed by the House of Representatives months ago. I suppose it is fair anytime someone produces something to have that criticized, critiqued, scrutinized, looked at, and discussed. But at the same time it seems if someone is going to attack the product that somebody else had put forward the natural follow-up question would be: So what are you proposing? Where is your budget proposal? I think it begs the question on behalf of the American people that the Democrats in the Senate who want to attack the House-passed budget haven't produced a budget of their own. It has been over 1,200 days--1,232 to be precise--that we have not considered a budget in the Senate. For those who are trying to do that arithmetic in their minds right now, that is 3 years and 4 months--3 years and 4 months without a budget in the U.S. Senate. That, at the same time that we continue to get bad news about the economy. This week we received news that Moody's intends, if we end up going over the fiscal cliff next year, to downgrade America's credit rating. That would follow with other credit rating agencies that have already made that assumption about the American economy and the American fiscal situation. We also received notice last week that the World Economic Forum had downgraded America's global competitiveness. When President Obama took office in January 2009, America was ranked first in the world when it comes to global competitiveness. We dropped down to fourth or fifth in the last year or two. But just in the last couple of weeks, the World Economic Forum has dropped the United States even further. We are now seventh in the world when it comes to global competitiveness. The reasons they cite for that are many, but it comes back to the basic issues of spending and debt and taxes and regulations and redtape and the cost of doing business in this country. It seems as though the Democratic solution is to tax more so we can spend more. Raise taxes to grow government. That seems to be the only solution the other side is willing to put forward. Now, when I say that is the only solution, that is what we hear coming out of the White House in terms of the so-called fiscal cliff and in terms of the response to dealing with the sequester: Well, we could do away with the sequester if we just had more revenues. If Washington could just raise more money--more tax revenues--from the American people, this problem would all go away. But what it misses is the fact that the real issue in Washington, DC, isn't that we tax too little; it is that we spend too much. Washington has a spending problem that needs to be corrected. At least the House of Representatives put forward a budget plan that addressed the fundamental problems that plague our Nation's fiscal situation. You look at what we are facing in terms of obligations, liabilities, responsibilities in the years in the future--Medicare, Social Security, Medicaid, other programs--they continue to grow at two or three times the rate of inflation. That is not sustainable. That is going to lead us to bankruptcy. We are on an unsustainable fiscal path. The trajectory we are on today cannot be sustained over time. Yet we have not seen any proposal put forward by the Democrats here in the Senate-- not just for this last year but the year before that and the year before that. It has been 3 years and 4 months now since the Democrats in the Senate have put a budget on the floor that we would have an opportunity to vote on and to give the American people at least an idea about where we want to lead this country. So when they come down here, hour after hour, day after day, night after night, attacking the House-passed budget, I think the American people have to say to the Democrats here in the Senate: Where is your plan? Where is your budget? Show us what you would do. Show us how you would address the fiscal crisis we are facing. The answer is, there is none, it is nada, it is zero. There is not one, no budget, no plan, not this year or the year before or the year before that. For 3 years and 4 months now there has not been a budget put on the floor of the Senate for us to vote on, for us to discuss, for us to have any kind of conversation about the future of this country and what we are going to do to address the fiscal crisis that we all acknowledge exists. This is the most predictable crisis, as has been pointed out, in American history. We all know where we are headed. You can look at the numbers. It is not complicated. It is not rocket science. It is simply a function of math and the math is working against us, and every day we wait it becomes more complicated, difficult, and problematic, I believe, for us to solve this problem, and it further threatens the future and puts at risk our children and grandchildren and the quality of life and the standard of living they are going to experience and enjoy in their lifetimes. When the ratings agencies such as Moody's come out and say that this fiscal cliff, if we go over it, means a downgrade in the credit rating of the United States, when you have organizations such as the World Economic Forum say that the United States is now seventh when it comes to global competitiveness as opposed to first--which is where it was when the President took office--we all should take notice. It is another flashing light, another warning sign, another red flag, if you will, that things are not well in the United States of America. Yet the only proposal that has been put forward that would address that is the budget passed by the House of Representatives. Why? Because the U.S. Senate again has not passed a budget. We have not produced a budget now for over 3 years. It is interesting because one of my Democratic colleagues who was down here talking earlier this week described the budget as a set of values; in attacking the House-passed budget, that somehow the House- passed budget represented the wrong values. It did not represent, somehow, American values. If the budget represents a set of values, what does it mean, then, when you do not have one? If you do not have a budget, what does that say about your values? It seems to me, at least, that at least the House of Representatives, to their credit, has put forward a proposal that, whether or not you agree with it, does address the fundamental problems we have as a Nation; that is, out-of-control Federal spending, a trajectory with regard to entitlement programs that literally will bankrupt the country, and a Tax Code that is overly complicated that needs to be reformed. Those were all addressed in the House budget. A lot of people attacked the whole idea in the House budget with regard to Medicare reform, which is referred to as premium support. Premium support is not a new idea. It is something that was popularized by liberal think tanks years ago. In fact, this year the House-proposed idea, when it comes to premium support, was something advanced by Representative Paul Ryan and Senator Wyden here in the U.S. Senate. It was a bipartisan idea. It was also something advocated by the Rivlin-Domenici task force that looked at our fiscal situation, made recommendations, and when it came to the notion of how to reform Medicare, premium support was something that was put forward as something that could be a new idea that can save the government--the taxpayers--money, introduce competition in the same way that the Medicare Part D Program has introduced competition and actually saved money over what it was proposed to cost. It is not a new idea. It is an idea that has been tried. When Medicare Part D was adopted, the premium support concept was included as part of that and you can see the results of that have led to lower costs, much lower costs than were predicted. Frankly, that is, I believe, because it introduced the element of competition into the whole way we deliver health care services under Medicare. That was something that was proposed and built upon, developed as part of the budget that was passed in the House of Representatives. But, again, it is something that is not new around here. It has had lots of support in the past from Democrats. It seems to me at least that if we know what we have today is not working, we ought to be willing to at least entertain a discussion and conversation about some ideas that might actually solve the problem and might work. Yet here in the Senate for 3 years we have not had a budget. Some would argue that the President of the United States has put forward a budget. In fact, as a matter of I guess delivering a set of papers to the Congress, he did do that. But I would argue and I think most would agree it was not a serious effort. It certainly was not a meaningful attempt to address the issue of spending and debt or entitlement reform and that was evidenced by the fact that when it was put on the floor in the Senate to be voted on, it was defeated by a vote of 97 to 0. In the previous year the House of Representatives had a vote on the President's budget. That year it was voted down in the House by something like 419 or 420 to 0. The President's budget for 2 consecutive years here in the Senate has not received one vote from any Democrat in either the House or the Senate. That should speak volumes about the President's attempt to do this. I think what it suggests is it was not serious, it did not make a real effort at trying to address the issues of spending and debt and getting the economy growing again and reforming our Tax Code and driving down the cost of doing business in this country instead of increasing the costs, which is something that seems to be happening every single day. As I travel across my State of South Dakota and listen to businesses from other parts of the country, I hear over and over again that the cost of doing business is making us uncompetitive. We continue to be saddled with regulations, with requirements, with mandates, with taxes. Those sorts of things, the redtape of doing business, are making it incredibly difficult for our small businesses and job creators to get this economy back on its feet and get it growing again. I would simply say in response to the attacks that have been leveled by my colleagues on the other side on the proposal that was advanced and put forward by the House Republicans, that it would bode well if you want to have a debate about priorities, if you want to have a debate about values and if you want to have a debate about budgets, to have one. It starts with a budget. We don't have one. We do not have any plan for how we are going to deal with the very factors, the very elements that led organizations such as Moody's and the World Economic Forum to determine that the United States credit rating is in jeopardy and that our global competitiveness has dropped from first in the world to seventh. Those are things I think we ought to be talking about, and you cannot start talking about those things unless you have a plan, unless you have a budget that describes what you would do to address the drivers of Federal spending, the drivers of Federal debt. Again I cannot emphasize this enough: the only thing I hear coming out of my colleagues on the other side to address it is we need more revenues. We need to raise more taxes. We don't have enough revenue. If we could raise more revenue we could solve all those problems. I say to my colleagues what we have here in Washington, DC, is not a revenue issue, we have a spending problem. Washington does not tax too little, it spends too much. That is why we need to get spending under control, but it starts with the budget. I think it behooves our colleagues on the other side, as they come down here day after day and berate and attack and suggest somehow that the budget that was passed by the House of Representatives is not representative of American values, to come down here with something of their own that might lay out a plan that actually does address Medicare reform, Medicaid reform, tax reform--the things that we know have to be dealt with in the future if we are going to hand a better and more prosperous and stronger Nation to our children and our grandchildren. That simply has not happened. They can come down here and say what they want, but when there is no budget, there is no blueprint, there is no plan, then there is no path forward that addresses these difficult, complicated challenges and problems that face us and face our Nation in the future. I hope we eventually see that. I hope the President will come to the table and that we can sit down and talk about how we are going to solve the fiscal cliff we are headed over at the end of this year. Again, it is not just the credit rating, it is not just global competitiveness, it is the American economy that is at stake as well. The Congressional Budget Office has said if we go over this fiscal cliff where taxes go up on January 1, where these disproportionate cuts take effect on the military budget, we are looking at an economic recession next year, a contraction of the economy of 2.9 percent and unemployment above 9 percent. This is about America's standing, about our competitiveness, and it is about jobs in the economy, fundamentally. It is high time that we had help and cooperation and an idea, perhaps, from the other side about how they would solve these problems. I hope we will get that. I yield the floor.

Mr. THUNE. Mr. President, I yield back the remainder of our time.

Mr. THUNE. On that point, it looks as if what they are doing is running out the clock, doesn't it? They have a requirement by September 6--last week--to produce at least their proposal. It is by law. We passed it. He signed it into law back in August. It was required last week, and we haven't seen it yet. It looks to me what they are doing is trying to run the clock out, hoping Congress is going to go home to campaign and they will not have had to do anything to deal with this-- until the lameduck, at which point they can use defense cuts as leverage to try to get tax increases. It is pretty plain what is going on here. But they have a requirement under the law to produce that. They haven't done it. The Senator from Alabama and I were authors of that legislation. The Senator from New Hampshire has been a great leader in trying to get the administration to put their proposal for implementation in front of us. That hasn't happened. That is, I think, the only conclusion anybody can draw.

Mr. THUNE. Right, and it passed months ago. We all talk about the jobs impact, the Warren Act notices that are going to go out, and all the uncertainty created by not knowing what the impact of this is going to be, but the House of Representatives passed a budget months ago which spelled out in clear detail how they would avoid these Draconian cuts to the national security budget, replaced them with alternatives by finding reductions in spending in other areas of the budget, and put a budget out that actually accomplished that objective and avoided what we all know is going to be a disaster and a train wreck at the end of the year. So what happens? The Senate--the world's greatest deliberative body-- doesn't pass a budget for the third year in a row. Here we are, at the eleventh hour, less than 4 months away from when this would take effect, with defense contractors sending out pink slips to employees in the very near future, and the Senate has done nothing to avoid what we know is a very predictable crisis. Everybody knows this is coming. The Congressional Budget Office is predicting it, the Federal Reserve is predicting it, outside analysts are predicting it. Everybody knows the combination of tax increases on January 1 and the dramatic cuts in the Defense Department are going to take the country into a place economically that we don't want to go. In most cases, according to the CBO, they have said it is going to take us back into a recession. They are predicting a 2.9-percent contraction in the economy in the first 6 months of next year and unemployment over 9 percent. It is not as though we don't see this coming. Yet here we are, as Senator McCain pointed out, talking about small-ball stuff. We are doing things that in somebody's opinion I am sure is important, but we know we have a disaster looking us right in the eye, and we aren't doing anything to address it. Again, it all starts with the failure by this institution, the Senate--the world's greatest deliberative body--not able to pass a budget, its most fundamental responsibility. The ranking member of the Budget Committee, the Senator from Alabama, knows full well. The Senator from New Hampshire is also a member of that committee. I am not sure why our committee exists if we aren't going to pass a budget, but we haven't done it now under the Democratic leadership here in the United States for 3 consecutive years.

Mr. THUNE. If the Senator from Alabama will yield on that, I think it is important again to point out this could be avoided. Actually, the House of Representatives passed a budget trying to avoid it. They addressed this in their budget. They restricted these reductions, did away with the 50 percent whack the Defense Department would get, which is disproportionate relative to their share of the budget. Defense represents 20 percent or about one-sixth of the budget, as the Senator from Alabama pointed out, but it gets 50 percent of the cuts. But the House of Representatives passed a budget that the Democrats have been down here attacking for the last couple days--the ``Ryan'' budget or the House-passed budget. At least they had a budget. We haven't had a budget for 3 years in the Senate.