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Udall: Extending Deficit-Busting Tax Cuts for Millionaires and Billionaires is Irresponsible

Posted: Monday, December 13, 2010

Washington, D.C. - Today, U.S. Senator Mark Udall spoke on the U.S. Senate floor before he voted against tax legislation that would extend tax cuts for millionaires and billionaires.  Udall called on his colleagues instead to focus on extending tax breaks for the middle class:

"Just over one week ago, the Democratic and Republican chairmen of President Obama's deficit commission called our national debt a 'cancer' that is threatening our country from within.  They are right.  A massive budget deficit and a crippling national debt are perhaps the most difficult challenges our government faces.  As Coloradans know, our national security depends on our economic security - and each is threatened by skyrocketing debt and irresponsible budgeting," Udall said.

"Days after the most substantive national conversation we've had about addressing the debt, the debate suddenly has turned to extending tax breaks for millionaires and billionaires that - alone - will cost $700 billion over the next decade.  That's $700 billion in additional debt that the United States will owe to China and our other creditors around the world - debt that our children and grandchildren will be forced to pay.  It's a ticking time-bomb that needs to be defused."

"We are suffering from the worst possible case of collective short-term memory loss.  During the past decade, tax cuts for the wealthiest Americans didn't lead to job creation and instead helped cause a skyrocketing deficit.  Why would we believe it will be any different this time around?  As I've said many times, instead of borrowing more money to pay for tax breaks for millionaires and billionaires, we should focus our attention on reducing our national debt, stabilizing Social Security for the long term, and finding common-sense ways to create jobs."

"I voted twice already to extend all of the tax cuts for the middle class, which will spur our economy forward.  I urge my colleagues of both parties, as well as the President, to coalesce around a solution that makes sense for our economy: pass the middle class tax cuts that everyone agrees will help the economy - and avoid piling onto our national debt with unnecessary tax cuts for millionaires and billionaires.  Congress should stay working through the holidays to get that done.  Hardworking Coloradans - who have been tightening their own budget belts - deserve no less."

Please contact Tara Trujillo at (303) 650-7820.

Text of Sen. Udall's speech, as prepared for delivery, is below along with a video link to watch

Click here to watch Mark's speech:

Mr. President, in addition to all of the many challenges facing our nation, a massive budget deficit and a crippling debt may prove to be the most difficult challenge we face as a people.

A deep structural debt, like the one that our government has accumulated, not only threatens our long-term economic stability . . . it also darkens the horizon in a way that discourages investment and innovation that we need to spur American jobs today.

Moreover, our apparent inability to squarely address the problem in a bipartisan way is a signal to the American people - as if they needed more proof -that our democracy is not working.  And that is as dangerous as any attack on our country.

It is a time bomb in our midst - the ticking of which we cannot ignore - unless we are comfortable knowing that it will eventually and inevitably blow up on our children.

Just last week, a bipartisan group appointed by the President confirmed the seriousness of the threat with a different metaphor, but one equally apt.  The President's fiscal commission called our national debt a "cancer" that is threatening our country from within.

Whether a time bomb or a cancer, the threat is real . . . and the commission confirmed it in the starkest possible terms.  The chairmen's recommendations for how to respond were sobering - but in a way, they were also like a strong cup of coffee after a drinking binge.

Americans sat up and listened.  And for a few days between the release of the commission's report and the vote by the full commission the following Friday, it looked like we might be able to set aside the ideological differences that have poisoned our politics and that we could actually address the problem.

It looked like we might finally be able to follow the old adage that when you are in a hole, stop digging.

However, the next week, the President announced a plan that he negotiated with Republican leaders to extend the Bush tax cuts across the board - a plan that would add $900 billion to our national debt over the next two years. 

What's staggering to me is that it took just four days to switch the conversation from reducing the debt to adding to it.

Just four days after the most substantive conversation we've had about addressing the debt, we started arguing about the wisdom of extending tax breaks for millionaires and billionaires that - alone - will cost 700 billion dollars over the next decade.

That's 700 billion dollars in additional debt that the United States will owe to China and our other creditors around the world.

To paraphrase one of my colleagues, I feel like we're operating in some kind of parallel universe.

Now, as the debate over the last several days has exhibited, Senators in this body - and the American people themselves - have a diverse set of views on tax policy and how to get our economy back on track.

Central to these questions about tax policy is how to find mechanisms that will get our skyrocketing national deficit and debt under control.  Despite disagreements on these issues, I believe that we owe it to the American people and to one another to be both pragmatic and truthful about the fiscal challenges confronting us.  It's the way that Coloradans like to operate, and I believe it's the way that most Americans want their elected official to behave.

So I respect and even applaud the President's efforts to reach a compromise based on political pragmatism.

But what I respectfully disagree with is the notion that this compromise is based on anything approaching fiscal realty or truth in accounting -which is the point I believe that the chairmen of the President's fiscal commission -- Erskine Bowles and Alan Simpson -- were making.

Mr. President, I want to remind my colleagues today of the history of the Bush tax cuts for the wealthiest Americans.

Those tax cuts were passed after our country went through one of the strongest economies we saw in generations.

Those who supported the tax cuts for the wealthy believed that because we had reduced our deficits, we could afford them.  They believed those tax cuts would stimulate the economy further and create millions of new jobs.  In the words of Vice President Cheney, it was a time when QUOTE "deficits don't matter" UNQUOTE.

I did not support the tax cuts for the wealthy in 2001 or 2003, for much the same reason I don't support them today.  I voted against them.

In fact, I'll remind this body that the extension of the Bush tax cuts in 2003 was only possible because Republicans pushed them through on a reconciliation vote, which requires only a simple majority.  It took Vice President Cheney to break the tie vote.

Now, I sincerely wish the 2001 and 2003 Bush tax cuts for the richest Americans had effectively spurred sustained job growth.  I do.

Unfortunately, the next decade saw a decline in our economy like we haven't seen since the Great Depression.

Banks failed.  Foreclosures reached a crisis point.  We were forced to bail out financial institutions, an insurance giant, and the auto companies to keep the economy from crashing further.

During that time, real income for average households decreased.  And the unemployment rate nearly doubled as millions of workers were laid off.

If tax cuts for the wealthiest among us were an efficient way to spur innovation and investment, I have to believe that economists would be telling us to continue them.

But here's what they're actually saying:  economists of all stripes are telling us that extending tax cuts for the wealthy is one of the least effective ways to create jobs and build the economy.

Research by the Congressional Budget Office suggests that we could produce three times the economic benefit by taking the money that would be spent on tax cuts for the wealthiest Americans and applying it to toward job creating tax-credits and economic aid to struggling state governments.

Even some of America's most successful businessmen - Bill Gates and Warren Buffett - who are among those who stand to gain dramatically by the bill before us, have urged Congress to prioritize seniors, long-term economic stability and job creation instead.  They know what recent history has shown - that tax cuts for millionaires and billionaires doesn't help our economy - and certainly doesn't help our national debt.

Just over one week ago, I stood here with all of my colleagues and voted to support a proposal that would have followed the advice of economists, Bill Gates and Warren Buffett and extended relief to middle-class families.

Most importantly, that plan would have heeded the overwhelming wishes of Coloradans - and Americans across our country, who do not believe it makes common-sense to extend tax cuts for the rich.  Americans understand, maybe better than many of us in Washington, D.C., that middle-class tax relief is the way to spur our economy.

To a family making $50,000 a year, an $800 tax cut can make the difference between paying for day care, or health insurance, or a second car so that both parents can work.

And as more and more Americans become the first in their families to stand in an unemployment line, I find it hard to explain or justify last week's filibuster preventing middle-class tax relief so that millionaires and billionaires can get an extra six-figure check from the federal government.

We've heard all kinds of arguments for extending tax cuts for the wealthiest Americans.  And we've been told that this bill represents the best deal that we could get in order to bring further tax relief to middle-class Americans.

But again, Mr. President, those arguments are based on political pragmatism . . . and not a truthful or objectively-measured analysis of the actual impact on our budget deficit.

That is why the co-chair of the President's deficit commission - Erskine Bowles - a university president who knows the impact our budget crisis has had on states, on education, and on families - has spoken out against this irresponsible tax "deal" for wealthy Americans.  He said QUOTE "I'm deeply disappointed that we have this short-term deal and it's not linked to long-term fiscal restraint."  UNQUOTE.   I think that hits the nail on the head.

I take no pleasure in opposing most of my colleagues today.  I've long held the view that by working together, we can bridge divides and find solutions that are both pragmatic, collaborative and factually sound.

I regret that the bill before us speaks more to our failure as an institution than it does as an example of effective compromise.  This deal is about politics and a President backed into a terrible corner by a looming deadline when this Congress must adjourn and a new one will take its place.

The bill we're considering today is where the negotiations should have started . . . not where they ended.  We should be voting on a plan that would allow us to extend tax relief for working families and put the $700 billion we would save over a decade toward our deficit, unemployment insurance, tax credits for low-income Americans, and other ways to get our economy growing.

We should be voting on a plan - a compromise negotiated in good faith and based on the realities of our economy and not a date on the calendar - whose economic and fiscal impacts can be verified.

That is what I wish had been negotiated.  And I would prefer to stay here in Washington, through the holidays if necessary, to work out a better deal for the Coloradans I represent, and for the American people.

Mr. President, I sincerely fear that the bad choices made in the last decade will haunt us through the next decade.  For these reasons, the legislation before us today is a step too far, and that is why I oppose it.

I yield the floor.


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