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Senate Proceeding on Apr 13th, 2011 :: 8:05:40 to 8:22:25
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Chuck Grassley

8:05:33 to 8:05:53( Edit History Discussion )

Chuck Grassley: quorum call: of the quorum mr. grassley: i ask that the calling of the quorum be suspended. the presiding officer: without objection, so ordered. mr. grassley: i suppose i and a lot of my colleagues had a chance to hear the president speak this afternoon it's very nice that the president is being

Chuck Grassley

8:05:40 to 8:22:25( Edit History Discussion )
Speech By: Chuck Grassley

Chuck Grassley

8:05:54 to 8:06:14( Edit History Discussion )

Chuck Grassley: engaged for the first time in the budget debate and the long-term fiscal problems of this country and the deficit problems of this country. it's good that he is following on with some of the recommendations of his own deficit reduction commission. you have to remember a little

Chuck Grassley

8:06:15 to 8:06:38( Edit History Discussion )

Chuck Grassley: less than a year ago he appointed a deficit reduction commission. they reported on december the 5th. it seems that they had broad bipartisan support because the four senators that were on there, two democrats and two republicans and probably very different political philosophies

Chuck Grassley

8:06:39 to 8:06:59( Edit History Discussion )

Chuck Grassley: of the two of the four, they have endorsed it. and then all of a sudden since december 5th until today there's just been a lot of quiet on the part of the president of the united states about whether or not he likes what his deficit reduction commission suggested.

Chuck Grassley

8:07:00 to 8:07:21( Edit History Discussion )

Chuck Grassley: and i don't know the details of his -- where he's coming from, whether he agrees with every detail that's in the deficit reduction commission recommendations, but at least he is getting on board along the lines of what 64 senators, 32 republicans and 32 democrats

Chuck Grassley

8:07:22 to 8:07:43( Edit History Discussion )

Chuck Grassley: said in the letter about a month ago to the president, we're ready to start tackling some of these big problems. we need leadership. and maybe this speech today is an answer to that leadership or if i want to be cynical maybe the president gave his speech today because of the very positive comments that

Chuck Grassley

8:07:44 to 8:08:04( Edit History Discussion )

Chuck Grassley: congressman and chairman paul ryan got for his budget ideas that he released last week. but the president also took advantage to renew the class warfare, the demagoguery of -- of taxing the wealthy.

Chuck Grassley

8:08:05 to 8:08:25( Edit History Discussion )

Chuck Grassley: that doesn't contribute much to the debate. in fact, i think it makes it difficult to bring people together. or if i want to be cynical i might say this is the president's first speech about his reelection. either way, i think there's

Chuck Grassley

8:08:26 to 8:08:46( Edit History Discussion )

Chuck Grassley: analysis of this that we've got look at very carefully and see does it really do the economic good that is intended in the speech even though it's welcomed that the president is being engaged at this time. so i would give some reaction to some of the things that the president said, but i want this as background.

Chuck Grassley

8:08:47 to 8:09:08( Edit History Discussion )

Chuck Grassley: from world war ii through 2009 every dollar of new federal tax revenue coming into this treasury resulted in $1.17 of new spending. now just think of that. every new dollar coming in wasn't a dollar that reduced the deficit.

Chuck Grassley

8:09:09 to 8:09:30( Edit History Discussion )

Chuck Grassley: it was a dollar that resulted in in $1.17 of additional spending. that's like a dog chasing its tail and never catches it. and so we are sending a new dollar to washington to do something about the budget deficit and nothing really happens as a result of that. -- of that except more deficit.

Chuck Grassley

8:09:31 to 8:09:52( Edit History Discussion )

Chuck Grassley: the president made the point that tax reductions in 2001 and 2003 added tremendously to the deficit that he inherited or part of the deficit that now exists.

Chuck Grassley

8:09:53 to 8:10:13( Edit History Discussion )

Chuck Grassley: but, in fact, the tax reductions of 2001 and 2003 resulted in more revenue to the federal treasury. the expanding economy spurred by this tax relief act of 2001 and 2003 helped to reduce the annual

Chuck Grassley

8:10:14 to 8:10:34( Edit History Discussion )

Chuck Grassley: budget deficit from $412 billion in 2004 to $160 billion in 2007. not because we taxed more, but because we taxed less and we had more economic activity as a result of it. which brings me around to the principle of deficit reduction.

Chuck Grassley

8:10:35 to 8:10:57( Edit History Discussion )

Chuck Grassley: obviously when i use the word that a dollar of additional taxes doesn't go to the bottom line, that -- that doesn't do anything about the deficit. but on the expenditure side reducing that and the economic growth that comes from it is what reduces the deficit.

Chuck Grassley

8:10:58 to 8:11:18( Edit History Discussion )

Chuck Grassley: more economic activity. event most sincere arguments that raising taxes would reduce the deficit and the debt doesn't have history to back it up. outside of washington it's obvious to people that the problem isn't what -- isn't that people are undertaxed, but

Chuck Grassley

8:11:19 to 8:11:39( Edit History Discussion )

Chuck Grassley: washington overspends. the voters said this so loud and clear in the and elections are supposed to have consequences. and i of midnight friday night is evidence of words from the

Chuck Grassley

8:11:40 to 8:12:01( Edit History Discussion )

Chuck Grassley: grassroots of america getting through to washingt which i think most people at the grassroots were cynical would ever happen and i suppose we've got to do a lot more to prove to them that there might be a different day in washington. but it was pretty loud and clear in the last election and the message sent to washington.

Chuck Grassley

8:12:02 to 8:12:22( Edit History Discussion )

Chuck Grassley: government spending increased by 22% during the last two years, an unsustainable level of increased expenditures. if we follow the budget proposed this year by president obama, we would ha another $13 trillion to our national debt over the next decade. this decade -- this debt gets in

Chuck Grassley

8:12:23 to 8:12:46( Edit History Discussion )

Chuck Grassley: the way of economic activity that creates jobs and it's a terrible burden to leave to future generations. we talked dollars an cents -- and cents when we talk about the deficit and the debt. but it's a moral issue of whether or not those of us of our generation ought to live

Chuck Grassley

8:12:47 to 8:13:08( Edit History Discussion )

Chuck Grassley: high on the hog and leave the -- the bill to young people like these pages here that have to pick up for it. it's -- it's a moral issue as much as it is an economic issue. this trillions of dollars of debt gets in the way of the economic activity that creates

Chuck Grassley

8:13:09 to 8:13:29( Edit History Discussion )

Chuck Grassley: jobs and it's a terrible burden on future generations. washington needs to get behind policies that clamp down on spending and as a result we will grow the economy. increased economic activity increases revenue to the federal treasury enabling deficit and debt reduction.

Chuck Grassley

8:13:30 to 8:13:51( Edit History Discussion )

Chuck Grassley: and we know that from a fact because from 1997 until the year 2000, we actually, because of the growth of the economy, paid down $500 -- i believe was $568 billion on the national debt during that period of time. the answer is not defending ways to grow government.

Chuck Grassley

8:13:52 to 8:14:14( Edit History Discussion )

Chuck Grassley: grow the economy, but you don't grow the economy by growing government. getting back to the issue of the president making a big deal in his speech about the 2001 tax cuts being a major cause of the

Chuck Grassley

8:14:15 to 8:14:37( Edit History Discussion )

Chuck Grassley: budget deficit and probably the implication of the unfairness of it because there wasn't higher taxes on higher-income people, i would suggest that the president is wrong in both regards. in 2001 tax cuts included an across the board income tax reduction and reduced the tax

Chuck Grassley

8:14:38 to 8:15:00( Edit History Discussion )

Chuck Grassley: rates on the lowest income people from 15% to 10%. and -- and it resulted in removing millions of low-income people from the federal income tax rolls entirely. it increased the child tax credit from $500 to $1,000. the legislation included

Chuck Grassley

8:15:01 to 8:15:22( Edit History Discussion )

Chuck Grassley: marriage penalty relief and the first ever tax deduction for tuition. two years later, after 9/11, the 2003 dividends and capital gains tax rate cuts spurred economic growth and created jobs. the result was more revenue to

Chuck Grassley

8:15:23 to 8:15:43( Edit History Discussion )

Chuck Grassley: the federal treasury, not less. the expanding economy helped reduce the annual budget deficit -- and i'm repeating these numbers because they're significant -- from $412 billion in 2005 to $160 billion in 2007. i know it's counterintuitive to

Chuck Grassley

8:15:44 to 8:16:04( Edit History Discussion )

Chuck Grassley: a lot of people to hear a member of the senate say you reduce marginal tax rates, you're going to bring revenue into the federal treasury, because the obvious common sense tells people that if you increase taxes, you're going to bring in more revenue, but as i said earlier in a speech today, it

Chuck Grassley

8:16:05 to 8:16:28( Edit History Discussion )

Chuck Grassley: doesn't work out that way because there's some people in this country can decide, you know, i'm paid enough taxes, i'm not going to pay anymore. so they are disincentivizeed to be productive.

Chuck Grassley

8:16:29 to 8:16:49( Edit History Discussion )

Chuck Grassley: probably do leash -- leisure or invest in nonproductive activity. and your lower marginal tax rates, it encourages those people to be productive and away from being productive, at the same time creating jobs, growing the economy, bringing more money into the federal treasury. when you look at the sources of the deficit, contrary to the

Chuck Grassley

8:16:50 to 8:17:11( Edit History Discussion )

Chuck Grassley: president's claims, tax relief has been a small part. unprecedented spending contributed much more to the deficit than the tax relief did, and particularly in the last two years, a 22% increase in expenditures on top of the

Chuck Grassley

8:17:12 to 8:17:33( Edit History Discussion )

Chuck Grassley: the $814 billion deficit -- i mean $814 billion stimulus. now here's something that's probably counterintuitive as well and probably something the president -- the president misses from his analysis in 2001

Chuck Grassley

8:17:34 to 8:17:55( Edit History Discussion )

Chuck Grassley: and 2003 tax relief bills that he blames the big budget deficit on. the tax rates, those reductions, actually ended up with taxes being more progressive. the effective federal tax rate on the top 1% of the households is more than seven times the

Chuck Grassley

8:17:56 to 8:18:18( Edit History Discussion )

Chuck Grassley: rate paid by the bottom 20% of the households, and that's up from less than five times as much in the year 1979. if tax relief enacted since 2001 is allowed to expire in a little more than a year and a half, because last december we only extended the existing tax

Chuck Grassley

8:18:19 to 8:18:39( Edit History Discussion )

Chuck Grassley: policies until december 31, 2012, at that time, if that happens, a family of four with two kids who earn $50,000 today would see a $2,155 increase in its tax bill. more than six million low-income people who currently have no federal income tax liability

Chuck Grassley

8:18:40 to 8:19:01( Edit History Discussion )

Chuck Grassley: would be subject to the individual income tax, and that would be at a rate of 15% instead of now 10%. washington needs to learn that leaving more money in the pockets of the taxpayers unleashes a positive chain reaction in our economy.

Chuck Grassley

8:19:02 to 8:19:23( Edit History Discussion )

Chuck Grassley: on the other hand, government spending doesn't create wealth because government is not an institution that can create wealth. government's an institution that can only provide an environment for people outside of the government to create wealth. and, in fact, what the government does is it consumes

Chuck Grassley

8:19:24 to 8:19:45( Edit History Discussion )

Chuck Grassley: wealth, and as a result doesn't generate a stronger economy. instead of growing the government, washington needs to focus on helping create private sector jobs. the president's new plan will reduce the deficit by by $4 trillion over 12 years.

Chuck Grassley

8:19:46 to 8:20:06( Edit History Discussion )

Chuck Grassley: he does that by reducing spending by $2 trillion but raising taxes by $1 trillion. and thus lowering interest payments by $1 trillion. the president again failed to realize that we do not have a revenue problem, we have a spending problem.

Chuck Grassley

8:20:07 to 8:20:28( Edit History Discussion )

Chuck Grassley: now, at least a couple times since i have been in the united states senate, i've heard this argument, well, let's increase taxes $1, and we'll reduce expenditures $2 or $3 or $4. sometimes it's $2, sometimes it's $3, sometimes it's $4 behind those ideas. now, that sounds very good,

Chuck Grassley

8:20:29 to 8:20:50( Edit History Discussion )

Chuck Grassley: doesn't it? but here's why it doesn't work and why bringing in $1 of new taxes actually leads to the spending of $1.17, as professor vedder of ohio university has

Chuck Grassley

8:20:51 to 8:21:14( Edit History Discussion )

Chuck Grassley: studied this, because you increase taxes for a long, long period of time. in fact, you increase taxes until you decide to do something else with the taxes. but appropriations are reviewed annually, and for some reason or other, after that first year, appropriations tend to creep up

Chuck Grassley

8:21:15 to 8:21:35( Edit History Discussion )

Chuck Grassley: and creep up and creep up, and consequently, the well-intentioned of raising taxes $1 and reducing expenditures by $3 or $4, as well intended as it is, you just gradually -- it just gradually is eroding on the expenditures side. that's that half of that

Chuck Grassley

8:21:36 to 8:21:59( Edit History Discussion )

Chuck Grassley: proposition so that you raise -- you end up not reducing expenditures as you had originally indicated. i yield the floor, mr. president, and i suggest the absence of a the presiding officer: the clerk will call the

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