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Senator Byrd

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Remarks by Senator Byrd

March 10, 2004

Time to Look Responsibly at Tax Cuts

Senator Byrd delivered the remarks below after offering an amendment to strike "reconciliation" instructions contained in the Senate Budget Resolution.  Those instructions are for the Finance Committee to report a reconciliation bill that includes $80.6 billion of tax cuts.  By including reconciliation instructions, the Senate will have only twenty hours to debate the tax cuts; there would be no requirement to offset the cost of the tax cuts; and, the Senate could pass the measure with a simple majority (rather than sixty votes). The twenty hour time limit can be further reduced by any amount of time by a majority vote on a non-debatable motion.

 The Byrd amendment would strike the reconciliation instruction.  This is not an amendment about extending the three tax cuts.  This is an amendment that protects the rights of Senators to debate whether or not the tax cuts should result in larger deficits or whether the tax cuts should be paid for.  This amendment does not strike the $80.6 billion of revenue reductions.  The Senate Finance Committee could still produce tax cut legislation that would be considered by the Senate under regular order.

For many years I have been growing increasingly concerned about the Senate as a forum for debate.  Senators, at every turn, seem bent on undermining this institution and the vision our Constitutional Framers embodied in this upper body of the Congress.

The Senate is the only forum in our government where the perfection of laws may be unhurried and where controversial decisions may be hammered out on the anvil of lengthy debate.  It may be slow, it may be unwieldy, it may be frustrating to some, but it is the best means to achieving compromise, to ensuring an informed citizenry, to protecting the rights of the Minority.

To shut out the Minority by limiting the right to debate is to needlessly, and detrimentally, infuse partisanship into the legislative process.  That's exactly what we're seeing in this budget resolution.

Included in the Budget Chairman's resolution are reconciliation instructions to the Finance Committee to report $81 billion in tax cuts to extend the child credit, marriage penalty, and 10 percent bracket expansion that are scheduled to expire this year.

If misused, there is no procedural mechanism in the Senate more contemptuous of debate than the budget reconciliation process.

And it is being misused.  It is a process that has morphed into an annual exercise, where the Majority party takes advantage of the limitations on amendment and debate allowed by the Budget Act to shield controversial legislation from public discussion.

This budget resolution would use reconciliation to circumvent a debate in the Senate about the wisdom of allowing additional tax cuts to deepen the deficit.

I helped to craft the Budget Act in 1974, and I can tell Senators that we never contemplated that reconciliation would be used to shield from debate legislation that spends the Social Security surplus and increases deficits.  We never envisioned these abuses of the process.

Senators regularly express their desire for less partisanship, longing for the days when the Senate accomplished its business without the political acrimony that has marked recent debates.  One reason the Senate avoided such partisanship is because its leaders respected the rights of the minority and allowed the Senate to work its will through open and vigorous debate.

In 1981, Republican Leader Howard Baker had the opportunity to use reconciliation to pass President Reagan's tax cut package.  He chose, instead, to allow the tax cut to be brought before the Senate as a free-standing bill and fully debated.  He said at the time:

"Aside from its salutary impact on the budget, reconciliation also has implications for the Senate as an institution...I believe that including such extraneous provisions in a reconciliation bill would be harmful to the character of the Senate.  It would cause such material to be considered under time and germaneness provisions that impede the full exercise of minority rights." 

For almost twenty years, the Senate exercised restraint with regard to the reconciliation process, and, until 1995, the reconciliation process served as a helpful mechanism for deficit reduction.  But since then, the process has been twisted and contorted by those who find its limitations on debate and amendment too enticing to resist using it to advance a partisan agenda.  The country is the worse for that legislative opportunism.

Today, the White House is projecting deficits at an alarming $521 billion for the Fiscal Year 2004.  To pay for its tax cuts, the Bush Administration is spending every dime of the Social Security surplus -- money that the President and both parties pledged to set aside to save our retirement and disability system.  According to the White House's own numbers, the gross debt just passed the $7 trillion mark on its way to $11 trillion in 2009, and there is no credible plan from this Administration or this Congress to do anything about it.

In response to mounting budget deficit projections, President Ronald Reagan signed into law twelve bills to increase taxes, including legislation to repeal part of his 1981 tax cut.  Similarly, in response to alarming deficit projections in 1990, President Bush's father made the courageous decision to break his "no new taxes" pledge.

State legislatures and governors have been making similar decisions over the past three years in Alaska, Alabama, Connecticut, Idaho, Nebraska, Nevada, and Ohio.  It's what's being debated right now in Richmond, Virginia.  Senator Warner recently and courageously declared:  "Politics be damned.  Let's consider what's best for the men and women...and their families and children."

The debate about budget deficits is taking place all across this country.  Ironically, the one place where debate is discouraged on this matter is right here in the world's greatest deliberative body.

The tax cut reconciliation instructions in this budget resolution would stifle a debate when it is most needed.

After three years of tax cuts and promises of job growth, the country has not reaped the benefits of those promises.  We can tout higher economic growth rates.  We can tout higher productivity.  But none of these statistics mean anything to an unemployed worker.  So far, there seems to be no robust connection between these particular tax cuts and job creation.

Since January 2001, 2.2 million jobs have been lost.  The manufacturing sector has endured 43 straight months of job loss.  Discouraged workers are dropping out of the labor pool at a rate of 100,000 per week.  One million jobs have been lost overseas, and countless workers -- white-collar workers, blue-collar workers -- are worried that their own job may be next. 

The only thing we know for sure at this point is that tax cuts over the past three years have contributed to an explosion in debt.  Just look at page 189 in the "Historical Tables" of the President's budget.  After dropping to a low of $5.6 trillion in the Fiscal Year 2000, the gross federal debt has increased to $5.8 trillion in the Fiscal Year 2001, to $6.2 trillion in the Fiscal Year 2002, to $6.8 trillion in the Fiscal Year 2003, and it will continue to increase to an estimated $10.6 trillion in the Fiscal Year 2009.

It's not just election-year rhetoric.  The IMF, the GAO, the Federal Reserve are all in agreement -- deficits do matter and they are threatening to derail the U.S. economy.  And that's not all.  The deficits also are threatening our ability to save Social Security.

I understand why some would prefer not to engage in a lengthy debate about the explosion in the gross debt.  The American public already is having trouble understanding why the Congress should enact the $1.2 trillion in new tax cuts included in the President's budget before we have even figured out how we are going to pay for the cost of the ongoing operations in Iraq.

This budget resolution includes $30 billion in funds for ongoing operations in Iraq, but that's even less than what was included in the House budget, $20 billion less than what the Administration intends to ask from the Congress, and only enough to finance the first six months of the five-year span of the budget resolution.

The deficits embraced by this budget resolution will prevent the Congress from allocating any money to address the threat to the Social Security system, even though the Social Security actuaries estimate that $1 trillion will be needed to finance the transition costs under the options proposed by the President's Social Security Commission.

Reconciliation protects additional tax cuts from public discussion about the size of the financial burden that will be passed on to our children and grandchildren.  It leaves hanging questions about deficit and debt and balanced budgets that are clearly on the minds of the people.

We have hard choices to make that may bring to bear enormous change in our nation.  We should not do so silently.  This is no time to sweep problems under the rug.  At the very least, we have a duty to the future to discuss and debate so that the public will know our reasoning.  We should lay down a record so that, if, in the end, our choices were right, they may have in our example a good and steady guide; but also so that, if destiny so transpires that our choices were wrong, others will not repeat our mistake.

If we have learned nothing else from the events of the past year, we certainly should have learned the absolute necessity of debate in our Democratic Republic. We should have learned the folly of failing to ask questions, of failing to probe, of failing to do our duty as the representatives of the people.  I would think that by now we should have learned the dire consequences of our failure to insist on debate.

The Senate must not shirk its responsibility to engage in a debate about these issues.

With the American public, according to recent polls, in such stark disagreement with the current course of our nation's economic and budgetary policies, it is time for the Senate, at long last, to finally engage in an honest debate about the fiscal course laid out by this Administration.

In recent weeks, the Chairman of the Budget Committee has expressed his desire to address the expiring child credit, marriage penalty, and 10 percent bracket tax cuts through the regular legislative process.  The Chairman of the Finance Committee has indicated his belief that including those tax cuts in a reconciliation bill would create a needlessly partisan debate.

The Senate needs time to explore these views.  While these reconciliation instructions are viewed by some as only a backup plan, if both the House and Senate pass a budget resolution with tax reconciliation instructions, the decision about whether to use reconciliation may be taken out of our hands.  The House could force us to take up a reconciliation bill in the Senate containing tax cuts.

The American public deserves the opportunity to better understand how these tax cuts will affect our mounting budget deficits, and to probe whether these tax cuts should be offset. 

We should allow the Senate to have its debate, not stifle it. 

That's the issue on which we will vote.  A vote to strike the reconciliation instructions is a vote to allow the Senate to engage in an informed debate about how to prevent the further deepening of the deficit, and a further worsening of the bitter atmosphere that has, regrettably, engulfed this body.

I urge Senator to vote to strike the tax cut reconciliation instructions.

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