It may not be what you think.
The PRESIDING OFFICER (Mr. Merkley). The Senator from Vermont. November 14, 2012
Mr. SANDERS. Mr. President, I think the American people and Members of Congress, now that the election is over, are paying a great deal of attention to the so-called fiscal cliff and to deficit reduction in general. As we discuss deficit reduction, which is clearly a major issue for our country, it is important for us to remember how we got to where we are today. Where we are today is approximately a $1 trillion deficit and a $16 trillion national debt. I hope everyone does remember that back in January 2001, when Bill Clinton left office and George Bush assumed the Presidency, at that moment in history this country had a $236 billion surplus and economists were projecting that surplus would grow and grow in the future.
The reason, to a very significant degree, that we are where we are today in terms of the deficit has everything to do with the fact that we went to war in Iraq and Afghanistan, but we did not pay for those wars -- which, by the way, by the time we take care of our last veteran, will cost us more than $3 trillion. When we do not pay for expensive wars, we add to the deficit.
When we give out a huge amount in tax breaks, as we did under the Bush administration, and a lot of those tax breaks went to the wealthiest people in this country -- when we give tax breaks to millionaires and billionaires and we do not offset them, we also add to the deficit. When we pass a Medicare Part D prescription drug program written by the insurance companies -- more expensive than it should be -- and we do not pay for that, we add to the deficit.
In the midst of this Wall Street-caused recession, one of the points many people have not seen is that today, at 15.2 percent of our GDP, revenue is the lowest it has been in 60 years. When workers lose their jobs and businesses go under, less revenue comes into the Federal Government, adding to our deficit crisis. That, to a significant degree, is why we are where we are today.
When we talk about deficit reduction and how we go forward, there is another reality we have to address; that is, the middle class of this country is disappearing. Not only is unemployment, in real terms, close to 15 percent, but median family income in the last 10 years has gone down by over $3,000.
Meanwhile, in the midst of all that, we have the most unequal distribution of wealth and income of any major country on Earth. We have the top 1 percent owning 42 percent of the wealth in America while the bottom 60 percent owns just 2.3 percent. In the last study we have seen on income distribution, between 2009 and 2010, 93 percent of all new income went to the top 1 percent and the bottom 99 percent shared the remaining 7 percent. We are seeing a disappearing middle class -- people on top doing fantastically well and very high rates of poverty.
I say all that as a prelude to suggest how we should go forward in terms of deficit reduction. The main point I wish to make is it is absolutely wrong, it is immoral in my view, and it is bad economics to move forward on deficit reduction on the backs of the elderly, the children, the sick and the poor. What we as a Congress have to do is to make several points very clear.
There are a number of folks out there talking about cutting Social Security. Let's get the facts straight. Social Security has nothing to do with the deficit because it is independently funded by the payroll tax. Let me quote maybe an unlikely source on that issue; that is, on October 7, 1984, President Ronald Reagan said:
Social Security has nothing to do with the deficit. Social Security is totally funded by the payroll tax levied on employer and employee. If you reduce the outgo of Social Security that money would not go into the general fund to reduce the deficit. It would go into the Social Security trust fund. So Social Security has nothing to do with balancing a budget or erasing or lowering the deficit.
That ends the quote from President Ronald Reagan, October 7, 1984. I do not often agree with Ronald Reagan, but he was absolutely right.
I am very pleased that just a few days ago majority leader Harry Reid said pretty much the same thing: Don't mess with Social Security. It has nothing to do with deficit reduction. I hope very much that the Senate will agree that as we go forward on deficit reduction, Social Security should be off the table.
Many of us want to make sure Social Security is solvent for the next 75 years. How do we do it? I have ideas. Others have different ideas. But it is not part of deficit reduction.
In my view, at a time of great recession, when so many people are hurting, we must not cut Medicare. We must not cut Medicaid. There are ways to do deficit reduction which are fair. Let me suggest some of the ways we should do it.
The President has been very clear. This is what he campaigned on; that it makes no sense at all from an economic or moral perspective that we continue Bush's tax breaks for the top 2 percent, people who are making $250,000 a year or more. If we end those tax breaks, that is $1 trillion going to deficit reduction.
Right now, one out of four profitable corporations in this country, including corporations that make billions of dollars a year, is paying nothing in taxes. Some of them have actually gotten a rebate from the IRS. Before we talk about cutting Medicare, Medicaid or education, let's make sure we do away with the loopholes many large, profitable corporations are currently experiencing.
One of the particularly outrageous examples of tax avoidance that is taking place right now has to do with the tax havens that exist in the Cayman Islands, Bermuda, and in other countries. There are estimates that we are losing over $100 billion a year because corporations and wealthy individuals, instead of paying their Federal taxes to this country, are stashing their money in tax havens in other countries. That is wrong. That is an issue we must address.
Last, when we talk about deficit reduction, we have to remember we have tripled defense spending since 1997.
We now spend as much money on defense -- or almost as much -- as the rest of the world combined. No one disagrees that there is enormous waste, bureaucracy, and unnecessary weapons systems in the Defense Department that we can eliminate while we maintain the strongest defense in the world.
Let me conclude by saying this: Yes, we have to go forward with deficit reduction but, no, we cannot and must not do it on the backs of the elderly, the children, the sick, and the poor. There are ways to do it that are fair which ask those people who are doing phenomenally well to start paying their fair share of taxes, and that is the position this Senate should take.
Thank you very much, Mr. President, and I yield the floor.
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