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Floor Speech
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Mr. LEE. Madam President, we have broken another record. Unfortunately, it is not the kind of record we want to boast about. Last week, the latest Consumer Price Index exceeded inflation expectations at a staggering 9.1 percent. In Utah, that rate is much higher.
The Biden administration's evolving blame game has shifted. It has shifted its focus from the pandemic to the supply chain and then from the supply chain to Putin. There is, however, a more coherent answer: Government continues to spend more than it has--a lot more. Last year, we saw this play out. This Congress spent a stunning $6.8 trillion while collecting just over $4 trillion in revenue. With the return of legislative earmarks, porkbarrel spending, meanwhile, has increased over 1,700 percent.
Rather than recognizing the problems associated with spending more than the government brings in, the government simply prints itself more money. Like a child stricken with affluenza, rather than being cut off, the government helps itself to more money. It doesn't take long to lose the value of a dollar when you are not spending your own money. Government is no different.
While hard-working Americans pinch pennies, lawmakers spend carelessly. To pay for their next project, they threaten to raise taxes. When they don't have the support to raise taxes, they nevertheless continue to spend and drive up inflation. Inflation is nothing but an invisible tax on the people--a tax on the people that, I would add, disproportionately affects hard-working Americans, the poor and middle-class Americans. Sometimes the wealthiest of the wealthy can find ways to get even wealthier in times of inflation. Everyone else gets hurt.
With no action, the reckless spending will drive us off a financial cliff. But our spending trajectory is such that we cannot afford to wait for the consensus needed to pass a constitutional amendment.
While hard-working Americans wait, I have introduced the Preventing Runaway Inflation in Consumer Expenditures Act, or the PRICE Act, to stop the bleeding. The PRICE Act requires a three-fifths supermajority of Senators to approve new spending measures when the Nation's inflation rate is at or above 3 percent.
The PRICE Act is desperately needed. This insatiable spending machine is now costing Utahns $881 a month more than they paid last year, and that is on top of what they already pay in taxes. Those are 881 dollars every month for which Utahns receive nothing in return. It represents money that could be spent toward their home, toward their child's college education, toward filling their empty gas tank, but instead, millions of Americans will look at the skyrocketing costs of living and determine that they must sacrifice their wants and, in many cases, their needs just to meet their most basic, fundamental necessities.
My PRICE Act flips the script. It doesn't altogether prevent lawmakers from spending when inflation is above 3 percent, but it requires lawmakers to offset that spending with cuts from somewhere else. In essence, it puts the impetus on Congress to weigh its legislative wants against the legislative needs of the American people. That is because for everyone living in reality, a budget means something.
Failure to live within a budget has profound consequences. When Jack has to pay an extra $93 a month on food, he begins to doubt his ability to feed his family. When Jill has to pay an extra $145 a month for housing, she doubts her ability to keep a roof over her child's head. When Joe has to pay an extra $404 a month on transportation, he doubts his ability to get his child to and from soccer practice.
So why is it that when inflation is at 9.1 percent, lawmakers are still spending and looking for ways to spend even more? As Americans are filled with financial fear and doubt, why is it that Senate Democrats want to spend an additional trillion dollars for their Build Back Better plan?
Congress is failing to exercise self-restraint during this period of unprecedented inflation. As Americans tighten their belts, Congress has opened the spigot. If a household ran this disaster of a budget, a family would quickly be met with foreclosures, repossessions, and ultimately bankruptcy. Ronald Reagan couldn't have been more prescient when he described inflation as ``the price we pay for those government benefits everyone thought were free.'' While Members tout their shiny new pet projects, Americans are footing the bill.
It is unconscionable that Congress continues to pat itself on the back for passing massive spending bills while the country has a financial millstone around its neck. It is high time that Congress subject itself to the same cutbacks that working-class families are facing now.
Although I wish Members of Congress would self-impose these restraints, this latest push for a new trillion-dollar spending plan shows that is unlikely to happen. Given our long-demonstrated lack of self-restraint, it is time to pass the PRICE Act.
Congress has become the trust fund baby that doesn't understand the value of a dollar. The PRICE Act is the recognition that sometimes you need to take away the credit card. So to that end, I would like to secure passage of this measure to protect the American people.
3770 and that the Senate proceed to its immediate consideration. I further ask that the bill be considered read a third time and passed and that the motion to reconsider be considered made and laid upon the table.
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Mr. LEE. Mr. President, the Senator from Vermont and I don't agree on every issue. We represent very different States, come from very different political backgrounds. While I don't agree with everything he just said and while I am disappointed by his objection to my effort to pass the PRICE Act, which I regard as necessary to help keep inflation under control, I want to echo and applaud so much of what my colleague from Vermont just finished saying.
I don't think it is appropriate, when we have people throughout the country struggling just to get by and we have people in Utah shelling out an additional $881 a month--every month--not for luxury items, not for some wish-list item, but for their basic household monthly expenses, every single month because of excessive runaway spending in Washington leading to that inflation. Especially in that circumstance, I can't fathom why we would want to turn now and devote $75 to $76 billion to what my colleague from Vermont appropriately described as corporate welfare.
This is industrial policy, which--unlike the Senator from Vermont, I don't like industrial policy--but I completely agree with my colleague from Vermont. This goes beyond even that. This is corporate welfare.
There is an editorial in today's copy of the Wall Street Journal by the editorial board. It makes some excellent points, which I would like to excerpt and present to the Senate today. The editorial starts out as follows:
Industrial policy is back in fashion in Washington, or as it ought to be called, corporate welfare. The semiconductor industry is first in the queue, but it won't be the last. Taxpayers should at least know they'll be subsidizing highly profitable companies that don't need the help and might end up regretting the political handcuffs they're acquiring.
The bill that will head to the Senate floor as early as Tuesday--
Meaning today-- includes $52.2 billion in grants to the computer chip industry. But wait, there's more. Congress is also offering a 25% tax credit for semiconductor fabrication, which is estimated to cost about $24 billion over five years. That's $76 billion for one industry.
The editorial continues:
Republicans on the House Ways and Means Committee point out that for the same money Congress could double the research and development tax credit for all companies through 2025. It could also throw in 100% expensing for companies and allow immediate R&D deductions through 2025. But that would mean the politicians aren't picking favorites, which is what they prefer to do.
The editorial goes on from there to describe the circumstances that led to the introduction of this bill, the fact that there was surging demand and diminished capacity to produce the semiconductors during the pandemic and that, since the pandemic, a lot of these very same firms trying, understandably, to keep up with demand have increased their production.
Meanwhile, 2 years later, they find themselves in a position where, due to changing economic circumstances, demand is starting to soften; and so they may now be in a position where they have ramped up supply only to see that demand is diminishing. All of which starts to beg the question, Why would we dump over $76 billion into this industry right now when people across America, including these Utahns, are facing some of the highest price hikes in the country for a variety of reasons? Why would we give money to a small handful of wealthy corporations at a time like this, understanding that every dollar we spend here that we don't have means that we are inflating the currency even more? And that ends up creating all sorts of problems.
A few paragraphs later the editorial goes on to explain the next line of arguments. They point out that those advocating on behalf of the CHIPS Act say: But, oh, we have to do this because it is about China. We have to do this in order to stop China, and this also can't withstand scrutiny.
Look, as the editorial writers of the editorial board of the Wall Street Journal point out:
Global semiconductor capacity increased 6.7 percent in 2020 and 8.6 percent in 2021 and is expected to grow another 8.7 percent this year. The risk of over-capacity is growing as China heaps subsidies on its semiconductor industry as part of its Made in China 2025 initiative, and the U.S. and Europe race to compete.
Some 15,000 new semiconductor firms registered in China in 2020. Some have drawn investment from U.S. venture-capital firms. Intel has backed Chinese startups even as CEO Pat Gelsinger lobbies Congress for subsidies to counter Beijing. Intel has threatened to delay a planned Ohio factory unless Congress passes the subsidy bill.
I pause here to note that this is troubling. If true, this should be a warning to us about why we don't engage in corporate welfare. This is wrong. Deep down, we know it is wrong to take from the poor and give to the rich. We have no business doing this, nor do we have any business voting cloture on a motion to proceed to a bill that doesn't yet exist. We don't yet know what is in the bill because it is still being transformed significantly, even as we speak.
The Wall Street Journal editorial board continues:
The other claim for the bill is that the U.S. must subsidize domestic chipmaking to compete with China, but this also isn't persuasive. The companies like to point out that the U.S. share of the world's chips has fallen to 12 percent from 37 percent in 1990. They don't mention that the U.S. leads in chip design (52 percent) and chipmaking equipment (50 percent). Seven of the world's ten largest semiconductor companies are based in the U.S. China trails American companies by years in semiconductor technology.
Chip fabrication has moved to South Korea and Taiwan because many chips are commodities with low margins. But chip makers are working to diversify their manufacturing bases to avoid future supply disruptions and have announced $80 billion in new U.S. investments through 2025. Samsung plans to build a $17-billion factory in Texas. TSMC has a $12- billion plant under construction in Arizona.
I pause here to note that in meeting with representatives from some of these companies, including TSMC, TSMC noted--in my conversations with high-ranking executives of that company--that plant isn't made contingent on any legislation they are producing. They are doing that because it makes good business sense, not because it is their last-gasp effort. This is a profitable company doing well, and for the United States to be considering giving money--whether to domestic companies or foreign ones--under these circumstances in this amount of money makes no sense.
The editorial continues:
One unfortunate impetus behind this bill is that, for all their talk about competing with China, many politicians believe that Beijing's economic planning is superior to the U.S. free market system. It reminds us of the 1980s when legendary Intel CEO Andrew Grove warned that Japan was going to dominate the chip industry and the future of global technology.
As former Cypress Semiconductor CEO T.J. Rodgers explained on these pages last year, the government set up the Sematech chip consortium that ``was obsolescent when it opened.'' But Intel innovated with more advanced chips, and no one is talking now about Tokyo's central-planning genius.
The editorial concludes:
History shows that easy government money can undermine competitiveness. It often leads to inefficient spending and investment. The politicians will also attach their own strings, perhaps with limits on stock buybacks and dividends. Wait until Bernie Sanders is heard from on the Senate floor.
They forecasted what we have seen today. It closes with the following sentences:
The chip bill isn't needed to compete with China, and it will set a precedent that other industries will follow. Anybody who can throw up a China competitive angle will ask for money. Why Republicans want to sign up for this is a mystery, especially when they might control both Houses of Congress in six months.
I couldn't agree more with the editorial board of the Wall Street Journal on this assessment. This is wrong. We know it is wrong. The bill still, as it stands right now, is unknown to most for the entirety of this body. We do know it costs over $76 billion. We do know people across America, including poor people throughout the State of Utah--not just the poor, but most people--again, with inflation, during periods of inflation, the extremely wealthy can find ways to become even wealthier, but everyone else suffers--literally, everyone else. The poorer you are, the more you suffer. Even people well-entrenched in the middle class get gouged considerably. Why we would want to take money away from them and give it to the wealthy is beyond my ability to fathom.
All of this ties back to the reason I came to the floor today, which was to try to pass the PRICE Act by unanimous consent. We didn't succeed today, but we are not going away. We are going to keep undertaking this effort because the fact is, we do need to impose a supermajority requirement for spending, especially when spending levels are producing inflation in excess of 3 percent. We are at 9.1 percent nationally. And in many of our States, including my own, it is higher than that. That is why we need this.
My colleague pointed out he believes that the Tax Cuts and Jobs Act may have contributed to that. Well, that is not exactly how things work. When you are passing a tax reform bill--a tax reform bill that makes downward adjustments to marginal income tax rates and to corporate rates and capital gains rates--yes, it brings in less revenue, but the government taking in less revenue doesn't cause inflation. It is deficit spending that causes inflation.
Given that it is deficit spending--particularly deficit spending during periods of inflation--that matters, I believe that is where we ought to be focused. We ought to be focused on pro-growth opportunities. And, frankly, if those adjustments to corporate rates, to capital gains rates, and to marginal tax rates are, in fact, pro- growth, they reduce disincentives to work, they bring more people back into the labor market, and that, in turn, produces more tax revenue.
You can expand, broaden the base, while lowering their rates and, ultimately, come out on top and with more robust economic growth. But what you can't do is engage in increasingly more aggressive deficit spending and expect that is going to do anything but harm the American people, especially America's poor and middle class.
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