The Economy

Floor Speech

Date: Dec. 7, 2011
Location: Washington, DC

Mr. WICKER. Mr. President, we are now as a country squarely in the middle of the Obama economy. It is a period of slow growth, persistently high unemployment, with many potential workers having abandoned the playing field and simply given up looking for work.

There is a growing awareness among our countrymen that the policies of President Obama--the policies enacted during the first 2 years of his administration under Democratic supermajorities--have made matters worse.

We have legitimate disagreements in this Capitol concerning the solutions to the problems we are experiencing with the Obama economy. My colleagues and I on this side of the aisle would enact aggressive regulatory reform, an expansive energy policy, and we would vastly limit the size and scope of the Federal Government. That is our plan, and it is a plan about which we could have genuine disagreements.

What I want to talk to my colleagues about today, though, is what I would suggest is a manufactured dispute over this issue of the extension of the payroll tax. That is an issue on which really there is a wide consensus on the Democratic side of the aisle, over here on the Republican side, and down the hall in the other body.

The President said only a few months ago that it is not wise to raise taxes on anyone during a recession. And we certainly are in a recession. In recent weeks, the President has suggested that perhaps he has abandoned this position and changed his mind and that we should perhaps raise taxes on some people even though we are still in a recession. But Republicans have consistently agreed with what the President said earlier: We are in a recession, and this is no time to raise taxes on anyone. This means we shouldn't raise taxes on the working poor. It means we shouldn't raise taxes on employees working on the assembly line or working in the retail sector. It means we should not raise taxes on job creators. We should not raise taxes on investors on whom we depend to provide the capital to create jobs. We shouldn't raise taxes on anybody because we are in a time of recession.

Let's put this into a historical context. Last December, at a time when Democrats still had supermajorities over here in the Senate, when Speaker Pelosi was still in charge in the House of Representatives with her majority there, this Congress on a bipartisan basis enacted legislation to keep in place the Bush-era tax cuts, to leave those rates in place for all Americans at whatever income level, and we also on a bipartisan basis enacted a cut in the payroll tax. This is the Social Security tax that all workers pay regardless of income, the so-called FICA taxes that you see on your pay stubs. Last December, that tax cut dropped the payroll tax for employees from 6.2 percent to 4.2 percent. I supported that. Republicans and Democrats supported that. It is up for renewal, and there is a huge majority of Members of the House and Senate who want to renew that. The distinguished majority leader, Senator Reid, however, has suggested that not only do we keep the lower rate of 4.2 percent rather than 6.2 but we actually lower that FICA tax to 3.1 percent.

We can have an extension of the current FICA tax rate. Democrats know it, the White House knows it, and the Republican conference knows it. But one problem must be addressed, and I think both parties want to address this: We need to offset the cost to the Social Security trust fund of these lower payroll tax rates. Why do we need to do this? Because when the law says we are really supposed to be taking in 6.2 percent and putting that in the trust fund to make the Social Security Program as solvent as possible and we lower that to 4.2 percent or to less, as the majority leader wants to do, it amounts to a drain on the Social Security system. I think the last thing we want to do with a weak system, which we know can't come out in the end, is to put further pressure on the Social Security trust fund. So both parties have proposed to offset, or pay for, a continuation of the payroll tax cuts.

Last week, the White House unveiled a digital clock at the top of its Web site that counts down to the date when the payroll tax cuts will expire at the end of the year. This somehow suggests that someone in this town wants the payroll tax to go back up to 6.2 percent. This is pure political gamesmanship. We can have a bipartisan solution to keep the payroll tax at 4.2 percent, but we must pay for it.

The distinguished majority leader, Senator Reid, had a proposal last week not only to lower the payroll tax to 3.1 percent but to pay for it by raising taxes on someone else. This violates what the President said several months ago: We don't need to raise taxes on anyone.

We can pay for a continuation of this, as Republicans have proposed to do, by offsetting it with smart spending cuts, a freeze in Federal pay, a reduction in the Federal

workforce, and means testing of some benefits at the upper income levels. We proposed this last week, but it was shot down by the majority in this body with, to me, a contrived plan to actually lower the payroll tax and shift those taxes to someone else.
We are told that this week, just like last week, we are going to have some more political theater. The majority leader will propose once again a tax increase on others so that we can keep this payroll tax cut, and we will propose a side-by-side which is essentially the pay-for plan to keep the tax rate as it is. Both of these will fail because the majority leader intends for them to fail, and essentially we will have wasted 2 weeks at the end of this session of Congress by creating a manufactured disagreement for the sake of scoring political points.

Maybe after we get this week over with and we have had yet another week of gamesmanship, the Senate can get down to the business of passing a simple extension of the payroll rates in their current form and to offset that action with savings. There is an absolute majority in the Senate and in the House to do just that. In doing so, we can end 3 weeks of political theater with the Democrats trying to score points for 2012.

I wish we could fast-forward to next week and get this important piece of legislation done and enact a continuation of the payroll taxes that a vast majority of Republicans and Democrats support.