Fiscal Policy

Floor Speech

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Mr. MERKLEY. Mr. President, we are involved in a very important national debate about our finances, our deficits, our debt, investments in our economy, including the creation of jobs, and how we take on those problems in the most effective manner to build a strong financial foundation for our Nation going ahead and a strong set of opportunities for families to thrive. In the course of this debate, there has been a very interesting development that merits our attention, and that development is this: Some of my colleagues across the aisle have, over time, chosen to put key programs for the wealthy and well connected not in an appropriations bill but in tax legislation. There are advantages to doing so. With appropriations, programs have to be defended year after year. It has to be reviewed in committee. It may have to go through an authorization process as well as an appropriations process. But if a program for the wealthy and well connected is placed in the Tax Code, then, unless a sunset clause has been instituted, that program is a gift that keeps on giving, unexamined in the course of the standard appropriating process.

By putting these programs for the wealthy and well connected into the Tax Code, some of my colleagues across the aisle have said that as a result, there is an additional advantage. We can claim these programs are off-limits, and we can claim that if anyone seeks to examine these programs for the wealthy and well connected, they are seeking to ``raise taxes,'' and we will scare the American citizens into revolt against that effort to examine these sacred cows.

I think this attitude, quite frankly, underestimates American citizens. American citizens understand very well what is up. They understand there is an effort to put programs for working Americans in legislation where it has to be authorized regularly, where it has to go through the appropriations process annually, but the programs for the most wealthy and well connected are put over here behind the fence where they don't have to go through that process, and then they say those are sacred cows and we can't touch them.

There is a big difference between fighting for fairness for working Americans and fighting to defend the benefits for the best off in our society. This is a debate that must be on the floor of the Senate.

It was in 1976 that I came here as an intern to Senator Hatfield. As it turned out, I was assigned to the Tax Reform Act of 1976. In that assignment, I was reading all the mail from Oregon. Then, as the debate came to this Chamber, I would meet Senator Hatfield at the elevator doors, just outside these double doors to the Chamber. Of course, in those days we didn't have a television camera in the Chamber, and in those days we didn't have e-mail to communicate. So staff members would line up and meet their Senators coming off the elevator and brief them about the debate: What were the ups and downs, what were people back home saying, what type of vote it was, whether it was an up-or-down vote, a motion to table, and so on and so forth. Then I would run up to the seats for the staff to observe the debate, and then I would come back down when the next vote on an amendment came up.

That review in 1976 was a tough discussion, because anytime we talk about cutting a program, anyone who benefits from that program is very upset. But there was an understanding on both sides of the aisle that we owed it to the American taxpayer to spend every dollar in the best possible fashion, and, therefore, there could be no fence walling off programs for some for consideration, while the programs for others merit full examination. Everything needed to be talked about. Everything needed to be weighed as to the value it provided.

Again in 1986, a decade later, an even larger effort--a major effort--was undertaken to examine every tax program, whether it was one that benefited people here or people there, to weigh it in the context of our fiscal responsibility to the Nation. It was Senator Hatfield from Oregon who was head of the Finance Committee and who led that debate on the floor of the Senate. I emphasize that Senator Hatfield was a Republican. Republicans back then believed in fiscal responsibility. They didn't believe in setting off one part of the Tax Code for the wealthy and well connected that would never be examined again, while the programs for working Americans were on the table. No. They looked at everything across the entire spectrum.

So here we are not in 1976, not in 1986 but in 2011. It has been a quarter century since we have had a serious review of the programs embedded in the Tax Code. I must say we have every reason to examine every program funded, whether through the appropriations code or the Tax Code, because we face serious financial circumstances. It is in this context that I would have expected to hear the echoes of 1986--that every program is up for examination and every program is going to be tested against a rigorous set of circumstances to say it is the best use of our dollars. But, instead, my colleagues across the aisle take the position of putting up a very high fence around the tax provisions for the wealthy and well connected, saying their No. 1 goal is to protect those provisions. Programs for seniors are on the table. Dismantling Medicare is a Republican plan. Programs for those who don't have enough food to eat are on the table. Unemployment has been on the table. Funding for the infrastructure we need to rebuild our country is on the table, but this set of sacred cows is not, this set of sacred programs for the wealthy and well connected.

Quite frankly, that is wrong. That must change. We must bring that debate to the floor of the Senate as our colleagues did a quarter century ago, as our colleagues did 35 years ago.

So when it comes to these programs, there must be no sacred cows and there must be no sacred horses. This chart says ``running away with our tax dollars.'' One of the tax programs my colleagues across the aisle are insisting be walled off from examination is a special writeoff for thoroughbred racehorses. Yes, racehorses. This is the bluegrass boondoggle which allows millionaire and billionaire racehorse owners to write off the cost of their horses in an accelerated manner, reducing the normal 7-year period to just 3 years. This bluegrass boondoggle will cost U.S. taxpayers, over the course of the coming 10 years, $126 million, according to CBO estimates, after modeling the impact of this tax provision. This is equivalent to us writing a check over this coming decade for $126 million. This is equivalent to a grant program. This is equivalent to subsidizing a loan program. No program, simply because it is in one bill--the tax bill--rather than in another bill--an appropriations bill--should be off-limits. Horseracing may have been called the sport of kings----

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So horseracing may have been called the sport of kings, but that doesn't mean owners of horses--those millionaires and billionaires supporting those horses--need royal tax treatment. As long as these tax subsidies are preserved, the richest and best off will remain in the winner's circle, while working families don't even get a chance to compete.

There is no doubt that closing this loophole alone isn't going to solve our deficit problem, but it is a good place to start because, otherwise, we are going to cut $126 million from Head Start or $126 million from Medicare for our seniors or programs that help retrain laid-off workers. Giving ``triple crown'' treatment to millionaires, while workers are put out to pasture is not right, and it is not the American way.

I have proposed searching through the Tax Code to find wasteful tax subsidies and eliminate unnecessary giveaways. This year is the right time to start. No one program should be singled out. We should set a series of standards and test each tax program against those standards on whether they create jobs, whether they make a stronger economy, whether they take America forward, and whether that $126 million spent in this category or that is more important to the Nation than other cuts we might be entertaining. Those are the tests that need to be applied in a thoughtful and thorough manner. It is time to stop walling off the programs for the wealthy and well connected while attacking programs that make working America go forward in a stronger fashion.

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