Transcript: Sen. Patty Murray challenges Republicans on ‘balanced approach’ to avoid fiscal cliff
Transcript of remarks by Sen. Patty Murray (D-Wash.) on the impending ‘fiscal cliff’. The remarks were delivered at the Brookings Institution on July 16, 2012.
I am so glad to be here today to discuss this issue with so many of you who have been working on this for a very long time.
I want to thank the Budgeting for National Priorities Project at Brookings for hosting us here today as well as the great members of the panel that you’re going to be hearing from shortly and all of you for taking time to be a part of this discussion.
As all of you know, last August I was asked by Majority Leader [Sen. Harry] Reid (D-Nev.) to co-chair the Joint Select Committee on Deficit Reduction or the ‘Super Committee’ as it was commonly called. This certainly wasn’t the most sought-after job in Congress as you may imagine; it was probably just a notch below the chair of the DSCC [Democratic Senatorial Campaign Committee].
But I agreed to do it because I thought it represented a few important opportunities – the opportunity to avoid the pain of sequestration that would be triggered if no deal was made, of course; to pass a responsible long-term deficit reduction plan with a simple majority guaranteed vote in the House [and] no ability to be filibustered in the Senate, which is no small deal these days; and also after years of partisan rancor culminating in a truly ugly and absolutely unnecessary debt ceiling battle, the opportunity to finally show the American people their government wasn’t broken and that we could come together when we needed to.
Well, as everyone in this room know, the Super Committee was not successful and we couldn’t come to a bipartisan deal.
And the reasons for that – the lessons learned from those four months of intense bipartisan talks – are absolutely critical as we face those exact same issues heading into the end of the year and the so-called ‘fiscal cliff.’
Because if we want a different outcome, if we want to come together around a balanced and bipartisan deficit reduction deal, the American people expect and deserve something is going to have to change.
So today, I want to talk about the vision, values, and priorities that drive my approach to tackling the challenges, and I’m going to contrast that with what I see as the short-sighted and deeply flawed vision that has been dominating the Republican party. I will run through how these contrasting visions played out in the specifics of the Super Committee negotiations and the recent budget debates. And then I will lay out how I see our path forward as we now head toward the end of this year.
Now, my approach with this issue starts with my own family. It starts with a story that probably isn’t so different from stories told by families across the country.
I was born and raised in the small town of Bothell, Washington in a big loving family. My dad ran a 5 and 10 cent store on Main Street and everyone in our family helped out at the store. My family was certainly not rich but we never felt deprived in any way.
But when I turned 15, things started to change. My dad, who was a World War II veteran, was diagnosed with multiple sclerosis. In a few short years, his illness got so bad, he couldn’t work anymore.
My mom, who had stayed home to raise a family, had to take care of him but she also needed a job so she could support our family. She found some work but it didn’t pay enough to support me and my six brothers and sisters and a husband with growing medical bills.
Without warning, my family had fallen on hard times. But thankfully, we lived in a country where the government didn’t just say, ‘Tough luck.’
My dad was a veteran so he got some help from the VA [Veteran’s Administration] for his medical care. For several months, my family had to rely on food stamps. It wasn’t much but it put food on the table so we could get by.
To get a better paying job, my mom needed some training. Fortunately, at the time there was a federal program that helped her attend Lake Washington Vocational School, where she got a two-year degree in accounting and eventually a better job.
And my brothers and sisters and I were all able to go to college through federal grants and student loans.
Like millions of Americans, we got by with a little bit of luck. We pulled through with a lot of hard work.
And while I’d like to say that we were strong enough to make it on our own, I don’t think that’s really true.
I know that the support we got from our government was the difference between seven kids who might not have graduated from high school or college and the seven adults that we have come to be – all college graduates, all working hard, all paying taxes, and now all giving back to our own communities.
So this is the primary prism that I view our nation’s budget through, and it’s what guides me as I work in the Senate to impact the choices that we make.
Not that government can or should solve every problem. Of course it shouldn’t and it can’t. But that we are a nation that’s always come together to stand with families like mine, to invest in our people, in our communities, in our future, and to build the most robust middle-class the world has ever seen.
But a budget is not just numbers on a page. Despite what you may think if you listen to some of the debates we’re having recently, the word budget is not just a synonym for deficit reduction. But it is not just about charts and graphs and trajectories we have been hearing about. Those are important too.
But that a budget tells a story of what kind of nation we are and the kind of nation we want to be. And that it is a statement of our values and our priorities and our vision. Or at least that’s what it ought to be.
These ideas led to some very clear goals as I went into the Super Committee.
First, I thought everything needed to be on the table when we started. This doesn’t mean that members are supposed to check their values at the door, but it did mean we have the best chance of success if members didn’t rule out any changes to entire swaths of the federal budget before we even began.
Second, I felt very strongly that any deal has to be balanced and include both spending cuts and new revenues.
The middle-class and vulnerable Americans have already sacrificed so much. They lost their homes or the value of their homes. They lost their jobs. They lost their life savings. And they should not be called on to continue bearing the burden of deficit reduction alone.
Third, I wanted to make sure we didn’t let the very real need to tackle our deficits and debts cause us to cut off the most critical investments in our families and our future or set aside the values and priorities that have made America great.
Fourth, I wanted to do a big deal – a grand bargain. I was willing to consider a small deal to avoid the pain of sequestration but I thought it should be a last resort. I wanted us to truly put our country on track to tackle the debt and deficit, not simply continue lurching from crisis to crisis. And I was willing to make the tough compromises that were required to get there.
But unfortunately while there are many Republicans who share those goals, who see the value of government that works for the middle-class families, their party has been dominated by an extreme ideological string that allows itself to only think in terms of cutting and shrinking and eliminating and never in terms of investing or growing or fairness.
They have a vision for our country in which families like mine would not have gotten a hand up; we would have been left to fend for ourselves.
A vision best articulated by one of their ideological leaders, Grover Norquist, who said, ‘I’m not in favor of abolishing the government. I just want to shrink it down to the size where we can drown it in the bathtub.’
Grover Norquist, by the way, was kind enough to wish me luck on the Super Committee by telling reporters that ‘the lady from Washington doesn’t do budgets.’
Well, he has enlisted a pledge from almost every single Republican member of Congress to never – under any circumstance – raise taxes by even a penny despite the fact that the wealthiest Americans are paying the lowest rates in generations. Despite the fact that the wealthiest Americans are today paying the lowest rates in generations and the federal government is taking in the lowest level of revenues in decades.
Unfortunately, far too many Republicans have latched on to this deeply damaging ideology.
They pay lip service to deficit reduction. But what they actually seem to be concerned about is cutting taxes for the rich and starving programs that help middle-class families and the most vulnerable Americans.
If Republicans really thought the deficit was the most pressing issue, you wouldn’t have seen their presidential nominee say he would reject a deal to cut $10 in spending for every $1 in tax increases. You wouldn’t have seen them do everything possible to protect the Bush tax cut for the rich. You would have seen far more interest among their leaders in Congress to compromise with the Democrats to get the grand bargain that everyone in this room understands we need. And you would not see their single-minded focus on slashing non-defense discretionary spending, which only makes up 16% of the federal budget, is already shrinking, and provides critical support for our families and investments in our future.
So it was with very different visions and priorities that the two sides came together in our Super Committee last year. I understood it would be difficult but I knew Democrats were ready to compromise and opened to the concessions a balanced and bipartisan would require. And I was hopeful that the Republicans were as well.
The first day the Super Committee met as a group, we went around the table and we each talked about what we wanted to accomplish. We shared some coffee and runny eggs and our hopes for the coming months.
Democrats discussed our priorities and our willingness to put everything on the table to get a balanced deal. We discussed our desire to continue working to cut spending responsibly. We talked about our willingness to tackle entitlements and to make sure they were strengthened in a way to ensure they would be there for our children and our grandchildren. We highlighted the need to responsibly reduce defense spending while making sure that our national security needs were addressed. We laid out our belief that in a fragile economy with millions of Americans out of work, it made sense to invest in the short-term while putting our nation on a path to long-term debt and deficit reduction. And of course we talked about the need for a balanced approach that included revenue.
Republicans opened in a very different way. One said that defense cuts were off the table and indicated that instead of trying to go big, the group should focus on just doing the opposite. He wanted us to go small. Republicans pushed for us to focus on the so-called ‘low-hanging fruit’ from prior negotiations before working on any of the tougher issues, meaning that they wanted to start by locking in and agreeing to all of the spending cuts that were identified as potentially working in a larger deal but none of the revenue increases that would have actually made such a deal possible.
This was a tactic that we had seen before. And of course we were not going to agree to an approach that would lead to an all-cuts unbalanced deal.
So it wasn’t a great start but my hope was that this was just a negotiating position, not a hard line.
We continued our bipartisan conversations. We traded offers and ideas. We had our staffs draft and analyze potential language. There were times when I thought we were very close.
But looking back at the offers from the other side that represented the greatest attempts at compromise, it’s clear that while we were close on the spending side, Republicans haven’t even left their corner when it came to revenue.
The biggest offer Democrats put forward was an attempt at a grand bargain. This proposal built on the $1 trillion in cuts in the Budget Control Act with an additional $1.3 trillion in cuts to spending and changes to entitlement programs as well as $1.3 trillion in new revenues. And it included a short-term investment in jobs to give our economy a much-needed boost.
To be honest, it was a painful offer. It included compromise on entitlements that personally I wasn’t absolutely comfortable with. It had deep concession on the spending side. But I knew that the only way a deal was possible was if both sides were willing to accept some pain, and I was willing to do that for a balanced and fair deal.
But our balanced proposal stood in sharp contrast to the offer that Republicans would hang their hats on when it all ended – the Toomey plan.
This was their attempt at acting like they were putting revenue on the table and offering a compromise when in fact it was doing the exact opposite. The Toomey Plan was small. It included $700 billion in spending cuts, which was less than what the Democrats had offered, around $300 billion in new government fees, and $300 billion in what they were calling new revenue.
It’s important to note that many of those numbers were fuzzy, and it’s unclear actually how CBO [Congressional Budget Office] would have actually scored a lot of that.
But I want to unpack that last number a bit because what the Republicans were trying to do here is not unique to the Toomey plan. We had seen this over and over in their budget proposals.
The Toomey plan would permanently cut the top tax rate for the wealthiest Americans from the 35% it is now – and scheduled to increase to 39.6% on Jan. 1  – down to 28%, which would add trillions more to the deficit.
It gets even worse.
The Toomey plan claims that this lost revenue would be offset by closing loopholes and ending deductions and further there would be $300 billion in extra revenues once this was all said and done.
But while the plan was explicit about giving the rich the biggest tax cut since the Great Depression, it is painfully vague when it comes to where that revenue is going to be found to offset that. In fact, it ignored that part completely. It simply assumed Congress would be able to get that done through ‘tax reform’.
Well, there was some analysis done to a proposal that was similar to Toomey’s and what they found was that in order to pay for the tax cuts for the rich, we would have had to slash to the bone the personal and dependent exemptions, almost all itemized deductions – including the most popular ones we all know: home mortgages, charitable donations, state and local taxes, child tax credit, college tuition tax credit. Almost every other tax credit.
So to spell out the obvious, under the Toomey plan, the richest Americans would get a huge tax cut while the middle-class would lose the tax benefits that mattered to them the most.
In an analysis of a similar plan, it was estimated that someone making over $1 million a year would see an average tax cut of over $31,700. In fact, anyone making over $200,000 would get a tax cut.
But for anyone making less than that – the middle-class, the poor – the cuts in rates didn’t make up for the exemptions and deductions lost. For example, someone earning $55,000 would see an average increase of almost $1,000.
So not only is it deeply unfair to ask the middle-class to foot the bill for another deficit busting tax cut for the rich, but the Toomey plan would lock them in with no guarantee that the revenue would ever be found to pay for them.
There’s nothing responsible about that in my book. In fact, I find it offensive.
You know, I was actually reminded of the Toomey plan when I saw the Ryan budget this year.[Rep. Paul] Ryan’s budget cuts taxes for the rich even deeper than Toomey’s, down to a top rate of 25% and uses the same parlor trick to raise revenue that Toomey’s does.
Ryan, however, needed Congressional Budget Office to score his plan as a deficit reducer not a deficit buster that it actually was. So he simply directed the CBO to score his plan assuming it would raise 19% of GDP [Gross Domestic Product]. Well, that’s quite an assumption; wish we could assume all of our problems away like that.
Former Reagan adviser Bruce Bartlett slammed Ryan’s tax plan in a column in the Fiscal Times, writing ‘He offers only a sugar of rate reductions without telling us what the medicine of base broadening will be.’
And I should add Republican presidential nominee Mitt Romney’s plan does something similar – cuts rates for the rich while refusing to name what deductions would be closed to pay for it.
So the Toomey plan was a gimmick. It was bait and switch. It was not a step in our direction. It was a leap toward the Tea Party and away from a deal.
Democrats were willing to match the Republicans dollar for dollar on the spending side and more. We went even beyond the Toomey plan when it came to tackling entitlements. We had backing from our leadership and our party to make a big deal. We jumped right into the middle of the ring.
But Republicans refused to move an inch in our direction on revenue. They actually tried to use the deficit reduction committee to cut taxes for the rich even further.
And they were so focused on how their extreme base would react, they simply could not summon the will to leave their partisan corner.
Why is this? Why is the modern Republican party so opposed to allowing the rich to pay just a little bit more in taxes to help solve the debt and deficit problem in this country that they would prefer no deal at all?
After all, it wasn’t always this way. President Reagan raised taxes 11 times. President George H.W. Bush famously raised taxes to reign in the deficit. This really shouldn’t be controversial and outside today’s Republican party it isn’t.
Because if you believe that the deficit and debt are major problems that need to be address – as Democrats do and as Republicans claim to – then you can’t simply ignore revenues at a time when at 15.4% of GDP they are the lowest in 60 years.
Poll after poll has shown the American people overwhelmingly want to reduce the deficit with the combination of cuts and revenues. Every single bipartisan group that has made progress in the area, from Simpson-Bowles to Domenici-Rivlin and others, were able to come together because their plans were balanced.
And let’s be clear. We don’t want to increase revenue for the sake of increasing revenue. Of course not. But as a nation, we need to pay for the services and programs the American people want. We need to reign in the deficit and debt, and we need to do it in a responsible way.
Democrats understand this and congressional Republicans should too because all of this is coming to a head once again.
Unlike last year, the consequences of gridlock could be felt immediately. Millions of jobs could be lost through the automatic cuts. Programs that families depend on could be slashed irresponsibly across the board, and middle-class tax cuts would expire.
And once again, if Republicans won’t work with us on a balanced approach, we are not going to get a deal. Because I feel very strongly that we simply cannot allow middle-class families and the most vulnerable Americans to bear this burden alone. It is just not fair.
So if we can’t get a good deal – a balanced deal that calls on the wealthy to pay their fair share – then I will absolutely continue this debate into 2013 rather than lock in a long-term deal this year that throws middle-class families under the bus.
And I think my party and the American people will support that. I hope it doesn’t come to that.
I think we have some good reasons to think a deal can happen before the end of this year. I know Democrats are willing to compromise; we just need a partner.
Thankfully, I’m seeing some encouraging signs from Republicans who are sick and tired of being boxed in by the most extreme elements of their base, who don’t like being responsible for continued manufactured crises that hurt our economy and destroy our nation’s faith in its government, and who are concerned about the impact of sequestration.
In the privacy of back rooms and in small gains, Republicans are far more willing to discuss the need for revenue. And there are some Republicans passionate about national defense and willing to make some tough choices on revenue to protect the Pentagon.
In fact, some of the productive conversations that my Republican colleagues have been having have led Grover Norquist to decry their ‘impure thoughts’ when it comes taxes. Well, I hope these impure thoughts continue. If Norquist is mad – and I mean that in the angry sense of that word –[Laughter]
– then we must be on the right track.
Because the only way we can get a balanced and bipartisan deal is if responsible Republicans can persuade their leadership to stand up to the most extreme elements of their base and come to the table with real compromises.
I also think many Republicans are starting to realize something very important. On Jan. 1, if we have not gotten a deal, Grover Norquist and his pledge are no longer relevant to this conversation.
A name, by the way, that I heard repeatedly over and over by Republicans in the Super Committee will no longer be a part of this debate. We will have a new fiscal and political reality.
If the Bush tax cuts expire, every proposal will be a tax cut proposal, and the pledge will no longer keep Republicans boxed in and unable to compromise.
If middle-class families start seeing some money coming out of their paychecks next year, are Republicans really going to stand up and fight for new tax cuts for the rich? Are they going to continue opposing the Democrat’s middle-class tax cut once the slate is wiped clean? I think they know that that would be an untenable position, and I hope that this pushes them to come to the table with revenue now before being forced to the table if we don’t get to a new deal by the new year.
Because you know what? We really shouldn’t wait. It’s not good for the economy. It’s not good for the markets and, most importantly, not good for our taxpayers and small businesses across America.
So when it comes to the expiring Bush tax cuts, I agree with President [Barack] Obama. Let’s extend them for the 98% of workers and 97% of small business owners Democrats and Republicans agree should have their tax cuts. And then have a real debate on the tax cuts for the wealthiest Americans that we disagree on.
You know, before August we’re going to have a vote to do that exactly in the Senate. Senate Republicans have indicated that they’re going to make an effort to extend all of the Bush tax cuts, including those for the rich.
I challenge them to do something different – to be honest about what they really want and allow everyone to clearly state their position on this issue. I challenge them to offer an amendment to our middle-class tax cut that would simply extend the tax cuts they’re fighting for – the tax cuts for the rich. Not a political amendment to offered to give their members simply a way out of voting a middle-class tax cut – a real amendment. If they do this, all of the Bush tax cuts would be up for a clean, honest extension vote and the American people would know where everyone stands.
Any Senator who supports extending tax cuts for the middle-class can vote for our bill. Any Senator who supports extending tax cuts for the rich can vote for the Republican amendment. And any Senator who supports extending all the tax cuts can vote for both.
That would give everyone an opportunity to vote for exactly what they want and it would make sure that the political gimmicks won’t get in the way of delivering results for the 98% of workers both sides agree should have their tax cuts extended.
If Republicans don’t do this, if they continue playing political games with this vote and only offer an amendment to kill this bill, then they will have proven conclusively they don’t care about certainty, they care about extending those tax cuts for the rich and they will use every bit of leverage that they have to do it.
If we are really going to address these issues, we have to cut through the smoke screens. It’s time to put our cards on the table, offer real choices, and have a debate that is worthy of the Senate.
Holding the middle-class tax cuts hostage may be a smart tactical move if the goal is to protect the rich. But it’s not good policy, it’s not good politics, and Democrats are going to keep reminding the American people why middle-class tax cuts aren’t being extended immediately even though both sides say they want them to be.
You know, I’ve also heard the claim made that we need to extend all the tax cuts to give us time to reform the tax code. Well, we absolutely need to reform the tax code; it is badly broken. And I’m certainly willing to discuss a fast-track process for getting that done. But there’s absolutely no reason – not one – that we need to extend the tax cuts for the rich as a pre-condition for reforming the tax code.
And when we do get to work on this, Republicans are going to have to accept that tax reform is not going to be a back doorway for them to sneak through more tax cuts for the rich and it’s going to have to raise revenue to help reign in the deficit and debt.
Now, in addition to the expiration of the Bush tax cuts we also face a $1.2 trillion in automatic spending cuts. As you all remember, sequestration was included in the bipartisan Budget Control Act to give both sides an incentive to compromise.
But Republicans weren’t willing to offer any concessions to get to a deal, and now they want to have their cake and eat it too. They want all of the deficit reduction but without any of the bipartisan compromise of ‘shared sacrifice.’
You know what? If Democrats were willing to accept a wildly imbalanced deficit reduction plan to avoid the automatic cuts, we would have done that back in the Super Committee. We didn’t then; we will not now.
So anyone who tells you sequestration is going to simply disappear because both sides want to avoid it is either fooling themselves or trying to fool you. It is going to have to be replaced, and that replacement is going to have to be a balanced plan.
We’re also not going to allow just the defense cuts to be replaced without addressing the domestic spending cuts that would be devastating to the middle-class.
None of the automatic cuts are good policy. They were packaged together in a bipartisan fashion to get both sides to the table, and they will be replaced or not as a package.
Here in D.C. the defense cuts get most of the attention. But across America all the automatic cuts would be deeply damaging to our families and our communities. That is exactly why I’ve been working across the aisle with Sen. [John] McCain on legislation calling for an analysis of the impact of sequestration across both defense and non-defense spending. And I’m hopeful that that information will help us bring the same spirit of bipartisanship to a balanced and bipartisan approach to replace those automatic cuts.
Because once again, I will not agree to a deal that throws middle-class families under the bus and forces them to bear this burden alone.
Unless Republicans end their commitment to protecting the rich above all else, our country is going to have to face the consequences of Republican intransigence.
This is about more than tackling our debt and deficit. It is about our nation. We cannot ignore this great challenge. We need to reign in the debt but it is not all that defines our budget.
Our budget and our nation will be defined by the scientists who come out of our schools, by the businesses that we create by our communities and our universities, our research, our development, our innovation, and we will be defined by the opportunities we afford to every one of our families and workers, by the fairness of our society and how we treat the most vulnerable among us.
When I go back home to Washington state, my constituents don’t come up and say they want the federal government to spend 18% of GDP or 20% or 25%. They tell me they want a strong school system for their kids. They want them to go to college if they want to. They want good jobs in their communities, safe roads. They want their government to be there for them when they need support getting back on their feet. In other words, they want government to do what it did for my family, what it’s done for millions of families for generations.
They do want us to tackle our debt and deficit. They certainly don’t want us to hand the bill to our kids. But they want it done in a balanced and fair way that doesn’t leave the middle-class holding the bag alone.
Those are the priorities that I will be pushing for when we vote on the tax cuts next week and in the weeks and months and years ahead. I believe that they reflect the American values that have carried our nation forward for generations and the vision that will continue our great nation’s leadership into the 21st century and beyond.
I know that Democrats are ready to go to work. We want to make a deal. We are ready compromise.
I’m personally willing to talk to anyone from either party who wants to solve this problem. And as soon as Republicans decide to work with us, I’m confident we could get to a balanced bipartisan deal that the American people expect and deserve.
- Murray.Senate.gov: Sen. Murray on budget debate
- Brookings Institution: Addressing the Nation’s Fiscal Crisis: A Conversation with Senator Patty Murray (D-Wash.)
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