I rise today frustrated, embarrassed, and angry. It’s absolutely inexcusable that all of us find ourselves in this place at this time; standing on the floor of the Senate in front of the American people, hours before we plunge off the fiscal cliff, with no plan and no apparent hope. But here we are, and we’ve got to do something.
If we’re as determined to go over the cliff as we seem, we’ve got to do something to soften the landing, because at the bottom of the fiscal cliff are immediate and massive tax increases, deep and indiscriminate spending cuts, and the risk of another recession.
So as we come down to the final hours, we have two choices – to do nothing and cause an unbelievable amount of hardship for our fellow Americans or to do something to reduce the suffering inflicted on our citizens by an inflexible political system.
I choose to do something. So today I’m introducing the CALM Act, which stands for Cliff Alleviation at the Last Minute.
The CALM Act will do three important things – 1. It will soften the financial blow of the fiscal cliff. 2. It will calm our financial markets. 3. It gives us the certainty of a plan now, but allows us, if we ever find the courage, to pursue the fiscal grand bargain that has eluded us so far.
Make no mistake, the financial markets are watching us and they’re getting more nervous by the hour. We need to reassure them that we’re capable of making big financial decisions.
This bill, the CALM ACT, is not something that I am excited about or proud to offer. This is not a great plan, merely a better plan than going over the cliff. It should never have come to this.
We’ve known for more than a year that this day was coming. For more than a year, I have asked Congress for a “big fix” to our nation’s fiscal challenges. I have pushed strongly for the Simpson-Bowles framework for deficit reduction. And yet, here we are – no closer to a sensible decision on how to bring our $1.1 trillion budget deficit and our $16.1 trillion public debt under control.
Well, time’s up. No more games. No more excuses. No more kicking the can down the road. We have to act and we have to act in a way that puts our fiscal house in order, reassures the financial markets, and puts people ahead of politics. And we have to deal with these tax increases and spending cuts in a humane and tolerable way. The CALM Act does all that.
Just look at what happens to people in need if we go over the cliff and just do nothing. On New Year’s Day, the lowest income tax rate will jump from 10 percent back to the Clinton era rate of 15 percent. That’s a pretty big financial bite for people who are struggling right now.
Instead of overnight tax hikes of five percent, the CALM Act smooths the transition by phasing in increases over three years. So instead of a five percent increase, they’ll only have to bear a 1.6 percent increase in the first year.
The CALM Act does the same with the other tax rates, phasing them in over three years under the same proportions.
But the CALM Act also puts the Senate on record in support of comprehensive overhaul of our tax system. We can still work towards a “big fix” like the Simpson-Bowles framework. And if we can do that next year, we could stop the full increase from ever occurring at all.
Another important feature of the CALM Act is the way it treats sequestration. Again, if we go over the fiscal cliff and do nothing, nearly every government program will be hit with the same percentage cut. And that includes social services, education, research and infrastructure; all the things we need to grow our fragile economy.
The CALM Act gives the Office of Management and Budget discretion and flexibility to recommend what programs, agencies and accounts to cut. If OMB fails to do the job, then the sequestration across-the-board cuts kick back in. Of course, the final word rests with Congress. OMB’s decisions can be overridden by a joint resolution.
Every provision of the CALM Act is familiar to the Senate. In fact, at one time or another, nearly every feature of this plan has been offered by both Republicans and Democrats, including President Obama and Speaker Boehner. All I’ve done is pull them together to offer them as a compassionate alternative to what happens if we go over the fiscal cliff.
True, from the very beginning, I have favored a comprehensive solution to put our fiscal house in order, something along the lines of the Bowles-Simpson plan. We don’t have that luxury now. But perhaps the CALM Act will not only soften the blow of the fiscal cliff but also give us a sense of urgency about a grand bargain to repair our fiscal house.
I’m not so naïve as to believe everybody is going to check their politics at the door, even at this late hour. But this is not a time for political bickering or partisan games. To allow the country to plunge over the fiscal cliff, without any alternative plans to soften the landing, is completely unacceptable.
I can’t think of anything more irresponsible than to let this great country go over the fiscal cliff – to play games with the lives of Americans in such a callous way, to jeopardize the financial standing of our country, and to alarm our financial markets in ways that could trigger another recession.
Something has gone terribly wrong when the biggest threat to the American economy is the American Congress.
It doesn’t have to be that way. I’m putting something on the table that is fair and balanced. It includes a slow phase in of tax increases. It includes targeted spending decreases. And it moves us closer to tax reforms. Everybody helps. And we do it in a way that keeps our country strong and prosperous.
This is one of those moments that the Senate was intended to live up to – to provide leadership, to find common ground, to level with the American people, and to be honest with each other. With our debt continuing to soar and too many Americans still looking for jobs, these are times that demand the very best of the Senate.
Everywhere in West Virginia – and, in fact, all over the country – families are making tough choices about how to make ends meet. It’s time for Washington to do the same.
Here in the Senate, it seems to me that we’re always fighting about something. That might not change any time soon. But more often than not, I believe we can rise to the common ground of great national purpose. And I believe with all my heart that this is one of those times.