Mr. President, it is hard to imagine we are a little over 24 hours away from going over the so-called fiscal cliff, which occurs at midnight on December 31--tomorrow. This cliff is self-imposed. It is a penalty we voted for if we fail to deal with the deficit our Nation faces. Unfortunately, as of this moment, we have not reached an agreement to avoid it. I haven't given up hope. Conversations and negotiations continue all through this day and I am sure into tomorrow, and I hope by the end of tomorrow night we can celebrate the end of this year and the beginning of a new year with good news for the American people.
This is exactly the wrong time for us to go over this cliff. We are in the midst of an economic recovery. We are seeing new job creation. Businesses are seeing new growth. We are seeing the kind of economic indicators we have been waiting for, for years. Going over the cliff is going to bring uncertainty to our markets and, with that uncertainty, a pullback in consumer confidence and a reduction, I am afraid, in business activity and in the creation of new jobs.
There are sensible ways to avoid it. The President has suggested one. In addition to spending cuts, we need to increase revenue to reduce our deficit. The President said let's have the tax rates which applied during the Clinton administration--a time of great economic expansion--apply to those making over $250,000 a year. That is only 2 percent of the population, but it generates hundreds of billions of dollars in savings over a 10-year period of time. There has been resistance from the other side of the aisle, and we are in active negotiation with the Republicans now as to what we can do to raise revenue to reduce our deficit.
We are also talking about some other elements that trouble me. One of them is the estate tax. The estate tax is a tax paid by very few Americans. Less than 1 percent of those who die each year pay anything to the Federal Government on their estates because most people don't have an estate large enough to qualify for estate tax liability.
There was a long debate for many years on this issue, and Frank Luntz and some of the Republican advisers masterfully came up with this term the ``death tax'' and they created this impression among a lot of people that this tax--the estate tax or death tax--would be imposed on virtually everyone. In fact, when I went to O'Hare Airport once to check in curbside, where people can do that, one of the United Airlines attendants took my baggage, saw the name tag on it, and said: Senator, please do something and protect me from the death tax. I wanted to stop and tell this hard-working gentleman he would have to win the lottery to pay the death tax, as he called it. It is reserved for a small number of people in this country who have done very well in life and end up paying a tax ultimately on the increase in value of many of the assets they bought during the course of their life.
Having said that, it has become part of our deficit negotiation. I am troubled by the notion we are somehow going to give a tax break to some 6,000 very fortunate Americans and incur a new expense for our Federal Government of some $130 billion or $140 billion in the process. What are we thinking? At a time when we have to try to bring together the resources to reduce our deficit, why would we want to give a new bonus break for the wealthiest people in this country when it comes to the estate tax? That, to me, would be a step backward. I hope we aren't forced into any agreement that includes it, although I stand here knowing full well if there is an ultimate compromise, there will be parts of it I find disgusting and reprehensible which I may have to swallow in the name of finding a compromise that will avoid this fiscal cliff. That is the nature of a political compromise. I hope that one isn't included, but it may be.
In addition, we have to do things that are important for this economy and one of the most important is to make sure we extend unemployment benefits for the long-term unemployed. If we don't act and act quickly, 2 million Americans will lose their unemployment benefits tomorrow--2 million. These people are literally struggling to get by and keep their families together while they look for a job. We should make sure this stimulus--the money for unemployed families--continues, so while they are trying to find a job or, in fact, going through new education and training, they have a helping hand. That is who we are as Americans and we ought to include it in any package that avoids this fiscal cliff.
Beyond that, there is much work that needs to be done beyond the fiscal cliff. This negotiation does not go deeply into deficit reduction, and I think we need to. I was a member of the Simpson-Bowles Commission. I salute my colleague Kent Conrad of North Dakota, who is retiring in just a few days, for his amazing leadership in bringing us to this moment in this national debate, but we still have much work to do, and I am sorry Kent will not be here to be personally part of it. I have viewed him as an almost irreplaceable resource in this debate. He knows more about our Federal budget and the deficit challenge we face than any Member of Congress, period. All the rest of us have learned so much from him, and we are certainly going to miss him.
We need to continue this effort he started to reduce the deficit. We need to look seriously at our entitlement programs so at the end of the day we meet our obligation to future generations. Social Security is solvent for 20 years. We should make it solvent for 75, and we can do it; if we face it today, we can do it. I think we ought to have a separate commission taking a look at this challenge, reporting back to Congress and entertaining alternatives and substitutes on the floor that are certified to meet the same goal. That is important.
We also know in 12 years Medicare will not have the resources it needs to meet its obligations. Forty or 50 million Americans depend on it, literally, for their life-and-death issues when it comes to health care. We need to work on that immediately to deal with reducing the cost of Medicare while still protecting the integrity and promise of that amazing program that has served us so well for almost 50 years.
We have a challenge ahead of us. First, let's work together on a bipartisan basis to try to avoid this fiscal cliff; if we cannot, let's work as quickly as we can to get back on our feet, on a bipartisan basis, and come up with an agreement that moves our economy forward. Finally, let's deal with deficit reduction and long-term entitlement reform. That is part of our obligation.
I spoke to our Senate Democratic caucus a little earlier today about the terrible problems we face in Illinois, with one of the lowest credit ratings in the Nation, primarily because our pension systems are underfunded. For more than four decades, Republican and Democratic Governors have ignored the challenge, as have many leaders in our general assembly. And now the responsibility falls on this generation of leaders to try to deal with a vexing situation where it would take literally one-third of our State budget to meet the unfunded liabilities of our pension systems.
We cannot let that happen at the Federal level. Whether it is Social Security or Medicare, we need to make the thoughtful choices, the thoughtful advances in these programs today that protect them for generations to come.
Mr. President, I yield the floor.