[Congressional Record Volume 147, Number 26 (Thursday, March 1, 2001)]
[Senate]
[Pages S1732-S1734]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             FISCAL POLICY

  Mr. DORGAN. Mr. President, we will begin, following the President's 
State of the Union Address, hopefully a thoughtful and aggressive 
debate about this country's fiscal policy including tax cuts, the 
budget, and related matters.
  These are very important issues. I wish to speak about some of them 
today, not from the standpoint of politics or polls, but more from the 
standpoint of what I think the choices ought to be for this country's 
future. I know there is a heavy dose of politics surrounding all of 
this. That is not my interest. I am much more interested in trying to 
think through what would be good for this country, what is going to 
keep us on track for the next 5 and 10 years to provide an economy that 
expands and provides jobs and opportunities for our children and their 
children.
  Having said that, I want to make a couple of comments to set the 
stage for where we are.
  There are a lot of people who continually complain about this 
country, and it is hard to complain about this country with a straight 
face. This is the most remarkable place on the face of the Earth. We 
are the country that created a system of public education, saying to 
every child in this country: You can go to school and be whatever you 
want to be. We are not going to move you off in one direction or the 
other. Universal education.
  It is us, our country, that has spawned an educational system that 
has created the scientists, engineers, and the thinkers. We split the 
atom and spliced genes. We have cloned animals. We invented the silicon 
chip and radar. We built television sets, the telephone, and computers. 
We built airplanes and learned to fly them. We built rockets and flew 
them all the way to the Moon. We cured small pox and polio. That is us; 
that is what we have done in this country. What a remarkable place in 
which to live.
  We are also a country that in all of my adult lifetime, and the adult 
lifetime of most of the people who serve in this Congress, have had two 
enduring truths underlining everything else we have done. One of those 
truths is we were involved in a cold war with the Soviet Union, and 
that affected virtually everything we did, including the choices we 
made in this country in fiscal policy. The second enduring truth is we 
had a budget that seemed to produce deficits that every year grew 
larger and larger.
  Those two truths which underlined virtually everything else we did in 
our lifetimes are now gone. There is no Soviet Union, there is no cold 
war, and there are no budget deficits. Everything has changed, and the 
result is a different kind of economy in this country in which we have 
surpluses. The question is what to do with these surpluses.
  My great concern as a policymaker, not from the standpoint of someone 
who represents a political party, is that we not make the mistake we 
made before.
  Twenty years ago this country embarked on a fiscal policy advocated 
by a President who said we can do the following: We can double our 
spending on defense, because then we were in the middle of a cold war 
with the Soviets; we can double our spending on defense; and we can 
have a very substantial tax cut, and it will all add up to a balanced 
budget.
  In fact, it did not. It added up to trillions of dollars of Federal 
debt that then marched toward $5.7 trillion of Federal indebtedness in 
this country.
  Let us not make that same mistake again. The author Russell Hoban 
said:

       If the past cannot teach the present, if a father cannot 
     teach the son, then history need not have bothered to go on, 
     and the world has wasted a great deal of time.

  Let us learn from the past. Let us learn the lessons of the past in 
fiscal policy.
  What does that mean for us with respect to these surpluses and with 
respect to proposed tax cuts and budgets?
  Let me speak first about uncertainty. Nine months ago, Alan 
Greenspan--who is canonized in a new book, the American soothsayer, the 
economist who knows all and sees all--said our economy was growing way 
too fast and he needed to slow it down. Think of that. Nine months ago 
our economy was growing too rapidly, according to Alan Greenspan and 
the Federal Reserve Board. Nine months later, we are wondering whether 
we might be nearing a recession. Certainly, the economic growth rate 
has now dropped to near zero.

  My point is this: If we can't see 9 months in advance, and the 
Federal

[[Page S1733]]

Reserve Board could not, how can we then believe we can see 3 years, 5 
years, 7 years, or 10 years ahead in terms of economic prosperity that 
would allow us to say there is enough surplus available to provide a 
very large permanent tax cut without providing substantial risk that 
will put this country right back in the same deficit ditch we were in 
for so long? The answer is, we cannot provide that assurance.
  This is faith-based economic forecasting, nothing more, nothing less. 
No one knows what will happen in this country's future. We hope what 
happens is continued prosperity, economic growth without a recession. 
That is what we hope happens. But having both studied economics and 
taught economics, I understand no one has repealed the business cycle. 
There is inevitably an expansion and a contraction. We provide the 
stabilizers that tend to even those out just a bit, but no one has been 
able to repeal the business cycle. The uncertainty with respect to 
economic forecasting ought to lead us to be cautious.
  Now the President proposes a $1.6 trillion tax cut. The actual 
numbers are closer to $2.6 trillion when you add up what needs to be 
done in order to implement his tax cut. It is not a difficult 
proposition to say to the American people: What I would like to provide 
for you is a tax cut. That is not difficult. Most people feel they are 
overtaxed. Most people want a tax cut. I also feel most people want a 
country that produces an expanding economy with the jobs and 
opportunity that comes with it.
  Let me describe what I believe makes this economy work. It is not 
like the engine room of a ship of state where there are dials and knobs 
and levers and you have a bunch of folks with green hats who are down 
there dialing these things up just right--tax cuts here, M1b over here, 
velocity buddy over here, spending over here--and you get all the knobs 
and dials adjusted just right and the ship of state moves along 
effortlessly. That is not what moves the ship of state. It is 
confidence.
  When the American people have confidence in the future, they make 
decisions and do things that represent that confidence. They buy cars, 
homes, and they do things that move the economy forward, producing jobs 
and opportunity.
  When they are not confident, they withhold those judgments. They 
decide they can't afford to buy a car, they can't afford to buy a home, 
they will defer this purchase and the economy contracts. It is as 
simple as that, nothing more than a mattress of confidence upon which 
the economy rests.
  The reason it turned around in 1992 and 1993, after the 1993 economic 
proposal that passed by one vote in the House and the Senate, was 
because people finally felt the Congress was serious about putting this 
country on track and getting rid of the budget deficits that became the 
growing tumor in this country's annual budget. So people had confidence 
about that and confidence in the future and we had this unprecedented 
lengthy economic expansion.
  My fear is if we lock in place a tax cut that is enormously uncertain 
in terms of its consequences with respect to future deficits, that we 
will lose the confidence of the American people.
  Let me be clear, I believe there is room for a tax cut. That is not 
what is at debate here. Republicans and Democrats both believe there 
can and should be a tax cut with this surplus. I also believe, however, 
the tax cut ought not be of such a size that it threatens our economic 
expansion. And I believe that a tax cut is part of a series of things 
that represents priorities in this country's economy.

  We should, with a surplus, not only provide a tax cut, but we should 
as a priority also begin to pay down the Federal debt in a significant 
way. If during tough times you run up the Federal debt, during good 
times you have a responsibility to pay it down.
  So reducing the Federal debt, $5.7 trillion to be exact, that was run 
up during tougher times and during periods when fiscal policy was not 
working, that ought to be paid down with part of that surplus. That 
ought to be a priority. Then let's have a tax cut. Especially let's 
have a tax cut that is fair.
  Some say when you criticize the proposed tax cut offered to us by the 
present administration as being unfair, you are engaged in class 
warfare. Nonsense. It is well within our right to talk about what kind 
of tax cut ought to be proposed that is fair to all Americans.
  Let me give an example. We have a range of taxes that are paid by the 
American people every year. Roughly $1 trillion in individual income 
taxes is paid by individual workers across this country. Roughly $650 
billion in payroll taxes is paid by people who are working on jobs 
every day and every night across this country. The top 1 percent of the 
American income earners pay 21 percent of the total federal taxes. But 
the President has sent us a proposed tax cut that says the top 1 
percent should get 43 percent of the tax cut.
  Let me say that again: The top 1 percent of the income earners pay 21 
percent of the taxes, and the President proposes they should get 43 
percent of the tax cut. I say that doesn't make any sense. That is not 
fair. And others say, well, gee you are involved in class warfare. 
Nonsense.
  Sigmund Freud's grandson had something to say about this. He said: 
When you hit someone over the head with a book and get a hollow sound, 
it doesn't mean the book is empty. Facts are facts. Facts are sometimes 
stubborn. The proposed tax cut will have an overwhelming advantage for 
the highest income earners in the country and provide far too little 
for working families. That is just a fact.
  There is kind of a breathless quality to those who advocate this tax 
cut of $1.6 trillion or actually $2.6 trillion. There is an old saying: 
Never buy something from somebody who is out of breath.
  We should do a tax cut. But it should be part of a set of priorities 
of paying down the Federal debt; providing a tax cut that is fair to 
all Americans, especially working families in this country; and, third, 
also recognizing there are other things we need to do that represent 
priorities.
  What are those priorities? Among those priorities are to provide a 
prescription drug benefit in the Medicare program. We all know we need 
to do that. There isn't any question that if we had a Medicare program 
being created today, we would have a prescription drug benefit in that 
program. All of us have had the experience of someone coming up to us 
at a town meeting. I recall a meeting one evening in northern North 
Dakota. A woman came up to me, probably close to 80 years old, and 
grabbed me by the arm and said: Senator Dorgan and her eyes began to 
fill with tears and her chin began to quiver--I take several kinds of 
medicine for heart disease and diabetes, and I can't afford them. I 
can't pay the bills anymore. Yet I need that medicine to extend my 
life. What do I do?

  All of us have had that experience. We know we need to put a 
prescription drug program in the Medicare program. We know that ought 
to be a priority as well.
  Education is a priority. We know what has made this country great, in 
part, is a public education system available to all children to become 
the best they can be, wherever they are, no matter their circumstance 
in life. We know that has contributed to the significance of this 
country's growth and opportunity.
  How do we do that if it is not a priority to say we want to fix 
schools that are in serious disrepair? We can help do that. We want to 
reduce class size. We know it is easier to teach children in a class 
size of 15 kids than a class size of 32 kids. We know kids learn better 
in well-equipped classrooms rather than in some adjunct trailer in 
which you have stuck 30 kids with an inch between desks and a teacher 
trying to deal with all of them. That is a priority, as well.
  Another priority for me is family farmers. We have a great many 
family farmers in North Dakota struggling mightily to try to stay on 
the farm. That is a priority. Grain prices have collapsed. Our farmers 
are told by the grain market that the food they produce has no value. 
What on Earth can we be thinking of? Has no value? Five hundred million 
people will go to bed with an ache in their belly in this world because 
it hurts to be hungry, and a farmer harvests grain and hauls it to the 
elevator to be told, ``your food has no value.'' There is something

[[Page S1734]]

dreadfully wrong with that. This country would want, it seems to me, to 
create and maintain a network of family farmers for this country's 
security interests, if for no other reason, but from my own view, we 
want to do that because it enriches our country to have a broad network 
of food production all across our country. Yet families are discovering 
they are losing their heritage on the family farm.

  A friend of mine is an auctioneer. He said he was doing an auction 
sale one day, and a little boy came up at the end of the auction sale, 
and he had tears in his eyes. He was about 10 years old. He grabbed my 
friend by the leg. He was very distraught. The auctioneer tried to 
comfort him, and this little boy said to him: You sold my father's 
tractor.
  He patted him on the shoulder, and he tried to comfort him some more, 
and the little boy said: I wanted to drive that tractor when I got big.
  So that is a priority for me, family farmers.
  My point is this. When we talk about having a budget policy, we 
cannot just have one central piece that says, here is what we want to 
do, to the exclusion of every other thing. That is not what made this 
country a great country in which to live.
  Those of us who believe strongly that we ought to have a balanced 
fiscal policy believe we should avoid the mistake we made in the past, 
and that is believing that numbers that inherently don't add up do add 
up. We know better than that. We all took math and algebra. We 
understand what adds up. This proposal that has come to this Congress 
with a budget and a tax plan is well over $1 trillion short. It does 
not take a genius to see that. It is well over $1 trillion short of 
adding up. Yet everyone will walk around here, pretending this adds up. 
You would fail fourth-grade math believing that.
  So first, it ought to add up--not for the purposes of helping one 
political party or another. That doesn't matter so much to me. It ought 
to add up for the benefit of this country's future. We need to keep 
this country on track. We need to continue an economy that provides 
jobs and opportunity ahead.
  How will we do that? By encouraging and maintaining the confidence of 
the American people that we are doing the right thing. Most of the 
American people, I think, believe the right thing is, during good 
times, help pay down the Federal debt with some of that surplus: You 
ran it up in tougher times; pay it down in better times.
  Second, yes, have a tax cut and make it fair to everybody.
  Third, yes, there are other priorities as well. Pay some attention to 
them. If you want to talk about education, then pay attention to 
education and make some investments that will make our schools better 
schools. If you want to talk about prescription drug prices and helping 
senior citizens, then if both parties say let's do a prescription drug 
plan in Medicare, do it, and have the money to pay for it.
  If you want to talk about the family farm and say it is important and 
is not just some little old diner that got left behind when the 
interstate came through, if you really believe family farmers are 
important, then decide you want to do something for them and help them 
during tough times. Those are priorities as well.
  Simply put, my point is we have a lot to be thankful for in this 
country. Nobody lives in a better place on the face of this Earth. It 
is not an accident that we are here. As stewards of this country's 
legacy and its future, we as policymakers need to come together and 
engage in some cooperation on these things.
  I am not someone who believes if we break out into full-scale debate, 
that is a bad thing for the country. People ask me from time to time, 
how are you getting along with 50 Senators on the Democratic side and 
50 Senators on the Republican side? It is as if they are afraid we are 
going to have a debate. Look, a debate is what this country is about. 
There is the old saying, when everyone in the room is thinking the same 
thing, nobody is thinking very much.

  This entire body is about debate. There is nothing wrong with 
aggressive, robust debate. In fact, that is the only way we get the 
best of what everyone has to offer. So we are going to have some 
significant, aggressive debates. And we should. I hope at the end of 
this debate good thinkers on all sides, from both political parties 
represented here in the Senate, will agree with me that it doesn't 
matter what the polls say, it doesn't matter what the politics are; 
what matters is that we do the right thing to keep this country on 
track, that we do the right thing to keep this country growing and to 
have this country provide the opportunities we want it to provide for 
our children and their children.
  What we have inherited is not accidental. Those who came before us 
have struggled mightily to do the right thing. In some cases, it wasn't 
the popular thing but it was the right thing. We have a responsibility 
to accept this opportunity given to us to do the right thing as well.
  I say to our new President, his Address to Congress, I think, dealt 
with a number of significant and important issues. On some of them, I 
will be supportive. On others, I will be a fierce opponent. But I hope, 
as we think through all of these issues, we can understand what the 
public interest is--not the party interest.
  The decisions we make in this Chamber could well affect this country 
5, 10, and 25 years from now. If we put this country on the wrong 
course and throw this economy back into growing, choking, heavy 
deficits year after year after year, it will once again be one of the 
enduring truths of the political life and the public life of everyone 
who comes after us in this Chamber; it will be one of the enduring 
truths that serves as a backdrop for every other decision that is made 
for the next 5, 10, and 25 years.
  We were able, as I said when we started, to shed the yoke of those 
two enduring truths that cost us so much. The cold war? The Soviet 
Union is gone. That was a backdrop for virtually everything we did for 
many years. That is behind us. The growing budget deficits that 
represented a cancer in this country's budget--they are gone. They 
affected virtually everything we did in this Chamber for many years. 
That is a blessing. Those enduring truths have changed.
  So let us make decisions now that do not re-create those liabilities 
for those who follow us. Let's make decisions that put this country on 
track to a much better and brighter future that is sustained for the 
long term.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Ms. STABENOW. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Michigan is recognized.
  Ms. STABENOW. Thank you very much. I ask unanimous consent to speak 
in morning business for 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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