[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
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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
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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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