[Congressional Record Volume 147, Number 74 (Friday, May 25, 2001)]
[Senate]
[Pages S5683-S5685]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         TAXES AND THE ECONOMY

  Ms. STABENOW. Mr. President, I rise to speak also about the tax cut 
proposal, about the debate on how to keep the economy going. I rise in 
great respect for my friend from Utah, who was successful in business, 
and lays out a prospective about how to keep the economy going.
  While I share his view that we need to be focused on a skilled 
workforce and that is critical to keeping our economy moving, he and I 
represent two different views of how best to do that. That is the 
debate going on in Washington now. I characterize it as a debate about 
whether or not the 1980s or the 1990s worked. I argue the bill that 
will come back--whether tonight, tomorrow, or next week--is a bill 
based on the notion that the economic policy of the 1980s worked. I 
argue from the Michigan standpoint, and anyone in Michigan, any 
families, businesses, farmers I represent, would indicate the 1980s 
were not a good time for Michigan. We had high unemployment, high 
interest rates. We saw massive debts both at the State and national 
level. It is the same kind of approach I fear will be happening today 
with the policies being laid out.
  No. 1 in the debate is how to give a tax cut. Is it supply side, as 
my colleague talked about?
  The proposal we are being asked to vote on is a very large tax cut, 
two-thirds to the upper income wage earners, those in the top 10 
percent. And

[[Page S5684]]

then we wait for it to trickle down. My folks in Michigan have been 
waiting for the tax cut of the 1980s to trickle down and hit their 
pocketbooks. Many have not seen it. We are being asked now to, once 
again, place it there. I am supportive and have voted for tax relief 
and will continue to do that. I prefer to do tax relief that goes 
directly into the pockets of the majority of Americans.
  Contrary to this tax cut, I believe we should eliminate the marriage 
penalty, not in 6 years, as in this bill, but now. Talk about unfair, 
that is extremely unfair. We are a country that values family and 
marriage. Yet we have a tax structure that unfairly penalizes those who 
are married. I support a proposal and did vote for a proposal to give 
relief now to married couples by eliminating that unfair tax penalty.
  There is a difference in approach. The approach being put forward 
says a very large supply-side tax cut will trickle down. Coupled, in 
the 1980s, with a very large increase in defense spending and not 
controlling other spending, what happened? We tripled the national 
debt, interest rates were at the highest level ever, and employment 
went down.
  In the 1990s we tried something different. Tough decisions were made. 
Revenue was put aside to pay down the national debt that had been 
tripled in the 1980s. We paid it down, slowed the rate of spending. We 
were able to make sure we were putting aside money for Social Security 
and Medicare and paying those dollars back instead of spending it on 
other programs. We were putting those dollars back and paying back 
Medicare and Social Security trust funds. We have had very tough 
decisions made to balance the budget.
  And we did something important in the 1990s. We focused on real 
investments in education, job training to get that skilled workforce, 
and in research, health research, technology research, developed the 
new technologies that when combined with an educated workforce would 
increase our labor productivity.
  It is a very different approach. We focused on growing the economy by 
investing in education, paying down our debt, investing in research and 
technology development, and balancing the budget.

  What happened? In the 1990s, high interest rates went down. We have 
seen home ownership up. In my State of Michigan, more and more young 
people and older people are able to have their own home, an important 
part of the American dream. We have seen unemployment, jobs, go up in 
the 1990s as a result of this approach to the economy. We saw budget 
deficits go down and the Federal deficit go down.
  This is a no-brainer. What do we want? The 1980s or 1990s? Yet what 
comes before us in the year 2001 is a set of proposals that takes us 
back to what happened in the 1980s. We are seeing a proposal that gives 
two-thirds of the tax cut to those at the very top, hoping it will 
trickle down.
  We know as soon as this bill passes there will be requests for very 
large increases in defense again, and other increases will come forth. 
To me, what is most intolerable, is the tax cut proposed spends $550 
billion of Medicare and Social Security to pay for it. That is not 
acceptable.
  Over the next 10 years, we are seeing a tax cut and budget proposals 
that spend Medicare and Social Security right before the baby boomers 
begin retiring in 11 years. There is no time to pay it back. We are 
going to be facing massive debt if that is the case. I am very 
concerned about that.
  Right now we are seeing the financial managers in the country, in the 
private sector, who are beginning to see it, as well. While short-term 
interest rates are going down, long-term high interest rates are going 
up in anticipation of the country going back into massive debt.
  I urge Members, it is not too late to stop this train, to put some 
brakes on it. I propose we create, as we did on this floor--we had an 
amendment we tried twice to pass--a budget trigger which says if the 
phase-in of the tax cut dips into Social Security and Medicare to pay 
for it, if we go back into debt, we will suspend that action, further 
tax cuts or spending, until the revenue comes in.
  In Michigan, we call that common sense. Don't spend it unless you 
have it. We believe fiscal responsibility, keeping the budget balanced, 
paying down the debt, protecting Social Security and Medicare are 
critical and should not be compromised for any other actions no matter 
how well intended. We have a train going down the track. My fear is 
there will be no budget trigger to stop the train before it goes off 
the track. That is common sense.
  We are going to be asked at some point to vote on a final budget 
proposal that spends Medicare and Social Security moneys for the 
future. When we look at the fundamental unfairness, we see that those 
who are most dependent on Social Security, most in need of Medicare 
health benefits, are those who receive little or nothing from the tax 
cut but their Social Security and Medicare, will help pay for it.
  It is not fair. It is just simply not fair. We have in front of us a 
proposal that kept us moving in the same policy track as the 1990s. I 
urge we still have time to consider that. It is a proposal that gives 
tax relief but makes sure we condition it upon using none of Social 
Security and Medicare and that we keep our commitment to fiscal 
responsibility and paying down our debt while we do it.
  The proposal I support also would put aside dollars for education to 
continue our ability to keep labor productivity going in our country. 
When we asked Chairman Greenspan at the Budget Committee hearing what 
was the one thing driving this economy, he said it was increased labor 
productivity. So why in the world would we be creating a situation 
where education funds are going to have to be cut and research funds 
and technology development will have to be cut in order to pay for the 
tax cut in front of us?
  I believe common sense would dictate we pay down the debt, we protect 
Medicare and Social Security, we give a major tax cut focused on our 
middle-income families and small businesses and family farmers, and 
that we can do that and also be able to continue investments to keep 
the economy going.
  This is the approach that worked. It is hard to argue with success. 
The policies in the 1990s were successful because of the hard work of 
both the private sector and the public sector to move us out of debt, 
to balance the budget, and to make investments in education and the 
economy.
  I hope we will take a deep breath and reconsider what is about to be 
done in the next few hours or the next few days. We can do better than 
that.
  Also, when we talk about putting money back in people's pockets, 
there are multiple ways to do that, all which I support, which we need 
to do and can do while being fiscally responsible. No. 1 is a tax cut. 
No. 2 is keeping interest rates down so your mortgage is down, as are 
your car payment and your student loan--those things are low enough for 
people to be able to afford those items for their families.
  Finally, for the senior citizen in this country who gets up in the 
morning and sits at the table and decides, do I eat today or get my 
medicine, which too many seniors are doing in the greatest country in 
the world, we can put money in their pockets by lowering the cost of 
prescription drugs. They will not see much of this tax cut, but they 
deserve some money in their pocket, too.
  If we do this right, if we use good old common sense, we can put 
forward a plan that keeps the economy going, puts money in people's 
pockets, and supports our families in a way that allows the economy to 
grow and prosper. We owe no less to our children.
  We can do better. It is time to take a second look at what we are 
doing.
  I yield my time.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mrs. FEINSTEIN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. FEINSTEIN. Mr. President, I ask unanimous request to be 
recognized as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The remarks of Mrs. Feinstein pertaining to the introduction of S. 
976 are located in today's Record under ``Introduction of Bills and 
Joint Resolutions.'')

[[Page S5685]]

  Mrs. FEINSTEIN. I thank the Chair. I yield the floor.

                          ____________________