[Congressional Record Volume 147, Number 143 (Wednesday, October 24, 2001)]
[Senate]
[Pages S10908-S10911]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     THE ECONOMIC STIMULUS PACKAGE

  Mr. KENNEDY. Mr. President, since September 11, the courageous acts 
of countless Americans have set a new standard for the Nation. As the 
whole world watched the horror on television, it also witnessed what is 
best in our country and our character. As buildings collapsed, the 
American spirit soared.
  The indelible images of the first days will live on in all the days 
of our history. Firefighters and police risked their lives and gave 
their lives to save others, and hundreds of rescuers paid the ultimate 
price. The brave passengers of flight 93 fought and defied the 
terrorists, and in the face of their own inevitable death, they 
prevented the killing of so many others.
  Construction and health workers went into the shadow of constant 
danger to search for the missing and help the survivors. The mayor of 
New York City went everywhere sustaining the city. New Yorkers lined up 
for blocks to give blood, and so did thousands more across the country. 
Hundreds of millions of dollars poured in for the families of the 
victims, as valiantly, tearfully, and quietly they said goodbye to a 
mother, father, son, daughter, or friend in funeral after funeral.
  And through it all Americans have begun to think deeply about our 
country again. We have a new sense of the precious nature of our 
freedom which, in the years after the cold war, we have increasingly 
taken for granted. We have learned anew to prize the experiment called 
America--a nation based not on sameness, but on diversity--a nation of 
different races, backgrounds, and faiths, defined not by an accident of 
geography or history, but by the high aspirations for a better life and 
greater opportunity that brought so many millions to these shores from 
every continent and country on the Earth.
  Now, we have seen, perhaps more clearly than ever before in our 
lives, how we are all in this together--how, if even one of us is 
hurting all of us hurt. Our first thoughts on September 11 were about 
others, not ourselves.
  That spirit must now live on. It is the new standard by which we must 
measure everything we do.
  Today, brave young Americans are on the front lines of the fight for 
freedom from fear. Here at home, we must stand together to face and 
defeat the terrorists who would poison our people, panic our society, 
and paralyze our democracy. An essential point of protecting our 
homefront is protecting our economy--because the state of our Union 
cannot be strong, if the state of our economy is weak.
  We need to speak honestly and directly about the choices we face--and 
we need to do so in the same spirit which has rallied Americans sine 
September 11. The standard is clear--to seek what is right for our 
country, and not just for ourselves; not to strive for private 
advantage in a time of national need. And that standard should be 
bipartisan--not the false bipartisanship of merely going along, but 
true bipartisanship, which is a two-way street, where we genuinely seek 
and respectfully debate what course is best for our economy, for 
rebuilding and restoring, and especially for all those who have been 
hurt in the downturn. As President Bush eloquently said when he spoke 
to the Congress. ``We will come together to strengthen America's 
economy, and put our people back to work.'' Now all of us, in both 
parties, in both Congress and the administration, must live up to that 
all important responsibility.
  Fundamentally, this, too, is a question of national security. For a 
strong economy is the basis of a strong Nation. It assures opportunity 
for all. It is the foundation of a decent and free society at home, 
without which we cannot fight for decent and free societies abroad.
  Before September 11, the Nation's economy was already weakening. The 
unemployment rate had been climbing for months. Relatively few new jobs 
were being created. Companies were announcing successive rounds of 
layoffs. Business investment was being drastically reduced, and profits 
were rapidly falling.

[[Page S10909]]

  Many economists believed we were in a recession, or that a recession 
was inevitable. And then came September 11, which was an attack not 
just on our cities and citizens, but on the entire American economy. No 
one can truly weigh the loss of life. But the loss of property amounts 
to tens of billions of dollars. We can redress that, and we will. But 
the loss and the risk went far beyond Ground Zero--in New York or at 
the Pentagon.
  Americans stopped flying and stopped buying. Corporations put 
investment decisions on hold. Hundreds of thousands lost their jobs in 
companies across the economy, from airlines and hotels, to restaurants, 
retailers, and manufacturers of high-technology equipment.
  Never before has it been so clear how inter-connected our society is. 
Two buildings go down tragically in New York City, and the entire 
economy suffers across the land. Economic models do not account for 
this. The most important of all our resources, our national confidence, 
has been more damaged than anyone initially realized.
  It is crucial to recognize that once underway, a recession has no 
clear bottom. Unless we respond, it can spiral downward out of control, 
raising unemployment to higher and higher levels, and sharply reducing 
the flow of revenues for both government and business.
  Consider this: Americans on average were saving very little of their 
income before September 11. If they now increase their savings by only 
1 percent because they are afraid to spend, they will withdraw more 
than $100 billion from the economy. It is not enough just to tell 
people to go out and spend and live normal lives. This is an 
extraordinary time--and we cannot talk the economy out of recession. 
Congress must act.
  This week, as the Senate and the House continue the very important 
debate on what must be done to revive our economy, there is at least 
one overriding principle on which Republicans and Democrats both agree: 
Urgent action is required.
  We all know that cutting interest rates is the first line of defense 
in a downturn. But we also know that in this time of clear and present 
danger, lower interest rates alone cannot reverse the decline in 
confidence, consumer spending, and business investment. Consumers and 
companies will not buy more and invest more in a time of great 
uncertainty simply because borrowing costs are lower.
  We need a direct and sizable injection of resources by government to 
stimulate the economy.
  But if we do this in the wrong way, a stimulus package could actually 
harm the economy. Some would rely almost exclusively on permanent tax 
cuts that will do little or nothing to promote growth when we need it 
most--which is right now. Their proposals are neither fair nor will 
they work. They do not measure up to the new and honest standard of 
this time. A true stimulus package cannot be a disguise for special 
interests.

  Nor can it run the risk of imposing large new long-term deficits on 
the Federal budget. Permanent new tax cuts--on top of nearly $2 
trillion in tax cuts enacted earlier this year--would actually hurt the 
economy by increasing the cost of long-term borrowing. Such cuts would 
deter the kind of business investments we need most.
  Instead, a true economic stimulus program for our time must meet 
three criteria:
  First, it must have an immediate impact on the economy. Every dollar 
of the stimulus package must be spent in the economy as soon as 
possible. The best way to accomplish this goal is to target the dollars 
to the low- and moderate-income families who are most certain to spend, 
rather than save it. When it is spent, its impact will be multiplied as 
it flows from consumers to business and back to workers. In fact, every 
dollar given to unemployed workers in unemployment insurance payments 
expands the economy by $2.15.
  Second, all the tax cuts and spending provisions in the plan must be 
temporary. They must focus on the immediate need to generate economic 
activity. They must not impose substantial new long-term costs on the 
Federal budget.
  Third, the package must be fair and compassionate. It must focus on 
those who need and deserve the help, who are suffering the most in 
these difficult days. It must reflect the renewed spirit of taking care 
of each other. Let us here in Congress set a standard for our work 
equal to that set by so many after September 11. Leave no American 
behind--no victim of the terrorist attack, and no victim of its 
economic aftershocks.
  The House Republicans have proposed a stimulus package that fails all 
three of these criteria. Sadly, this House Ways and Means Committee 
proposal does not rise to the higher standard required in this time of 
national crisis. It fails the economy. It merely repackages old, 
partisan, unfair, permanent tax breaks, which were rejected by Congress 
last spring, under the new label of economic stimulus. The American 
people deserve better.
  The long-term cost of the House plan is much too high. More than half 
of the dollars would not even reach the economy for more than a year. 
The stimulus is needed now--not in 2003, 2004, or later. The House 
package spends $46 billion on permanent new tax breaks for 
multinational corporations and large businesses. It gives many large 
businesses a $25 billion windfall, not only by permanently repealing 
the corporate minimum tax, but also by refunding the minimum taxes 
already paid by them over the past 15 years. It also permanently 
reduces the tax on capital gains. It provides $60 billion in permanent 
new tax cuts for upper income taxpayers--only a small percentage of 
which would even go into the economy in the next year.
  The wealthy individuals and big businesses that would receive these 
tax breaks will not spend most of the windfall. They will save it. 
Corporations will not invest more unless business itself improves. We 
cannot afford to waste valuable Federal dollars in ways that will not 
have a full and immediate impact on economic growth.
  The House package also runs a grave risk of frightening financial 
markets and driving long-term interest rates up, because investors will 
expect future federal deficits to rise as a result of additional, 
permanent and unaffordable tax cuts. Already, mortgage rates have 
stayed stubbornly high in response to the tax bill passed earlier this 
year.
  The House proposal is plainly unfair. In contrast to more than $115 
billion in permanent new tax cuts for wealthy individuals and 
corporations, it provides less than $14 billion in tax cuts for lower 
and moderate-income families. While the tax cuts for these corporations 
and wealthy individuals are permanent, the cuts for working families 
are limited to just one year.
  After passing nearly $2 trillion in tax cuts heavily slanted to the 
richest taxpayers 4 months ago, it is wrong to give the wealthy still 
more tax breaks when there is a better, more effective way to move the 
economy. It makes no sense to offer indiscriminate long-term tax 
breaks, when what is needed are realistic incentives to invest now. 
And, if this Congress chooses to violate that basic stimulus principle, 
it would be grossly irresponsible and grossly unfair not to include the 
fair increase in the minimum wage that has been delayed for too long 
already.
  The new standard set by September 11 calls for a new course of 
action--one that places national need above personal interests, one 
that will truly stimulate our economy. We need a Government stimulus 
package of $71 billion, a package of targeted and effective support for 
middle and lower income working families that would be immediate, 
temporary, and fair, and that should include the following essential 
steps:
  We must immediately extend unemployment insurance coverage an 
additional 13 weeks. The unemployed are on the front line of the 
economic battle, and they will spend their money immediately.
  We must also extend unemployment insurance coverage to part-time and 
low-wage workers, who often do not qualify for any benefits at all, and 
who can least afford to lose their wages.
  We must raise unemployment benefits by 15 percent for all workers. An 
average payment of $230 a week is not enough.
  We must add $2 billion to job training programs to help workers 
prepare for and find new jobs.

[[Page S10910]]

  These changes will cost $18 billion, but an economy returning to 
prosperity will more than repay the expense.
  We must protect health insurance for working families by having the 
Federal Government cover 75 percent of the cost of insurance premiums 
for 12 months after a worker loses a job. We must also support coverage 
for workers who do not qualify for such a plan. We know that when 
workers lose their jobs, they lose their health insurance, too.
  This program would provide an additional $17 billion of stimulus that 
will help keep the health care sector strong while keeping our workers 
healthy.
  These elements--unemployment insurance, job training and health 
coverage for workers between jobs--are essential to any economic 
stimulus plan, which is why Senator Baucus and I have come together to 
propose these key changes to help workers get their feet back on the 
ground.
  In addition to the Baucus proposal, an economic stimulus plan must 
add $5 billion to help our communities: $2 billion to food stamps and 
WIC, $1 billion to heating assistance for families, and additional 
funds for expanded community service and opportunities for voluntarism.
  We must also invest more now in the public works that will expand 
employment and stimulate the economy. As we make public buildings, 
airports, and our water supply more secure, we must also build and 
modernize schools, rail lines, and infrastructure. I propose a new, $10 
billion investment for these vital national purposes: $3 billion for 
highways and bridges; $3 billion for drinking water and wastewater 
treatment systems; $3 billion for school safety and construction; and 
$1 billion for our railways and mass transit systems.
  In addition, it will not do much good to spend more at the Federal 
level if there are significant cutbacks at the State and local level. 
We do not want State and local governments, most of which have annual 
balanced budget requirements, to be forced to either raise taxes or cut 
essential services. Any such steps would be counterproductive at this 
critical time.
  We are seeing State cuts in Medicaid, child care, job training, 
education, and transportation. Tennessee officials have proposed cuts 
that could cause 180,000 people to lose health insurance. Florida is 
debating a reduction in coverage for its medically needy population 
under Medicaid. Mississippi, Ohio, and South Carolina have already cut 
spending across the board. Other States are convening special sessions 
of their legislatures to address the crisis in their State budgets.
  All this is hurting the very people who need help the most today--
working families, single parents, poor children. And such cutbacks will 
clearly undermine the effects of any stimulus package.
  The answer is for the Federal Government to provide an additional $7 
billion in the stimulus package to help the States to continue their 
existing human services programs. The most timely and effective way to 
accomplish this goal is to temporarily increase the Federal 
contribution to programs where there is already a State-Federal 
partnership. The largest of these is Medicaid. In a recession, the 
number of families eligible for Medicaid increases substantially. In 
fact, some estimate that if unemployment rises 2 percent, the number of 
Medicaid recipients could increase by 2.5 million, dramatically 
increasing State costs.

  We should temporarily enhance the Federal matching rate for Medicaid 
by 2 percentage points for States that agree to maintain their current 
eligibility standards and benefits. This would serve as an incentive 
for those States.
  We should also help States temporarily by increasing the Federal 
Social Services Block Grant Program, which is used by States to pay for 
a variety of services to low-income families. It is important that 
State governments not be forced to curtail assistance when it is needed 
most--and, once again, these are dollars that will also go directly and 
quickly into the economy.
  This spending will lift the economy in the short term; and strengthen 
it for the long-term.
  A stimulus package must also include the right kind of temporary tax 
cuts that actually increase spending and growth. Seventy percent of 
Americans pay more in payroll taxes than in income taxes. Yet many of 
them received no tax rebate earlier this year. The rebate unfairly 
ignored these low- and moderate-income families. A one-time rebate of 
payroll taxes would immediately inject $15 billion into the economy, 
placing the dollars into the hands of people who will spend it 
immediately.
  I do not see how anyone can defend permanent tax cuts over the next 
10 years that primarily benefit the wealthy who will save most of the 
money, when that same money can and should be used to cut taxes now for 
middle- and lower-income families who will spend the gains immediately.
  In the days and weeks ahead, there will be debates and compromises. 
But surely we can fashion a comprehensive stimulus package that meets 
America's new high standard--injects needed funds into the faltering 
American economy as quickly as possible--and that is fair and just.
  In this case, fairness is also the deepest practical wisdom--the way 
to get the economy back on its feet as soon as possible and without 
jeopardizing the foundations of our future prosperity.
  It would be wrong in principle and wrong economically to pass a false 
stimulus package of unfair tax cuts that would go largely unspent, 
giving the largest benefits to the few, with limited benefits to 
consumption and production, and long-term damage to fiscal and monetary 
stability. After September 11, we cannot afford businesses as usual, or 
the clever politics of repackaging previous goals as if they were a 
real response to the need for national renewal.
  We need a real response and real results--now. But this stimuls is 
only a first step in a new and greater project--for our economy and our 
society.
  Let us be frank. For a long time now, our first thoughts have too 
often been about ourselves, not others. In the process, we have 
neglected the future and some of our best ideals. It is time to change 
that, too.
  Our wartime leaders have always understood that we cannot ask people 
to sacrifice and to fight abroad if we fail to fight for a more decent 
and more just society here at home.
  Our leaders have always understood that the war front and the home 
front are really the same front. Never has this been more true than in 
this new kind of war against terrorism, fought both thousands of miles 
from our shores and in our own airports, our own mailrooms, and 
potentially in any American community.

  In the late 1950s Dwight Eisenhower saw the relationship between our 
national security and education when he created the National Defense 
Act. He had the vision to invest in both--through support of local 
public schools, improvements in math, science and technical education 
as well as loans so that more people could go to college. President 
Eisenhower would have met the September 11 standard.
  As he led the Nation through World War II, Franklin Roosevelt fought 
to make the home front stronger, too. He demanded progressive income 
taxes, defended unions, opposed discrimination, and created new 
partnerships with business. He would have met the September 11 
standard.
  Beyond the stimulus package, how can we meet that standard now?
  America would not be the America it is today if our nation and our 
people had not dared again and again to reach higher across our 
history. Once more today, a new economy demands a new era of public 
purpose and progress.
  The first priority is education. The information age requires an 
ever-more sophisticated work force. I commend President Bush for the 
new and effective attention he has given to higher standards in our 
schools. Now, we must get this bill. And this bill is only the 
beginning of our effort, not the end. We must do more and invest more 
to improve education and to secure for every person the chance to go as 
far as their talents can take them. Maximum opportunity for each is the 
only path to maximum prosperity for all, and maximum strength for 
America.
  The next priority is health care. Before September 11, we needed a 
Patients' Bill of Rights to guarantee that medical decisions will be 
made by doctors, not accountants, and that people

[[Page S10911]]

will have access to the best treatments, not just the cheapest. 
Terrorism is no excuse for delay. We need a Patients' Bill of Rights 
just as much today as we did before September 11. I urge the Congress 
to pass it now, and the President to sign it. And I urge the President 
and Members of Congress to keep the promise we all have made to 
guarantee all our seniors access to affordable prescription drugs. They 
need that help now, just as much as they did before.
  There is something we need now even more than we did then: We must 
strengthen our fragile public health infrastructure to deal with the 
clear and present dangers of chemical and biological attack. On Capitol 
Hill, we know the threat first hand; we must defeat it, and we will.
  Today, Senators and Members of Congress have the best of the Nation's 
health care at our disposal. Imagine the millions who do not. Many 
Americans do not even know where to go to find a doctor's help 
immediately. We need an emergency health care system sufficient beyond 
doubt to meet the dangers we may face--not just tomorrow, but over the 
next decade.
  The bioterrorist threat should remind us of an ideal too long denied 
in this country: Health care is a fundamental right, not just when a 
terrorist attacks, but when cancer or diabetes or any other disease 
strikes. We have made progress; we must keep moving forward; we must 
get there.
  Finally, the new economy has produced vast new wealth and 
opportunities, and reduced poverty by 25 percent since 1993. But 
millions are still left behind, and working families have not gained 
their fair share of this new national wealth. So when prosperity 
returns, we must ensure that we can all advance together. We must open 
new doors for every American. We must help 21st century mothers and 
fathers cope with the stresses of choosing between the jobs they need 
and the children they love. We must make the workplace more flexible, 
so that workers cannot only provide for their families, but also care 
for them. We must also provide a more decent living to the Nation's 
caregivers, to teachers, nurses, and child care workers, who give so 
much, yet earn so little. We must make sure the new economy works for 
all Americans.
  Some say we cannot fight for a safer society and a more just society 
at the same time. I say, we weaken ourselves abroad if we do not 
strengthen ourselves at home. We cannot defend democracy abroad unless 
we extend democracy at home. In America and Britain, World War II was 
accompanied and followed by a period of great reform and historic 
transformation in society. Now, in this time of crisis, we cannot 
settle for anything else.
  The spirit of September 11 points the way. In that spirit, we must 
continue to care about each other, and fulfill the promise and 
opportunity of America for all our people.
  This spirit of September 11 has compelled so many of our citizens to 
do more for our country, our communities and our fellow Americans. This 
time calls for active citizenship, whether by children getting involved 
in service learning programs at school or senior citizens signing up 
for the Retired Senior Volunteer Program. This Saturday is Make A 
Difference Day, sponsored by America's Promise and the Points of Light 
Foundation. All Americans should use this occasion to find new ways to 
make their own contribution.
  We are one American community. September 11 proved that. Active 
citizenship will nourish that spirit and sustain us in the challenges 
ahead. So we must reject any attempt to misuse the terrorist threat as 
an excuse to deny or delay our obligations to teach our children well, 
to treat the sick, help the needy, and make the new economy a new 
foundation for a stronger family life and a higher standard of life for 
all our families.
  We have heard such excuses for inaction in the past. We will hear 
them again in this crisis, that the war on terrorism will deplete our 
resources and delay our commitment to ``a more perfect union.'' Always 
in the past, there were doubters in America. But always we kept faith 
with America's ideals, and came together to fight the hardest battles 
and respond to the greatest social needs. We mobilized our government 
and our whole Nation, wisely and well, to defeat our enemies and meet 
the demands of our best ideals.
  It has never been more critical to do so than it is today.
  Let us start with a stimulus package that truly lifts our economy. 
And then let us finish the great work we are in--which is not just to 
win a war, but to build a future of ``liberty and justice for all.''
  So my message now is fundamental. We need not and we must not 
sacrifice the home front to the war front. they are one and the same. 
We are all in this together, as we always have been throughout our 
great history.
  If we meet the new standard of September 11, no one will stand in our 
way, and many more will join us. And the heroes of that day will have 
left an undying legacy--a proud new chapter in annals of America's 
greatness.
  Let us pledge our energies to this cause. Let us show, that as the 
battle goes on for a world free from fear, the work goes on to move 
America forward.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Nelson of Florida). Under the previous 
order, the Senator from Minnesota is recognized.
  Mr. WELLSTONE. Mr. President, I honestly and sincerely say it is one 
of the best speeches I have heard on the floor of the Senate in the 11 
years I have been here. It is very connected to values I hold dear. I 
think what Senator Kennedy just said, especially if it gets translated 
into our doing the work and passing this legislation, is so important. 
These times call on all of us to be our own best selves. I believe that 
is what the Senator's speech has called for us to do here, and for all 
Americans, we need each other as never before. We need each other as 
never before in relation to the physical security challenges, in 
relation to the uncertainty of the world, and we need each other as 
never before in terms of how we help one another to be strong in our 
own Nation.
  I thank the Senator from Massachusetts for a marvelous speech.
  Mr. REID. Will the Senator yield?
  Mr. WELLSTONE. I yield.
  Mr. REID. I agree with the Senator. It is one of the finest speeches 
I have heard on the Senate floor. It covers areas that needed to be 
covered. It was an elaborate speech, very substantive. I agree with the 
Senator from Minnesota.
  Mr. WELLSTONE. Mr. President, we have to make sure it translates into 
getting work done.

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