[Congressional Record Volume 147, Number 155 (Friday, November 9, 2001)]
[Senate]
[Pages S11645-S11647]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      A SENSIBLE ECONOMIC STRATEGY

  Mr. LIEBERMAN. Madam President, I do want to go back to the fiscal 
stimulus and put it in the context of where we are now.
  America is a nation at war. It is a war that challenges our values 
and our security as fundamentally as the great wars we fought in the 
last century against Nazism and communism. So a war of this kind 
naturally affects most everything else we do in ways that we may not 
yet see in America. That includes the ways we in Congress conduct our 
business.
  It is a time to put national interests ahead of narrow partisan or 
ideological agendas. But when there are important disagreements, we 
cannot sweep them under the rug. After all, democracy, in all its 
fractious glory, is one of the most fundamental values that unites us. 
It is a value that we are fighting to defend in the current war against 
terrorism. The moment we stop practicing democracy is the moment we 
start giving in to the terrorists.
  It is in that spirit that I wish to speak today--not negatively, but 
constructively, and not divisively, but I hope in a spirit of what I 
take to be the national interest.
  I want to speak in disagreement with the fiscal stimulus plan passed 
by the House of Representatives, which is really a House Republican 
plan passed almost entirely on partisan grounds. This plan has 
apparently now been endorsed and supported by the President of the 
United States.
  The fact that our economy was weakening before September 11th is 
clear, particularly in the information technology, telecom, and high-
tech sectors. But after September 11, unfortunately, the terrorists 
helped to push the American economy from weakening into recession. That 
has challenged all of us to regain the kind of psychological, let alone 
economic, confidence that will once again create growth.
  Unemployment has risen now to 5.4 percent. That is a statistic which 
expresses itself in hundreds of thousands of our fellow Americans being 
out of work. Demand in the business sector and the personal consumption 
sector is just not where it was or where we want it to be.
  We must always recognize that the American economy is the strongest 
in the world and that we have the most vibrant, productive private 
sector in the world--both those who invest and

[[Page S11646]]

manage it and those who work in it. In fact, it is from that private 
sector that the recovery to this recession will ultimately come.
  It is also important for us to acknowledge that we in government have 
some options by which we can facilitate and encourage the private 
sector to do what it does best in helping to create economic growth.
  It is important as we put together a fiscal stimulus package to 
remember, ironically enough, the Hippocratic oath that every doctor 
knows very well. It is, ``First, do no harm.'' I say respectfully that 
the stimulus package passed by the House of Representatives, reflected 
in part in the Republican proposals that are surfacing here in the 
Senate, does not pass the test of the Hippocratic oath.
  They will harm our economy by not only being unfair but by bringing 
us further into long-term debt--building, unfortunately, on the 
precedent set when we passed President Bush's tax cut earlier in the 
year. That tax cut plan made the most glowing assumptions about the 
future of the economy, and then spent the revenue that was predicted 
based on those assumptions. That was not fiscal responsibility. And, of 
course, now the multi-trillion dollar estimates of surplus on which 
that tax cut was based have evaporated, have been altered.
  The Republican proposals for fiscal stimulus, particularly by 
accelerating some of the President's tax cuts that were adopted, not 
only do nothing to increase demand by individuals which will stimulate 
the economy and create growth and jobs, but they increase America's 
long-term debt. That means increasing long-term interest rates. And 
that means inhibiting the flow of capital, money that is the 
underpinning of growth in the private sector of our economy.
  So I say, respectfully, the Republican proposals for fiscal stimulus 
do harm. Our economy needs help, not harm. Frankly, I believe we would 
be better off passing no stimulus than passing the package that was 
adopted by the House of Representatives, because I really believe it 
will hurt our economy, not help it.
  Our economy is ready and waiting for a quick, significant, temporary 
shot in the arm. But if the Federal Government makes the wrong choices, 
we will effectively be shooting ourselves in the foot.
  In the current economic climate, we need to discard the stale, knee-
jerk debates of the past and come together now to craft a commonsense 
solution that again puts the national interest ahead of narrow partisan 
or ideological interests, and ahead of the paying of old political 
debts. We need to act to produce economic growth and to protect jobs.
  I want to speak, for a moment, about a very significant event that 
occurred just over a month ago, on October 4. The chairmen and ranking 
members of the House and Senate Budget Committees--Democrats and 
Republicans alike--released basic principles that they thought should 
guide any economic stimulus proposal. They agreed that the package--and 
I quote--``Should be based on the recognition that long-term fiscal 
discipline is essential to sustained economic growth. Measures to 
stimulate the economy should be limited in time so that as the economy 
recovers, the budget regains a surplus that is at least equal to the 
surplus in Social Security. Any short-term economic stimulus should not 
result in higher long-term interest rates.''
  The Republican proposals simply do not meet that test. Given the 
spending demands of prosecuting the war on terrorism, of upgrading our 
homeland defense, of rebuilding the City of New York, President Bush 
initially said he supported enacting a stimulus package of between $60 
and $75 billion which would be balanced--half and half--between 
spending and tax incentives.
  The President asked for a finely tuned performance vehicle. Instead, 
the House has given him a broken-down jalopy. The House Ways and Means 
Committee reported a $212 billion plan that meets few, if any, of the 
bipartisan principles of the Budget chairs and ranking members issued 
on October 4.
  At the heart of the House Republican package is a large corporate tax 
cut, retroactive to 1986--before my youngest child, my 13-year-old 
daughter--was born. It totals about $25 billion in cost. And $6.3 
billion of that ends up in the bank accounts of just 14 large 
companies.
  Madam President, I am all for tax cuts, as I know you are, including 
tax cuts for business. But if our goal is to jump-start the economy 
now, these big tax breaks to a select group of our largest companies 
simply make no sense. In the first place, they will not get their 
refunds until next year. Even then, there is no guarantee they will 
spend the money, which is what we need to spur economic growth. There 
is no guarantee they will invest in acquiring new equipment and funding 
the kind of research and development that will support economic growth. 
We are just going to have to cross our fingers and hope they use it in 
the right way, and don't use it to pay off their debts or buy back 
stock. It's the wrong strategy.
  The same is true, as I said briefly earlier, of the House 
Republicans' plan to accelerate the reduction in income tax rates 
adopted earlier this year. That is not going to prime the pump; it is 
simply going to pump up the incomes of those who need it least. It is 
not likely to spur new investments or job growth, but, instead, to 
reward past success--which is not what our economy needs now. It is not 
the quick action we need, but a slow road to budget deficits and higher 
interest rates.
  There are only two provisions in the House fiscal stimulus bill that 
meet the agreed-upon, bipartisan standards: A grant of rebates to those 
working Americans who did not receive them this summer, and accelerated 
depreciation for companies, businesses that buy and place in service 
new equipment in the coming year. Those are both good ideas. They are 
the beginning of the basis of an agreement. And they are both contained 
in the Senate Finance Committee's package that was reported out 
yesterday.
  This is not the time for serving old, stale, narrow party and 
ideological agendas. It is the time for unity, for leadership, for 
discipline, and for bipartisanship.
  I think the Senate Finance Committee has reported a bill that meets 
those standards. It is focused. It is disciplined. It is short term. It 
is a real stimulus. It will cost $75 billion over 10 years. It contains 
no permanent changes in law. It has minimal negative out-year impact on 
our budget.
  And, unlike the House Republican bill, it includes reasonable and 
effective assistance to those who are unemployed or are about to lose 
their health care benefits. In fact, half of the cost of the bill goes 
to temporarily extending and expanding unemployment insurance and a 
subsidy for COBRA health insurance premiums. That gives balance to the 
proposal. It gives heart to the proposal. And it will help to stimulate 
the economy because every additional dollar that goes to an unemployed 
worker will surely be spent.
  Over the last couple of weeks, I have been talking to workers who are 
unemployed and those who fear they will soon be unemployed.
  Madam President, I ask unanimous consent for two additional minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LIEBERMAN. I thank the Chair.
  Madam President, I find that the greatest fear of those who are 
currently unemployed or who fear that they will, in this recession, be 
unemployed, is: How in the Good Lord's name am I going to be able to 
continue health insurance for my family?
  I spoke to one couple last weekend who said their health insurance 
premiums are $600 to $700 a month. How can they afford to pay those 
premiums through COBRA to keep their insurance going?
  The Senate bill, in an act of not only humaneness but an expression 
of classic American values, said why would we not want to help working 
families who, through no fault of their own, have been laid off, to at 
least cover the cost of health insurance for their families? The Senate 
finance bill will do that up to the tune of 75 percent.
  This is a good, balanced program. It is the medicine our economy 
needs to help it grow. I hope we will not find the debate on the 
stimulus to be rigid, to be unthinking, to be unyielding. I think we 
need to be open-minded because the threat to our economy is real and 
profound.

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  The American people not only need help, but they will not tolerate a 
partisan debate that ultimately produces sound and fury but nothing to 
help them hold their jobs or help their families.
  I thank the Chair and yield the floor.
  The PRESIDING OFFICER. The Senator from Nevada.

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