[Congressional Record Volume 147, Number 157 (Wednesday, November 14, 2001)]
[Senate]
[Pages S11737-S11740]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ECONOMIC RECOVERY AND HOMELAND SECURITY
Mr. DASCHLE. Mr. President, 5 months ago, America had a projected
budget surplus of $2.7 trillion over the next 10 years. The stock
market was soaring. The question before us was one that most leaders
could only dream of: ``What should we do with our prosperity?''
At that time, the debate was focused on tax cuts--how much, for whom,
and could we also provide for America's unmet needs? Regardless of
one's view about that debate or its outcome, there can be no doubt that
this is a very different moment.
Two months ago, more than 6,000 innocent men and women lost their
lives to terrorism. In the weeks since, a wave of anthrax attacks has
taken lives, closed offices, and sown fear.
Our President, rightfully, has assembled an international coalition
to fight those who attacked us, and those who aided them. We are at
war.
The Federal Government is helping those areas destroyed and damaged
by the attacks to rebuild. We passed legislation to keep our airlines
flying, and to give our law enforcement the tools needed to fight
terror.
Our economy, which was already weakening before September 11, has
continued to deteriorate.
The question facing America is no longer, ``What should we do with
our prosperity?'' The question now is, ``How do we protect our
citizens, strengthen an ailing economy, and win this war against
terrorism?''
I believe history will judge this Congress by how well we answer that
question.
Shortly after September 11, I visited a call center in Rapid City,
SD, that handles United Airlines' frequent flyer
[[Page S11738]]
program. The 235 people there were working hard--helping people get
tickets and arranging travel in the chaotic days after September 11. It
was a tough job, on the phone hour after hour, helping scared, angry,
and confused callers. All they could do was to ask people to be patient
and to be understanding.
In the past couple of weeks, nearly 50 of those hard-working
employees have lost their jobs. Like most hard-working people in
America, these people don't expect or want the government to do
anything for them that they can do for themselves. But now, due to no
fault of their own--no lack of skill or ambition or work ethic--they
are no longer working.
They are not alone. More than 7 million Americans are out of work.
Last month, the unemployment rate took its largest jump in 21 years.
For too long, we have asked America's laid off workers to be patient
and understanding. Too many Americans fear for their future. Because of
what our nation has experienced in the last 2 months, they fear for
their safety. We need an economic recovery plan that addresses both
fears and offers real help.
Today, Democrats are offering a plan that will help bring back
America's economic prosperity and help workers who have lost their
jobs. It is a plan that strengthens our homeland defense in the
process. This is, simply, the right plan for the right time.
In the weeks following the September 11 attacks, Democrats and
Republicans in the Senate asked the experts, including Federal Reserve
Chairman Alan Greenspan and former Treasury Secretary Robert Rubin:
What are the most effective steps we can take to shore up our economy?
Here is what they told us: Put money into the hands of low- and
middle-income workers; they are the ones who will spend it quickly.
Make sure that workers who have lost their jobs receive unemployment
benefits. And cut taxes for businesses--but limit the tax cuts to those
that actually help create jobs.
They told us that any plan to stimulate the economy should help
people regain the sense of security they need to shop, travel, and
invest.
Finally, they said our plan must be affordable and temporary. After
all, the baby boomers will start retiring in less than a decade, and we
should not be taking on major long-term spending or revenue obligations
that will make it even more difficult to meet our responsibilities to
Social Security and Medicare.
Our plan heeds that simple but sound advice. It includes unemployment
insurance and health care for laid-off workers, tax cuts for
individuals and businesses, and investments in our homeland security.
It does all of these things in a way that is fiscally responsible and
fundamentally fair. I would like to take a moment and outline the four
key components of our plan.
First, it provides unemployment insurance for laid-off workers.
Providing unemployment insurance to laid-off workers isn't just the
right thing to do. It's the smart thing to do. It puts money into the
hands of people who are most likely to spend it immediately. As Robert
Rubin has said, unemployment insurance is ``a near-perfect stimulus.''
But more than half of unemployed workers are not covered under the
current unemployment insurance system, even though they pay into it.
Many of these are the part-time and temporary workers who often most
need the help.
And for those who are eligible for unemployment insurance, the
benefits often do not last long enough. Next year, an estimated 5
million Americans will use all 26 weeks of their benefits, and still be
without a job.
Our plan extends unemployment benefits an additional 13 weeks in all
50 States; it expands coverage to millions of workers who are not
covered under the current system.
During the first Bush Administration, when we were facing a
recession, Democrats and Republicans agreed to extend unemployment
insurance--four times. We were able to agree that extending
unemployment benefits was the right approach to an economic slowdown
then, we should be able to agree that it is the right approach now.
Second, we provide health coverage for workers.
Democrats also believe that extending health coverage for laid-off
workers and their families should be part of any real economic recovery
package. The average cost of COBRA health coverage for a family is $588
a month--half the monthly unemployment benefit.
That is simply too much money for families hit by a layoff. As a
result, only about 20 percent of dislocated workers who are eligible
for COBRA coverage actually purchase it. Too often, when a head of a
household is out of work, parents and children go without health
insurance.
That is wrong.
We propose paying up to 75 percent of the cost of COBRA coverage,
giving States the option to provide Medicaid coverage to those who
aren't eligible for COBRA, and providing a temporary increase in the
Medicaid payment rate for States, so that States will not have to cut
Medicaid or raise taxes in order to keep their budgets balanced.
Third, we provide tax cuts for families and for businesses that
invest and create jobs.
Most economists agree: to jump start the economy, individual tax cuts
should put money quickly into the hands of middle- and low-income
people--because they are the people who are mostly likely to spend it
immediately.
Our plan provides tax rebates for the 45 million low-income taxpayers
who pay Federal payroll taxes but got little or no rebate at all last
summer.
Our plan also includes new business new tax cuts to encourage job
creation and investment. In sum, these are tax cuts that will help Wall
Street and Main Street.
Fourth, we provide for strengthening homeland security.
We can pass tax cut after tax cut. In the end, no tax cut--even the
right tax cuts--will stimulate the economy if people are afraid to
travel or go about their business.
If we are serious about repairing damage to America's economy--and
avoiding future terrorism-related financial disasters--we must
strengthen America's homeland security so people can feel safer getting
on a plane, going about their business, and living their lives.
That is why our plan includes $15 billion for homeland defense. It
will help protect Americans from threats such as the recent anthrax
attacks that have so shaken our nation and our own offices, as well as
other biological, chemical, and nuclear threats. It will strengthen our
transportation security and help protect our food and water supply.
All told, our plan costs $74 billion in the first year, and $84
billion over 10 years. It is both effective and responsible, and we
believe it is the right approach for America's economic recovery and
future safety.
Regrettably, Republicans have chosen to take a different approach.
Many things, as I said, about America changed on Sept. 11. One thing
that seemed to change--for the better--is the way Washington works.
Democrats and Republicans in Congress have been working together, and
Congress has been working well with White House.
This unprecedented level of consultation and bipartisanship is what
has, to date, allowed us to respond so quickly to the attacks and the
ongoing terrorist threat.
It was my hope that we would follow that same bipartisan approach on
the subject of economic stimulus as well. Indeed, that is how the
process began. Early on, Chairman Baucus led a bipartisan series of
meetings with Senator Grassley, their House counterparts, outside
experts, and the Administration.
Unfortunately, Republican leaders in the House withdrew from that
effort. Instead, they pushed through--on a party line vote--a bill that
is not a recovery bill at all but merely another laundry list of tax
cuts--just another page out of the Republican Party's pre-existing tax
cut agenda.
Although they masquerade as stimulus plans, no serious observer
believes that the Republican proposals are anything of the kind.
The centerpiece of the Senate Republican proposal is a plan to
accelerate by 4 years the rate cuts in the $2 trillion tax cut enacted
earlier this year.
Speeding up the rate cuts would cost $121 billion over 10 years. That
amounts to 69 percent of the total cost of their plan.
And what would Americans get for their $121 billion? Most would get
very little.
[[Page S11739]]
But the top 1 percent of taxpayers--people making an average of $1.1
million a year--would get an additional $16,000 tax cut next year. They
would get additional tax cuts the year after that, and the year after
that, and the year after that.
In total, over the next 4 years, the Senate Republican plan would
give a $52,000 tax cut bonus to every millionaire in America--the very
people who are least likely to spend it and help the economy.
America needs a plan that will help the economy now, not years from
now. We need a plan that puts money in the hands of people who need it
most, not the people who need it least.
I have yet to understand how giving millionaires tens of thousands of
dollars in additional tax breaks 3 and 4 years from now will stimulate
the economy today.
The second-largest part of the Senate Republican plan would spend $22
billion to repeal the corporate alternative minimum tax, or AMT.
The corporate AMT was enacted as part of the Tax Reform Act of 1986
because certain corporations, using legions of tax lawyers, had become
so clever at exploiting loopholes in the tax code that they were able
to pay no taxes at all.
So Congress said to those corporations: regardless of how many
loopholes you can exploit, you must pay at least a minimum tax.
Now Republicans want to do away with the minimum tax, forever. How
will returning to the days when certain profitable corporations paid no
taxes at all stimulate our economy now?
Small businesses create most of the new jobs in America, and most of
them are not incorporated. So they won't get a penny from repealing the
corporate AMT.
If this proposal does not seem fair or stimulative, that is because
it is not.
What is perhaps even more troubling about the Republican approach is
what it fails to address.
The Republican plan provides next to nothing for workers who have
lost their jobs. And it provides nothing at all for homeland security.
When you read their plan for the first time, you assume it is missing
a page. Not a dime for bioterrorism preparedness? Not a nickel for food
safety or for security at our nuclear plants? Can this really be a plan
to restore confidence and stimulate the economy?
Evidently, these items weren't omitted because of cost concerns.
Quite the contrary. The Republican plan is more than twice the size of
our plan. And the exploding price tag of the Senate Republican plan--
$175 billion over 10 years--may not even account for its true cost.
It will not make America safer. It will not help the economy. In
fact, it may do real economic harm by driving up long-term interest
rates.
Now, if the Republican plan sounds familiar, that is because it is.
It is a collection of leftover tax breaks that our friends on the other
side of the aisle weren't able to pass last spring.
Reading their plan, it's as though September 11 never happened. They
have re-labeled these tax breaks as, ``stimulus,'' but they are really
just more of the same pre-September 11 tax cut agenda that we have
heard our Republican colleagues talk about for months, if not years.
Tax cuts for wealthy Americans and profitable businesses do not solve
every problem--and they will not solve this one.
The Republican plan is not about getting the most stimulus per dollar
spent. It is not about getting help to those who most need it. It is
not about strengthening our national security. It is about ideology.
It is about seizing on a moment of crisis in order to advance
unrelated political goals. It is driven by a conservative Republican
orthodoxy that is so rigid, and so myopic, that it cannot or will not
see what is obvious to every fair-minded observer: this is the wrong
plan for America, especially at this moment in our history.
I will say one thing for this approach: it has managed to achieve a
degree of unanimity. It has been unanimously rejected by economists,
Governors, State legislators, editorial writers, and business leaders.
Two weeks ago, Senator Lott and I received a letter from the National
Governors' Association, signed by its Chairman, Governor John Engler,
Republican of Michigan, and its Vice-chairman, Governor Paul Patton,
Democrat of Kentucky. The NGA is a majority Republican group that
represents all of America's governors--29 Republicans and 19 Democrats,
and 2 Independents.
The Governors asked us, as we consider economic stimulus, to ``help
protect health and human services for vulnerable Americans, address
employment and training for dislocated workers, and stimulate the
national economy through targeted capital investment.''
Interestingly, they make no mention of huge new tax breaks for
profitable corporations. No mention of huge new tax breaks for the
wealthiest Americans.
Republican leaders got this letter. Sadly, I don't think they got the
message.
Mr. President, I ask unanimous consent that this letter be printed in
the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
National Governors Association,
Washington, DC, October 25, 2001.
Hon. Thomas A. Daschle,
Majority Leader, U.S. Senate,
Washington, DC.
Hon. Trent Lott,
Minority Leader, U.S. Senate,
Washington, DC
Dear Senator Daschle and Senator Lott: The nation's
Governors appreciate the bipartisan efforts of Congress to
develop an economic stimulus package. On October 4, we sent
you a list of policy options to consider in developing your
final plan. We are updating our recommendations to reflect
the recently clarified size and focus of the options you are
considering. Our recommendations also reflect the further
deterioration of states' fiscal positions as detailed in the
``economy.com'' report sent to your earlier this week.
With respect to our fiscal position, most states have made
a series of spending cuts. Many are now implementing a second
round and in some cases a third. A number of states now have
revenue shortfalls in excess of $1 billion and many are
scheduling special legislative sessions to address mounting
fiscal problems. The cumulative states' current revenue
shortfall is $10 billion and growing. Moreover, new and
unprecedented state responsibilities for homeland security
are exacerbating serious fiscal conditions.
The House economic stimulus bill, if enacted, would further
educe state revenues by at least $5 billion annually. This
revenue reduction would dramatically increase existing state
shortfalls and result in significant state budget cuts. These
cuts, in turn, would hamper the effectiveness of any federal
stimulus package. Similarly, absent any changes in the Health
Insurance Portability and Accountability Act (HIPAA) or new
federal funding for HIPAA implementation in state-
administered programs, states will have little choice but to
divert scarce funds to comply with this federal mandate. This
means that significantly less state funds will be available
of reduction, critical state services, capital investment,
infrastructure improvement, and additional efforts to respond
to bioterrorism and other threats to homeland security.
Specifically, the Governors offer the following
recommendations to Congress in the attached documents to help
protect health and human services of vulnerable Americans,
address employment and training for dislocated workers, and
stimulate the national economy through targeted capital
investment.
Congress has many difficult tasks to complete before
recessing for the year. As a bipartisan group of government
leaders, the Governors look forward to working with you.
Sincerely,
John Engler,
Chairman.
Paul E. Patton,
Vice Chairman.
Protections for Vulnerable Americans
Temporary Increase in Medicaid FMAP for children and
Families.--Congress should temporarily increase the federal
medical assistance percentage (FMAP) in Medicaid by 10
percent for acute care services for families and children.
The territories should receive comparable relief. This will
lessen the pressure on states and territories to cut Medicaid
health care benefits or reduce the number of people served.
Medicaid FMAP Hold Harmless Provision.--Congress should
provide a ``hold harmless'' provision for states that were
scheduled to have their Medicaid FMAP reduced for fiscal
2002. These reduced rates were based on outdated per capita
income data collected at a time when state and federal
economics were in much better health.
TANF Supplemental.--The Governors continue to urge Congress
to approve a one-year extension of supplemental grants under
the Temporary Assistance to Needy Families program (TANF).
Without an extension of the TANF supplemental grants this
year, 17 states will face a substantial cut in funding for
programs that assist families in moving from welfare to work.
[[Page S11740]]
Health Care for Dislocated Workers.--As Congress considers
proposals to assist dislocated workers in gaining access to
health insurance, Congress must recognize that states will
not have available funds for any new matching requirements or
options.
Employment and Training for Dislocated Workers
Expansion of Eligibility for Unemployment Benefits.--By
temporarily modifying existing Disaster Unemployment
Assistance (DUA) eligibility requirements, the DUA program
(already in operation or on ready standby in all states)
could be used only to provide Unemployment Insurance (UI)
equivalent benefits to individuals affected by declared
disasters, but also to those affected by resulting economic
contraction. These UI-equivalent benefits would be
particularly beneficial for those who do not qualify for UI
benefits due to insufficient duration of employment or level
of earnings.
Extension of Unemployment Benefits.--Congress also should
temporarily extend the duration of regular UI benefits
through 100 percent federal funding to ensure that unemployed
workers can secure employment prior to the termination of UI
benefits.
Acceleration of Reed Act Distributions.--Congress should
accelerate distribution to state accounts of excess funds (as
defined by the Reed Act) being held in the Federal
Unemployment Trust Fund. This could be achieved by retaining
the 0.25 percent ceiling on the Federal Unemployment Account.
The immediate transfer of an estimated $9.3 billion can be
used by states only for providing UI benefits, employment
services, and program administration.
Increase Funding for Dislocated Workers Employment and Job
Training Services.--Fiscal 2001 funds for this Workforce
Investment Act (WIA) programs were rescinded by $177.5
million, while the President's proposed fiscal 2002 budget
requests a reduction of $207 million. Congress should restore
these funds.
Stimulate the Economy Through Capital Investment
State Match.--Temporarily reduce or eliminate state match
requirements for capital investment programs.
Federal Investment.--Increase federal funding for
infrastructure investment critical to homeland security.
Private Activity Volume Cap.--Lift the private activity
volume cap, which would accelerate housing and economic
development construction activities.
Mr. DASCHLE. Mr. President, there is another important point that
must be made today. Five months ago, when we last considered a huge tax
cut that mostly benefitted the wealthiest Americans, the money to pay
for it was to come from the non-Social Security surplus.
Today those surpluses are gone. So whatever is spent on this stimulus
package will, at least over the next 5 years, come mainly out of Social
Security and Medicare funds. We may even return to deficit spending, if
we are not careful. That is why we must be even more prudent, and more
vigilant, about what is included in this economic recovery package.
The Democratic plan has a one-year cost of $74 billion. Over 10
years, its cost increases to $84 billion. As I said, the Republican
plan costs $89 billion in 2002. Over 10 years, it explodes to $175
billion--and it runs the risk of damaging our long-term economic
health.
Their plan costs more but does less for our economy, less for laid
off workers, and nothing for homeland security.
I hope every Senator will ask himself or herself a simple question:
Would my constituents want their Social Security and Medicare money to
be spent on this proposal?
Democrats have tried to write our package with this concern in mind.
We think the American people want us to invest in bioterrorism
preparedness, for example.
But would Americans want their Social Security payroll tax money
spent on new tax cuts for the wealthy or on huge permanent new tax
breaks for profitable corporations? I don't think so.
In fact, it seems especially unjust when you consider that Americans
at the lower end of the income scale pay payroll taxes on every dollar
of their income. Meanwhile, wealthy Americans pay zero in Social
Security payroll taxes on all income above $80,000.
In other words, the Republican plan would spend the hard-earned
Social Security payroll tax dollars of ordinary workers at the bottom
and use them to pay for tax cuts for corporations and people at the
top.
We have been told that Senate Republicans will attempt to raise a
budget point of order against this bill.
Let me make clear what that means. A budget point of order is a
procedural technicality aimed at killing this bill by saying that what
our nation is now facing is not an emergency.
A vote for this procedural motion is a vote to kill unemployment
insurance for laid off workers.
It is a vote to kill health care for struggling families.
It is a vote to kill tax cuts for businesses that create jobs and for
people who did not get a rebate in the last round.
It is a vote to kill funding to build our national pharmaceutical
stockpile, security at our nuclear power plants, protections for our
bridges, tunnels, and ports, and the safety of our food and water
supply.
This is a vote to kill all of these items by saying that this is not
an emergency.
Thousands of people have lost their lives. Millions of people are out
of work. We are at war abroad, and we are facing threats to our safety
here at home.
If that's not an emergency, I don't know what is.
There is still time for us to come together and pass an economic
recovery plan that will work for the nation.
In the days since September 11, we have seen more clearly than ever
that we are indeed one nation, indivisible.
The victims of those attacks were from all races and ethnicities, all
segments of society.
The heroes who came to their aid didn't ask, What's in it for me?
As we look to lift up the economy for all Americans, the most
fortunate among us should not be asking what's in it for them.
Those workers I met in Rapid City aren't looking to us to solve all
of their problems. They are just looking for a little help to get
through one of the most difficult times of their lives.
It may be difficult for us to reach agreement, but for them--and for
our nation--it is vitally important that we do so.
I strongly believe that with every challenge comes an opportunity,
and right now we have an opportunity to help those who are hurting,
lift our economy, and secure our Nation.
We will be judged on whether we seize it.
I hope and pray that we will.
I yield the floor.
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