[Congressional Record Volume 148, Number 15 (Friday, February 15, 2002)]
[Senate]
[Page S884]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        THE ADMINISTRATION'S COUNCIL OF ECONOMIC ADVISERS REPORT

  Mr. DASCHLE. Mr. President, the administration's Council of Economic 
Advisers will issue today some self-serving economic revisionism--a 
little like a figure skating judge awarding the gold medal to his own 
team. We are going to hear that the recession was somehow shorter and 
shallower than it would have been without last year's mammoth, surplus-
swallowing tax cut.
  Let me just say, I might like to change economic history, too, if I 
had just blown a $5.6 trillion surplus in less than a year. But let's 
set the historical record straight.
  The administration's proposed 10-year tax cut, when they offered it 
last year, was $1.7 trillion, plus about $300 billion in interest--
about $2 trillion. Of that, there was zero stimulative tax cut. Not a 
dime was to go out to the American people in the year 2001, last year.
  Let me restate that. There was no economic stimulus in the $2 
trillion tax cut that the administration originally sent to Congress.
  Democrats who were concerned about the recession were the ones who 
proposed to give working American families immediate tax relief to get 
the economy going again. Our Republican colleagues, as late as last 
week, were arguing that there is no stimulative impact at all to 
rebates for working Americans.
  But now we have the White House Council of Economic Advisers 
suffering a case of convenient economic amnesia. They are not only 
forgetting that the administration did not propose a stimulus, they are 
also forgetting what happened to long-term interest rates as a direct 
consequence of their ill-advised, long-term fiscal policy.
  The administration's plan, history will show, was exactly reversed: 
No stimulus but huge, long-term fiscal damage.
  The budget just released affirms the return to deficits. It has been 
hugely damaging to our long-term fiscal condition, including diverting 
$1.5 trillion of the Social Security trust funds just as the baby boom 
generation is about to retire.
  Just as important, though, is that long-term fiscal mismanagement has 
hurt us in the short term. Long-term interest rates have remained 
stubbornly high even as the Fed reduced short-term rates 11 times. Ten-
year Treasurys were at 5.01 percent in January of 2001, and at the 
beginning of February 2002, they were at 5.05 percent.
  That means that homes are harder to buy, student loans are more 
expensive, credit card interest rates remain unnecessarily high. All of 
that has harmed people, and it has harmed the economy.
  So let's just remember where we were last year at this time: The 
administration had the wrong prescription for both the immediate and 
the long term. They proposed no tax cuts at all during the year 2001--
zero for working families. It was Democrats who insisted on a rebate 
that ultimately passed without the support of the administration. But 
then they gave huge giveaways--tilted heavily toward those at the top 
income levels--that explode as we move forward. Those giveaways could 
expose us to fiscal disaster as the baby boomers approach retirement.
  So we should be clear on what happened. Democrats were for immediate 
stimulus for working families and for prudent long-term tax cuts that 
would not have jeopardized our fiscal future or the retirement security 
of millions of Americans.
  The report that we are going to get today from the administration is 
trying to substitute political sound bites for sound economic 
analysis. No fair judge would call the administration's economic plan a 
medal-winning performance.

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