[Congressional Record Volume 148, Number 15 (Friday, February 15, 2002)]
[Senate]
[Pages S888-S889]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              BUSH TAX CUT

  Mr. REED. Mr. President, yesterday the President's Council of 
Economic Advisers released a report claiming that the Bush tax cuts are 
responsible for keeping the recession more mild than it otherwise would 
be. They claim that the already passed tax cut has raised prospects for 
a solid recovery and that by the end of this year there will be 800,000 
more jobs than there otherwise would have been.
  The report of the Council of Economic Advisers is somewhat curious. 
It is obviously self-serving. It does make a fundamental mistake. It 
tries to suggest that the Bush tax cut, which centered on the reduction 
of income tax rates principally benefiting the highest paid and most 
affluent Americans, is the cause of the slight stimulus we have seen 
over the last few months when in fact, to be honest about it, it has 
been the proposed rebates championed initially by the Democrats, not 
part of the initial Bush proposal, that has provided some stimulus 
effect over the last several months.
  That goes to the nature of, first, a rebate directly to a whole host 
of Americans across a broad income range. Those rebates typically were 
spent, and that seems to be the case in this situation.
  The reality of the Bush tax proposals is that, first, they were not 
effective this year. Much of his tax cut proposal does not become 
effective until the following fiscal year. As a result, to make claims 
that his tax concept is a part of this stimulus effect is rather 
suspicious on its face.
  To suggest, as I think is the suggestion, that this ``tax plan'' will 
lead to further stimulus of our economy is also suspicious. What it 
will lead to, which is already apparent, is increased Federal deficits. 
This year, because of the poor economic performance of the country, we 
have seen the Federal deficit materialize. But as we go forward, most 
of that deficit can be attributed not to adverse economic circumstances 
but to the tax cut. As we deny resources that are necessary to have 
this Government function and operate effectively in many different 
areas, we will see the deficit grow and grow.

  The problem there becomes, in order to fund Federal programs, we must 
go into the debt markets. We must borrow

[[Page S889]]

more money. That puts pressure on interest rates, and that helps retard 
our economic progress and our growth.
  The notion that the Bush plan has materially aided and assisted our 
recovery or softened the recession is very dubious.
  What is also unfortunate is that in the last few weeks, as we have 
debated a possible stimulus package, there have been several proposals, 
one of which would be broadening the rebate we enacted last spring to 
include those Americans who did not pay income taxes but paid a great 
deal of taxes in terms of payroll taxes and other forms of wage 
taxation. I don't know how many times I have been in the Chamber and 
heard Republicans assail that approach as being inappropriate, 
ineffective, and inefficient.
  What is curious is that the one aspect of last spring's tax plan that 
helped the rebates through the income tax system is being not only 
trumpeted as a Bush proposal but that exact or closely similar approach 
extended to payroll taxes is being derided and criticized by 
Republicans in the Senate as being something unworthy of the Senate.
  I disagree. Frankly, last year if we had adopted a proposal to cut 
taxes that was targeted to lower income Americans, that was broad to 
include not just rebates for income taxes but rebates for payroll 
taxes, we would have seen a much less severe recession than we are 
seeing right now.
  In effect, what we have today is the Council of Economic Advisers not 
providing good economic analysis but providing political spin on the 
tax plan we passed last year. I hope when we go back and reconsider the 
stimulus package, we will understand what stimulates the economy and 
not what is appealing to the political winds of the moment.
  Again, we are in the grips of a recession. There are multiple causes. 
The President's tax proposal as originally proposed certainly did very 
little, if anything at all, to help soften the recession. I hope that 
will become more and more apparent.

  I yield the floor.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The senior assistant bill clerk proceeded to call the roll.
  Mr. BURNS. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________