[Congressional Record Volume 148, Number 126 (Tuesday, October 1, 2002)]
[Senate]
[Pages S9658-S9659]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              THE ECONOMY

  Mr. BENNETT. Mr. President, I have listened with some interest to the 
Senator from New York and I have some comments to make which I hope 
will clearly set the record in some areas.
  She referred to the jobless recovery in which we find ourselves. This 
is exactly parallel to the jobless recovery that occurred in the early 
1990s as we came out of the recession that started in 1990, and the 
recovery started in 1991. There was a period when the Congress was 
concerned about the fact that we were recovering, but not enough jobs 
were created. That is fairly typical of a recovery.
  The present recovery is no different in that regard.
  Mrs. CLINTON. Will the Senator yield?
  Mr. BENNETT. I will be happy to yield for a comment.
  Mrs. CLINTON. The Senator is correct, we had a jobless recovery in 
the early 1990s, and a jobless recovery in the early part of this new 
century. In the early jobless recovery of the early 1990s, the first 
President Bush extended unemployment benefits three times. Is it the 
position of the Senator that this job of recovery means it is so 
different we shouldn't extend the same helping hand the President did 
in the early nineties to those who lost their jobs then?

  Mr. BENNETT. I have not gotten to the issue of extending 
unemployment. I have no particular objection to extending unemployment. 
I am trying to set the record straight about some of the statistics 
that are being quoted.
  Mrs. CLINTON. I thank the Senator for his lack of objection, and I 
hope it transforms into support for extending unemployment insurance.
  Mr. BENNETT. When the bill comes to the floor of the Senate, I will 
be happy to give it consideration, and I see no reason at the moment 
why I should oppose it.
  The Senator commented on unemployment rising. The fact is the 
unemployment rate is falling. The unemployment rate hit its high in the 
circumstance of 6 percent and starting to come down in August. It was 
5.7 percent. We do not have the September numbers yet.
  I remember being taught in economics if we were at 6 percent 
unemployment, we were at full employment. The assumption was the 
economy could not absorb more jobs than that without going into 
inflation. We have proven that is not the case.
  But to panic because unemployment hits 6 percent and is now falling 
and to say we are not in recovery is, frankly, not accurate. We are in 
a recovery. However slow it may be, however sluggish it may be, it is a 
genuine recovery, and we should not panic everybody into believing we 
are on the verge of a double dip or a major recurrence of recession.
  Personal income was unchanged in July and rose in August. The Senator 
said personal income was falling. Again, that is not sustained by the 
actual numbers. Personal income is rising, and the recovery is stronger 
than the Senator from New York would have us believe.
  I spoke on this issue yesterday, and pointed out we were in a 
recovery which began in the fourth quarter of 2001 when the gross 
domestic product rose at 2.7 percent. From the first quarter of this 
year, gross domestic product rose at 5 percent. Previous figures for 
the second quarter of this year indicate the gross domestic product was 
rising at 1.1 percent. Those figures have now been revised. They have 
been revised upward.

[[Page S9659]]

  Looking back over it, we are now told the recovery continued in the 
second quarter with gross domestic product rising at 1.3 instead of 
1.1, and the blue-chip forecast which said in the current quarter--the 
third quarter--we would see gross domestic product rising at 2.7, the 
same rate it did in the fourth quarter of last year, that those figures 
are low; that, in fact, the forecast now is the third quarter of this 
year will see gross domestic product numbers closer to 3 percent 
instead of 2.7 as previously forecast.
  I don't expect anyone to remember all of these numbers I recite. I 
hope they will remember that the general trend is up and is more 
encouraging than the Senator from New York and others would lead us to 
believe.
  We keep being told we are in a period of great distress and disaster, 
and we must do something and do something drastic about it. One of the 
things that is proposed is we must postpone the effect of the tax cut 
that was passed by wide margins--both in this body and the other body--
at the beginning of the Bush Presidency.
  I want to discuss that for just a moment. It has been framed with the 
same kind of statistical maneuvering I have tried to address here. The 
question that makes for a good headline in a political stump speech is 
who lost the surplus? They are talking about a $5.6 trillion surplus 
that was projected at the time we had the tax cut debate. That surplus 
has now disappeared in the projections that were being made, and we are 
being asked again and again, Who lost the surplus?
  The first point I want to make on that score is the surplus never 
existed. The surplus was a projection. I can take the Nation back 
through every projection made by the CBO; before that by the Office of 
Management and Budget; before the Congressional Budget Office was 
created, by the old Bureau of Budget; and before the Office of 
Management and Budget was created, and demonstrate virtually every 
projection of surplus or deficit made by those entities has always been 
wrong. Sometimes it has been wrong on the high side. Sometimes it has 
been wrong on the low side. But the one consistency is every project, 
surplus, or deficit in future years has always been wrong.
  It comes as no surprise to discover the projection of the $5.6 
trillion surplus was wrong in this case as well.
  I remember a discussion with Alan Greenspan when he was before the 
Banking Committee, or perhaps the Joint Economic Committee. I sit on 
both, and he testifies before both. Someone asked him about the 
projections that were being given to us at the time with great 
confidence. They said, Mr. Chairman, how likely is it this projection 
will be realized? He said it will not be realized. This projection will 
be wrong. He said I cannot tell you whether it will be wrong on the 
high side or the low side. I cannot tell you and neither can any other 
economist tell you whether we will reap the benefits of the new age 
economy to a degree far greater than demonstrated by this projection or 
whether we will fall on our face and come in flat.
  The problem is--I am not now quoting Greenspan--with an economy doing 
something like $11 trillion a year and subject to the uncertainties of 
the business cycle as well as the outside shocks that can occur in this 
world, no one can look 10 years into a crystal ball and tell you with 
absolute certainty what is going to happen.
  I find it interesting that those who insist the loss of the $5.6 
trillion surplus is due to the Bush tax cut and solely to the Bush tax 
cut also say to us why don't we deal with our current economic problems 
by postponing the effective date of the Bush tax cut? And, after all, 
that is going to take place in the outyears, anyway. So postponing the 
effective date will have no particular impact short term.
  All right. Hold onto that argument for just a minute and listen to 
the other argument that we are being told.
  We are being told it was the Bush tax cut that blew the hole into the 
surplus. Wait a minute. If the impact of the Bush tax cut is going to 
come in later years so it can be postponed without making any 
difference, how could it have been the primary mover in creating the 
deficit right now? Well, I can tell you how. I was part of the 
discussions as we crafted the tax cut. Democrats said to us at the time 
the tax cut was being considered it would have to have an immediate 
impact. We have to put money in the hands of people right now. We can't 
wait for the tax cut impact in the outyears.
  The proposal was made primarily from the Democratic side of the aisle 
that in addition to cutting the marginal rates for taxes there be an 
immediate rebate, $300 per taxpayer, right away. That was not part of 
the original Bush proposal. That came out of Democratic proposals. And, 
frankly, it seemed like a good idea. The Bush administration embraced 
it. We have a combination of cutting the marginal tax rates over a 
period of time into the future and a rebate to get money into the hands 
of the economy and into the hands of people right away.
  If, indeed, it was the tax cut that destroyed the surplus right away, 
it was the rebate side of the tax cut that was proposed by Members of 
the Democratic party and endorsed certainly by me and other Members of 
the Republican party.
  You cannot have it both ways. You cannot say postponing the effective 
date of the tax cut won't affect the present situation. You cannot say 
there was an immediate impact which was bad and then say our proposal 
will have no immediate impact and that is good. This debate has gotten 
somewhat into Alice in Wonderland. I hope we can stay with the facts.
  The PRESIDING OFFICER. The deputy majority leader.

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