[Congressional Record Volume 148, Number 127 (Wednesday, October 2, 2002)]
[Senate]
[Page S9781]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


[[Page S9781]]
                         A STRENGTHENED ECONOMY

  Mr. NELSON of Florida. Madam President, yesterday I had occasion to 
begin some remarks, thinking I could make them within 10 minutes, with 
regard to the economy. There were others waiting in line at the end of 
my 10 minutes. I rise to continue those comments, pointing out that as 
we discuss these highly important, weighty decisions we have to make 
about war and peace and about homeland security, the Nation's military 
strength is undergirded by its moral strength and its economic 
strength.
  It is due to the lack of that economic strength, as evidenced in an 
economy that has been in the tank, as evidenced by so many different 
indicators--unemployment going up, the stock market going down, the 
weakness of retail sales, the laying off of people, the poor earnings 
reports of companies all over America--that it is incumbent upon the 
Senate to bring its attention not only to the highly important matters 
of war and peace but that if we are to continue this war against 
terrorism, and if we are to do something about the developing of 
weapons of mass destruction in Iraq, for us as a Nation to be able to 
successfully prosecute these wars, we need to have a strengthened 
economy, a solid foundation in our economy.
  There are a number of things we can do. Yesterday, I pointed out that 
we were faced with, about a year and a half ago, the beneficence, the 
wonderment of a surplus that was projected over the next decade that 
not only was going to allow us to accommodate a huge tax cut and 
spending increases on such things as we anticipated then, such as 
increased defense spending--this was before September 11--there were 
other high-priority items such as modernizing Medicare with a 
prescription drug benefit, increased spending to recognize and honor 
the veterans, the protection of the environment, a much larger 
investment in education; that we could accommodate not only a major tax 
cut along with those spending increases, but then we would also be able 
to save a part of that surplus--particularly the surplus that was 
generated in the Social Security trust fund--and that the surplus, in 
effect, over the next decade, was going to be able to pay down the 
national debt, and thus save us the sum of $250 billion to $280 billion 
a year that we are paying in interest.

  But that did not occur. What occurred was that the projections for 
the surplus over the next 10 years were way too rosy. How many of us 
stood on this floor and said exactly that--not only this Senator from 
Florida but the Senator in the chair from New York said we ought to be 
conservative in our estimates of what this is going to be so we do not 
overobligate ourselves. We also said that when we enact a tax cut--and 
we want to--it ought to be a balanced approach so the tax cut doesn't 
absorb all of the surplus so that you can do these other things. The 
other things were increasing defense expenditures--and we said that 
before September 11. How true was that prophetic statement. But it 
didn't happen that way. Now we are running deficits in this year to the 
tune of about $150 billion. We have deficits that are projected over 
the next decade.
  When you take into consideration that we are now borrowing out of the 
Social Security trust fund surpluses--something every one of us in the 
election of 2000 said we were not going to do--we were going to fence 
off the Social Security trust fund and it wasn't going to be touched. 
As a result of that, the surpluses were going to pay down the national 
debt.
  Well, that did not occur because we were not wise and balanced in our 
approach to the Federal Government. It is a major contributor right now 
to the stock market being in the tank, and it doesn't make any 
difference that the stock market went up 350 points yesterday. The two 
previous days it went down that much. It is still sort of rocking along 
below 8,000.
  What is that? That is a reflection of the lack of American investor 
confidence in American corporations. Why? In part, it is because the 
Federal Government has returned to deficit financing on an annual 
basis--that is, borrowing money to pay expenditures; therefore, it is 
deficit financing--when we said we had the opportunity to get out of 
that.
  I had a little experience in this back in 1981 as a Member of the 
House of Representatives. I voted for a big tax cut and it took us not 
once, not twice, but three times to undo that tax cut in order to get 
the fiscal house in order.
  I said I was for a big tax cut. I voted for a version on this floor 
last year to the tune of $1.2 trillion over a decade. But that wasn't 
what we enacted. What we enacted was $1.35 trillion--which is what it 
was billed at--but it really wasn't because, when you consider the 10th 
year that the tax cut was suddenly reverted to the present tax law, it 
was, in effect, a $2 trillion tax cut, which has usurped all of the 
available surplus.
  In my speech yesterday, I pointed out the percentages; the biggest 
part was taken up by the tax cut. The recession, certainly, was a part 
of that. The projections were another major factor; they ended up being 
way too rosy.
  Our economy at this time is still continuing to be sluggish, and 
although most analysts remain optimistic that we will pull out of this 
recession eventually, the path is not rising very fast. I think we 
ought to be conservative in how we approach this fiscal house to see if 
we can get it in order.
  The economic indicators are disturbing. Last week those economic 
indicators dropped for a third month in a row and Nasdaq hit a 6-year 
low. Of course, most people know about the Dow Jones--it is really in 
the tank. Since the beginning of 2001, 2 million jobs have been lost--
the first decline in the number of private sector jobs in half a 
century. The U.S. poverty rate rose last year for the first time in 8 
years. Last year's administration's spending and tax cut plan is part 
of the reason it has resulted in today's collision course of more 
deficits, more debt, higher economic insecurity, higher interest rates, 
lower economic growth, and lower employment.
  I come back to the floor of the Senate to again say to my colleagues 
what some of us in the moderate sphere of politics were trying to say 
last year as we were going through these budgetary discussions--that we 
ought to use moderation and we ought to use balance and take an 
approach that ultimately would get the fiscal house in order of 
stopping the annual deficit spending and fulfilling the promise that we 
made that the Social Security trust fund surpluses would not be used 
for other spending but, rather, would be fenced off and left so their 
surpluses could start paying down the national debt.
  I appreciate the ongoing dialog about this impending war, but we also 
need to pay attention to the battles that we are already waging in 
order to keep a strengthened national economy, to help support the 
necessary battles that we are fighting in terrorism around the world.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Michigan is 
recognized.

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