[Congressional Record Volume 148, Number 136 (Wednesday, October 16, 2002)]
[Senate]
[Pages S10553-S10557]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE ECONOMY
The PRESIDING OFFICER. The Senator from Florida.
Mr. NELSON of Florida. Mr. President, before the No. 2 Democrat
retires from the Chamber, I want to congratulate him. He is a tireless
worker. He is the consummate consensus builder. He is someone who in
the midst of chaos and fracas calms the waters with the soothing balm
that gets reasonable people to suddenly understand they can come
together.
This agreement on the budget resolution, which contains the
enforcement provisions of the Budget Act, is another testimony to his
skill in negotiating, as he does so ably, with the Chairman and the
ranking Members. So I am delighted. It is fitting this agreement on a
budget enforcement provision has been agreed to, because of the
condition of our economy.
The stock market today has gone down another 220 points. Stocks
stumbled, slamming the brakes on any kind of rally we might have
thought was occurring over the last few days. Sales outlook was weak,
there were disappointing earnings, and it has brought profit jitters
back into the market.
Is it any wonder investors, large investors such as pension funds or
small investors such as the Presiding Officer and myself, with our own
little hard-earned savings that we invest in the stock market, all
across this land, indeed, have jitters because of the uncertainty of
the economy? As a matter of fact, in the last 2 years, stock market
wealth has been down 35 percent for a $5.7 trillion loss in that 2
years.
If anyone doubts this, in January of 2001, all the stock markets had
a combined asset value of $16.4 trillion. In September of 2002, that
value went down to $10.7 trillion, a loss of $5.7 trillion. Is it any
wonder that reduction in stock market value, which is huge--35 percent
in a year and two-thirds--is a reflection of the feeling of uncertainty
people have toward the economy, a slumping economy?
It is one thing that certainly 2 million jobs have been lost since
January of 2001. In January of 2001, private sector jobs were at 111
million. In September of 2002, a year and two-thirds later, private
sector jobs were down to 109.6 million jobs--2 million jobs lost,
another indicator of the slumping economy.
It is not as if we did not have a warning. Early last year it became
clear our economy was slowing down. During our Budget Committee
hearings on the topic, almost every economic analyst said responsible
tax cuts could help solve the problem. They said the best way to
stabilize the economy was to get money into the hands of the people who
would spend it, those with low-to-moderate incomes. Above all else, we
were told that whatever we did, we should not pass any tax package that
would cause long-term fiscal harm.
As the Presiding Officer knows, we tried to heed those warnings. Last
year, I supported a tax cut to provide immediate tax relief for all
families. That tax cut would have made sure every taxpayer, including
those who pay only payroll taxes--there are a vast number of Americans
who do not pay income tax because they do not have enough income--that
monthly payroll tax is deducted from their pay. The tax cut would have
made sure that every taxpayer would also get a tax cut.
It would have also reduced the 15-percent income tax rate paid by all
income-tax payers. It would have reduced that to 10 percent and to a
permanent reduction. It would have been fair. It would have been
fiscally responsible, and it would have been economically stimulative.
But the final version of last year's tax cut was enacted by this
Chamber. This Senator did not vote for it, and I did not vote for it
because it did not meet the criteria that the Social Security and
Medicare trust funds would not be touched now or in the future.
I remember when I was sworn in as a freshman to the Senate, the talk
was so uplifting and upbeat about how we had a surplus that was
projected for 10 years and that we were not going to have to invade the
Social Security trust fund to pay bills; indeed, that we were going to
fence it off. We promised that. We were going to fence off the Social
Security trust fund so that by it remaining untouched, its surpluses
over the next decade would have paid down most of the national debt, a
debt that averages out in the range of about $200 billion to $250
billion a year we pay in interest on the national debt. Just think what
that savings on interest payments could provide if we had followed
through on the promises and paid down that national debt, what that
would have meant to the economy as another indicator that we were
getting our fiscal house in order.
The final version of last year's tax cut did not meet that criteria
of walling off Social Security trust funds.
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Because of the fiscally irresponsible way the bill was drafted, with
gimmicks such as changing the beginning and ending dates of key tax
provisions, because of those gimmicks the bill amounted to flawed
public policy that would, in fact, cost our country much more than the
$1.35 trillion at which that tax bill was advertised. The true cost of
that tax bill which advertised at $1.35 trillion, and allowed by the
budget resolution, over a 10-year period is closer to $2 trillion
instead of $1.35 trillion. Now we know. The administration-supported
tax cut plan that we passed last year has a cost that explodes to $250
billion in deficit in the year 2011 alone.
Now, after going from record surpluses to real deficits, we are
seeing just how bad that decision was last year. Now we are
experiencing the worse market decline since the 1930s, as evidenced by
the slumping stock market and again the 220-point loss today in the Dow
Jones Industrial Average.
The Standard & Poors 500 stock index has lost nearly half of its
value. In the last 2 years, Americans have seen the markets lose $5.7
trillion in value. That amounts to $9.5 billion a day in losses in
value on the stock market.
Homeowners now are having such a hard time paying bills. Home
foreclosure rates have reached the highest rate in 30 years. That is
another indicator. The poverty rate has reached an increased mark for
the first time in 8 years and 1.3 million more Americans are now
falling into poverty. Median household incomes have fallen for the
first time in a decade.
Another indicator is consumer confidence. Consumer confidence and
consumer spending have both fallen. Retail sales just took their worst
drop since November of last year, and consumer sentiment has dropped to
levels last seen in the fall almost a decade ago, 1993.
Look at another indicator. The number of Americans without health
insurance rose by almost 1.5 million, to 41.2 million. In a nation of
plenty, in a nation where we pride ourselves on the best health care in
the world, there are 41 million people who do not have health
insurance. Not only are the low and middle-income class families losing
income, but because of the escalating price of health care premiums and
prescription drug costs, they are now also losing their health
insurance.
I thank the previous Presiding Officer, my colleague from Minnesota,
for his personal interest. He is a soul brother in what I am saying,
and I appreciate it so much. In my immediate past government job before
having the privilege of coming to the Senate, I was the elected
insurance commissioner of Florida. I can see the trends of the rising
health insurance premiums. There are a lot of factors on that. But I
will tell you, the economy is one big factor. Where it crunches the
little guy, where it crunches those in the middle-income and lower
levels of income who do not have the beneficence of having the
Government provide their health care through the Medicaid Program,
where it crunches the little guy is in declining incomes in a slumping
economy at the same time of rising health insurance premiums; it gets
to the point they cannot afford it. That includes the rising cost of
prescription drugs.
Interestingly, we can get 52 votes in this Senate, a majority--plus
2--to modernize Medicare with a prescription drug benefit--but we can't
get the 60 votes required to cut off the filibuster.
Because of the slumping economy, Americans are faced with growing
uncertainty over job security. With corporate scandals, a slumping
stock market, a growing national debt and various forms of economic
turbulence related to September 11, it is no surprise that unemployment
is rising at a staggering rate. We have recently seen an increase in
the number of 60 to 70-year-olds in the workforce. They are trying to
make ends meet.
In the last 2 years, unemployment has jumped by 1.5 percent. More
than 2 million people, as I said earlier, have lost jobs in the last
year and two quarters, and many who have lost their jobs are having
trouble finding new work.
In my Orlando office we have a bright college intern. This is a
college graduate from one of our State universities who cannot get a
job. While this college graduate is biding his time, he has very
graciously come to offer his services as an intern in one of our
Florida offices.
Many who have lost their jobs, clearly are having trouble finding new
work. A million and a half people have been unemployed for over 6
months. Now they are also losing their unemployment insurance.
Last month, the Bureau of Labor Statistics reported that in the
previous month, manufacturing lost 68,000 jobs; retail businesses lost
55,000 jobs. Last month, over 8 million Americans were unemployed; over
2 million more, as we said, above January of 2001 figures. Two million
fewer people are working to support their families and contribute to
the economy. They are gone--two million taxpayers, two million people
forced to find other work because they lost their jobs.
In a slumping economy, it is no easy task to find new employment, as
that college graduate has found. People are now spending over 17 weeks
unemployed compared to an average of 12 weeks a year and a half ago.
The unemployment rate is rising--5.6 percent last month compared to
3.8 percent back in January of 2001, when the three Senators I see on
the floor were sworn in. It is a little over a year and a half ago. The
economy is failing, and we are arguing about the merits of extending
unemployment compensation for American families. That is what some of
the argument concerns. But instead of focusing on how to get the
economy going again, this administration is proposing new tax cuts for
the wealthy and extending those for the wealthy that were passed last
year.
New tax cuts in the year 2011 will have no immediate effect on our
economy. In fact, adding an additional $4 trillion in debt during the
next decade will only hurt our economy in the short term by pushing up
interest rates. What we ought to focus on is the slumping economy now
and how to correct it.
Right now, most Americans are distracted with thinking about the war
in Iraq and thinking about a war that is ongoing against terrorism.
These are life-and-death matters. These are the gravest concerns of the
Nation and should have our utmost attention, as it has had over the
last couple of months. But we also must pay attention to our bottom
line and to the economic security and the fundamental financial
strength of America.
To have military strength we need an undergirding of moral, and
economic strength. With projected huge deficits projected all over the
rest of this decade, can we really afford to dig an even deeper hole in
the next decade right at the time when the baby boomers are going to
start retiring and demanding more in terms of retirement and Social
Security and Medicare?
Last year's administration spending and tax cut plan has resulted in
today's collision course of more deficits, more debt, more economic
insecurity, higher interest rates, lower economic growth, and lower
employment. There is no way to sugar-coat that. You may as well say it
like it is. To anybody who says, ``Oh, why didn't you support the tax
cuts,'' I say I did. I supported a tax cut up to $1.2 trillion over a
decade. But what we said at that time was that is a responsible,
balanced approach. A $2 trillion tax cut, particularly skewed to the
latter end of the decade, is not a responsible way to rejuvenate our
economy.
All of this is occurring right under our noses. Yet it doesn't seem
as if there are a lot of folks in this Chamber, nor down there on
Pennsylvania Avenue, who are paying much attention.
I appreciate this ongoing dialog that we have had, but there seems to
be a war coming in the Middle East. So we better be paying attention to
other battles. We must do something to reinvigorate our economy. We
must pay attention to our Government's bottom line. We must not
continue to raise the debt for our grandchildren.
One of the things we can do in a slumping economy is get with the
appropriate kind of tax cuts, and we can stimulate the economy by
getting dollars into the pockets of people so they can go out and spend
it. That could start rejuvenating the economy. We have a Christmas
season coming up. It is going to be critical for retailers. We can do
that with a responsible tax cut.
[[Page S10555]]
We could also do that by extending unemployment benefits. The
unemployment insurance system was designed to provide aid when it is
needed most. When the economy is healthy, unemployment insurance
revenue rises because taxes are being paid. Program spending falls
because there are fewer unemployed.
Conversely, in a recession, unemployment insurance revenues fall
while spending rises, helping to stimulate the economy.
But the problem now is that American families in this economic
decline which has existed over many months are exhausting their
benefits, and they need our support. The unemployment insurance program
was designed exactly for the situation we are in today. This is the
rainy day for which unemployment insurance saves. If we would extend
those benefits from the required number of weeks that are under law
now, it would amount to an economic stimulus in the most direct way,
allowing families to continue functioning while they search for jobs in
this poor economy.
In the 1980s, when I had the privilege of being at the other end of
the Capitol in the House of Representatives, Democrats and Republicans
came together to agree to extend unemployment insurance--three times.
That is what we need to do today for some economic stimulus.
What we need to do is provide immediate fiscal relief for States. We
heard the Senator from West Virginia talking about the plight of the
States. They have this huge additional drain on these Medicaid funds.
States have diminished revenues. States need some assistance from the
Federal Government on Medicaid, which is health care for the poor.
Right now States are facing severe budget shortfalls, and many of them
are finding themselves forced to cut bedrock services such as
education, health care, and transportation. So the States need
assistance with these and other crucial programs.
What we need to do is to provide a strong bill to protect pensions.
We have heard these heartrending stories about the people of the Enron
Corporation and other corporations such as WorldCom. They have been
saving and playing by the rules. They have been working hard and
saving. Where have they been saving? They were saving in their
corporate pension plan. They had a retirement system.
We had several Floridians come up here because Enron had many
employees of the Florida Gas Company in the Orlando area with
headquarters in Winter Park. We had a number of those employees come up
here and tell how they had their entire life savings, and now--instead
of having their nest egg of about $750,000--because of the scandals in
that Enron Corporation, and because those pensioners were not
protected, they had less than $20,000 of retirement left out of
$750,000.
We need a plan that allows workers to hold employers accountable and
help workers get their money back. If people responsible for protecting
their investments abuse that trust, as we have seen over and over again
in the scandals that erupted last fall and that were played out in
front of the committees of this Senate--we need to make it easier for
workers to sell their company stock in those pension plans and
diversify their holdings.
Most importantly, what we need to do is have a serious debate about
how best to get our economy moving again. We need to think outside the
box and look at some fresh ideas such as those presented at last week's
bipartisan economic forum.
What we need to do is get this economy moving again. That is what we
need to do. What we need to do is focus on the needs of constituents
who elected us to serve here in this Chamber and to make decisions for
them, and to protect them in these many ways that I have tried to
enumerate in these remarks. What we need to do is focus our attention
and our resources on the American working family members.
It is a time of partisan politics. We are just before an election. I
guess my only disappointment in Washington in a job that I dearly
love--I love the work. I love the people, I love these Senators, and
they know I do. It is with a spring in my step that I come to work
every day. My only disappointment is that this place gets too
excessively partisan, and it gets too excessively ideologically rigid
and extreme.
So when the time comes, as the Good Book says, ``Come, let us reason
together,'' there is a poisoned atmosphere and there is a rigidity and
extremism so that it is hard to reach out and bring people together.
In a slumping economy, you have to be able to reach out and bring
people together. You have to be able to have Senators not insist that
it is their way or the highway, but yet they have to recognize there
are many people in this vast, broad, beautiful, complicated, and very
diverse country who need to be represented instead of just that
particular Senator's point of view. That is why our title is United
States Senator--to represent the entire country and to represent all
the people.
I hope as we wind down in the closing days of this session, as we
address some of these major economic problems, that we will consider it
in the spirit of building a consensus to solve these problems.
Thank you, Madam President, for the privilege of addressing the
Senate.
Mr. DAYTON. Madam President, will the Senator yield for a question?
Mr. NELSON of Florida. I certainly yield to a good friend, my
colleague, my wonderful companion as a freshman, the Senator from
Minnesota.
Mr. DAYTON. I thank the Senator from Florida.
I want to be sure I heard the Senator correctly.
First, I heard the Senator say earlier that the stock market dropped
by 35 percent from January of 2001 to the present time. Is that
correct? I was doing some mathematics here. Someone had holdings of
$50,000 in January of 2001, and those holdings are now worth only
$32,500; $17,500 of that would be lost.
Does the Senate recall the tax package which I opposed as being
skewed unfairly to the rich and giving a few hundred dollars in rebates
to the average taxpayer? I was thinking to myself: Whatever that amount
is, to lose $17,500 out of a $50,000 retirement savings in a 401(k) or
an IRA, it seems to me, is a pretty bad economic deal for most
Americans.
Does the Senator concur or is my math that bad?
Mr. NELSON of Florida. The Senator is absolutely right. And if you
just put it in round terms of someone with a nest egg of $100,000 a
year and two-thirds ago, in January of 2001, that is only worth $65,000
today. They have lost $35,000 of value in their retirement portfolio,
mirroring the stock market wealth, the total stock market wealth down
35 percent between January of 2001 and September of 2002. It is a sad
commentary.
Mr. DAYTON. Will the Senator yield for another question?
Mr. NELSON of Florida. I am happy to yield to the Senator.
Mr. DAYTON. I appreciate the Senator going back to that point in time
when the two of us and the Presiding Officer were sworn in here. I
recall, for myself, the excitement I felt back then of the
opportunities we had because the surpluses projected for the next
decade, at that time, were $5.4 trillion.
I wonder if the Senator recalls, as I can, the anticipation of all
the good things we could do on behalf of the people of Minnesota,
Florida, and the rest of the country.
In my campaign, I made a promise of prescription drug coverage for
every senior in Minnesota and sent busloads of seniors at the time up
to Canada where they could get prescription drugs for half or less than
half the cost of those same drugs in the United States.
I recall saying back then the solution was not to bus every senior
from Minnesota to Canada--and I think that would have been more
problematic to travel from Florida to Canada--but the solution was to
provide the kind of coverage here from our Government that the Canadian
Government provides.
I wonder if the Senator from Florida recalls other instances of the
kinds of hopes and dreams we shared back then as a freshmen group of
Senators as to what we could do for this country, and if you can think,
as I can, back to the days when we were talking about surpluses for 10
years rather than deficits.
Mr. NELSON of Florida. We had hopes and dreams. Indeed, we had
realistic plans, if we had been conservative in our approach, if we had
been balanced in our approach with that projected surplus.
First of all, we said: Those economic projections for a surplus are
way too
[[Page S10556]]
rosy. Let's be conservative in our planning. Let's scale back that
projected surplus so we can be conservative in what we plan for the
surplus.
Then we said: Let's be balanced. Let's have a substantial tax cut
that would be about a third of the surplus, and let's take another
third of the surplus and reserve that third, over the next decade, for
the spending increases that need to occur, such as the Senator talked
about, which is modernizing Medicare with a prescription drug benefit.
We knew, for example, defense expenditures were going to go up and,
therefore, there needed to be some spending increases there, and you
could go on down a host of other items.
Clearly, education was one of the major ones. We wanted to take a
good part of that surplus, projected over 10 years, and invest that in
education back to the States and local governments that run the
educational systems.
Then what we said was, to balance it out, the remaining third of that
surplus we did not want to do anything with. We wanted that to be the
surplus from the Social Security trust fund that was not going to be
touched. That part of the surplus was going to pay down the national
debt over the next 10 years.
That balanced approach of a third, a third, and a third was going to
get our fiscal house in order, was going to revive the confidence of
the American investor in American companies because the economy was
going to be stable. We were not going to have all these dire economic
facts we have recited tonight that would not have occurred if we had
been balanced in our approach.
Mr. DAYTON. I am glad the Senator brought up the balanced approach
and, earlier, the Social Security surpluses. Of course, the Senator
from Florida has a great many senior citizens in his State, and I have
a quite a number in mine. I would have even more if not so many of them
would move to Florida and enjoy your better climate.
But as I recall, President Clinton, when he departed office, had left
not only a balanced budget for the first time in this country in almost
30 years, but he had actually balanced the non-Social Security part of
the budget. So as the Senator said, the surpluses were accumulating in
the Social Security trust fund year by year that would pay down, I
believe it was, over $3 trillion of debt that would put our fiscal
house in order, that would be ready for the baby boom retirement years.
What happened to all of that financial responsibility in such a short
time? Does the Senator recall? Where did all that money go?
Mr. NELSON of Florida. Two-thirds of that projected surplus vanished
primarily because of the overeager, rosy, incorrect economic
projections of a budget surplus, plus absorbing so much more of the
existing surplus from a tax cut that exceeded that balanced approach I
talked about.
Mr. DAYTON. The Senator brought up earlier today, along with the
Senator from West Virginia, this terrible dilemma we face in the
Senate, that we cannot get a conference agreement with the House on
concurrent receipt for our veterans, for those who have served this
country, for those who have suffered injuries, disabilities, and the
like.
I believe the Senator was referring--maybe he could refresh my
memory--to the conference committee gathering this afternoon; we both
serve on the Armed Services Committee. I could not attend, but the
Senator, as I understood correctly, said the House conferees did not
even attend the gathering.
They did pass in the House by over 400 votes support for the Senate
position. But the White House, if I recall correctly, has now said the
President will veto the Defense authorization bill because it includes
concurrent receipt because it costs too much money.
Back when this $2 trillion tax cut was being discussed, this Senator
does not recall any real concern being expressed that we could not
afford it, and I hear now, over and over again, we cannot do
prescription drug coverage. We cannot even do Medicare reimbursement
equalization. We cannot do concurrent receipt for our veterans. We
cannot afford to do anything for benefits for people, such as extending
unemployment benefits, as the Senator pointed out, because we don't
have the money. But back when it was tax cuts for the wealthy, we
seemed to have all the money we needed.
Mr. NELSON of Florida. The Senator is correct. It is a sad commentary
all these things that were promised to veterans--that everybody was so
eager, elbowing one another aside to try to get to the front of the
line to support--through such things as concurrent receipt, eager to
get to the front of the line to support a prescription drug benefit for
Medicare seniors--have all been cast aside. Yet I cannot believe what I
am seeing on the television when I go home. I see all these TV
advertisements about how all these people who have blocked a
prescription drug benefit to modernize Medicare say they have voted for
one. Well, they voted for one. They voted for a version that was a
subsidy from the Federal Government to insurance companies supposedly
to provide prescription drug benefits. But in every State where a
similar law has been passed to get insurance companies to provide a
prescription drug benefit, the insurance companies will not do it
because they cannot make money on it and, therefore, the senior
citizens are the ones who suffer because they do not get the
prescription drug benefit.
So isn't it interesting they always want to run to the front of the
line and talk about how they are for all of these things, but when it
comes to doing it, where are the votes, particularly in a body such as
the Senate, in which in order to pass anything you have to get 60 of
100 Senators because of our rules to cut off debate?
Mr. DAYTON. If I may indulge the Senator for just another minute, the
Senator from Florida, being a former insurance commissioner and having
such a large senior population, I wonder if he could explain the point
he just made about how the insurance companies themselves don't want to
provide the kind of coverage that some of our colleagues claim would be
the solution to this problem.
Mr. NELSON of Florida. Since our colleague from Nevada has joined us,
I will use his State as an example. About 4 years ago, the State of
Nevada passed a prescription drug benefit that was very similar to the
one that has been sponsored by the White House and that, in fact, has
passed the House of Representatives. It is a subsidy to insurance
companies to provide a prescription drug benefit.
In the case of the bill here, it is a Federal subsidy. In the case of
Nevada, it was a State subsidy. But the fact is, not one insurance
company stepped forward in Nevada, after the passage of that law, to
offer a prescription drug benefit because the insurance companies want
to make money. They realized they could not make money.
Sure, we are having a problem with escalating costs of prescription
drugs, and we should deal with that, too. The question is, Are we going
to fulfill our promise to provide a legitimate and workable
prescription drug benefit to senior citizens on Medicare? We have
offered that, and we have only gotten 52 votes here. We have to get 60
to cut off debate. We need eight more Senators, and then that thing
will pass and pass overwhelmingly.
But you see what is being blocked right now. And then people back
home claim credit for voting for a version that really is not going to
be a workable version, as experienced in the laboratories that we see
out in our States.
Mr. DAYTON. The people who watch us debate must wonder about the
mathematics of the Congress. The Senator from Nevada, who is a champion
of the concurrent receipts legislation, sees it passed by the Senate
and then by over 400 votes in the House. And then it does seem strange
that these matters just can't quite make it through the rest of the
process to become law.
This Senator holds out hope that the administration, which is going
to be visiting my home State of Minnesota--we have not seen such an
interest by an administration in our State, in my own recollection--
will come in and seize the opportunity to support two things that would
be of great benefit to my State. One would be disaster assistance for
our farmers who have now suffered the second year in a row, and another
would be the support for concurrent receipt for our veterans. It would
seem a fitting way to recognize the kind of suffering some are still
going through
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and also the kind of contributions that have been made, once again, to
see that there would be the same enthusiasm for fitting within this
budget framework some of the benefits we would like to provide for our
citizens, the same as we provide for the very wealthiest corporate
executives who seem to be doing very well despite the difficult
economic times.
I thank the Senator from Florida for bringing these matters to the
Senate this evening. It was an excellent discussion. I look forward to
our continuing it again soon.
Mr. NELSON of Florida. I thank my distinguished colleague. It is
always a pleasure to hear from him. I appreciate his undergirding of my
comments this evening.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. REID. Madam President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
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