[Congressional Record Volume 149, Number 42 (Monday, March 17, 2003)]
[Senate]
[Pages S3811-S3813]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               THE BUDGET

  Mr. ALLARD. Mr. President, before I begin my remarks, I thank the 
budget chairman for his consideration. He is doing a great job. This is 
the first year he has assumed responsibility as chairman of the Budget 
Committee. In that position, he has expressed a willingness to work 
with all members of the Budget Committee and work with Members of the 
Senate to get a budget out of the Senate. I commend him for that 
effort.
  I think it was extremely disappointing not only to me but to the 
American people that last year we did not get a budget passed. That is 
the first thing that has to happen. If we want to see this process move 
forward in an orderly manner, we need to pass a budget.
  I rise today to make a few comments relating to the budget resolution 
that is before us. This resolution, in my view, is one of the most 
important, only next to the legislation committing and supporting our 
Armed Forces, which is perhaps the most important the Congress will 
consider.
  As my colleagues know, the budget resolution establishes the 
framework by which Congress will appropriate funds over the next year 
and it sets a model for the future. Further, this resolution will 
establish a series of important mechanisms for the enforcement of 
budget policy and outline important policy priorities to be ultimately 
determined by other Senate committees.
  I serve on the Senate Budget Committee, and I will take this 
opportunity to comment on the pending resolution, as well as a number 
of important choices facing this body as we proceed with this debate.
  I will make a few comments on the current climate. I have stated 
numerous times in recent years that continual increases in 
discretionary spending threaten the long-term fiscal stability of the 
Government and doom the taxpayer to greater long-term obligations. The 
slim window of historic surpluses we experienced in Washington from 
1998 through 2001 sparked a rapid spending spree, unlike virtually any 
this Nation has ever experienced.
  From the year 2000 to 2003, the Federal Government will have spent 
more than in any other 4-year period in the last 60 years, excluding 
the war years of World War II. When compared to the previous 4 years, 
1996 to 1999, the Government has increased spending by a startling $782 
billion, The 4-year cost per household of the Federal Government 
reaching $73,000. This reckless spending represents irresponsibility in 
the short term and far worse in the long term.

  Today our Nation stands in the midst of a war on terror and on the 
brink of a costly engagement with the savage totalitarian Government of 
Iraq. These are conflicts that this country did not ask for but 
obligations we must meet. Today's international landscape demands 
nothing less than total commitment to our Armed Forces. I am pleased 
this budget resolution meets that commitment. I would go one step 
further and state clearly the defense of the homeland and the 
protection of American interests is the paramount responsibility of the 
Federal Government in this Republic.
  By abandoning fiscal restraint and discretionary spending over the 
last 4 years, we have not only continued to bleed current and future 
taxpayers but created enormous fiscal obstacles to the prosecution of 
this Nation's defense.
  I will speak briefly on defense and the war on terror. The budget 
resolution reported by the committee provides for $400 billion for 
defense in fiscal year 2004. That is meeting the President's request 
for the continued aggressive prosecution of our war against terror 
around the world. The full amount of the President's request for 
Homeland Security is also included, the new Department of Homeland 
Security, growing from $21.3 billion in 2003 to $27.1 billion in 2004. 
These dollars will go to the securing of our borders, the training and 
supply of first responders, bioterrorism preparedness, and increased 
interagency coordination. I can think of no greater priority in these 
troubled times.
  In talking about the growth package and the tax cuts, perhaps the 
area of the budget which will face the greatest scrutiny this week will 
be the reconciliation instruction for the President's proposed growth 
package. This resolution provided for $698 billion from 2003 through 
2013 for growth, job creation, and tax relief. I support the 
President's approach to this growth proposal: Mixing tax relief 
targeted to working families, encouraging investment by the small 
business sector--which, I might add, is the backbone of this economy in 
this country--and eliminating the double taxation of dividends.
  A number of colleagues made clear they do not believe this package 
will stimulate the economy and insist the most stimulative effect would 
be through increased spending. This is not only an argument I fail to 
embrace, it is one I find dangerous in light of the incredible recent 
increases in spending that have proven ineffective in changing the 
economy.
  Today, Federal revenues are down for the second consecutive year. 
That is an unprecedented decrease. The Nasdaq stands at one-quarter of 
its value just 3 years ago. To those who claim that the Federal 
Government can spend its way out of such conditions, stimulating growth 
by absorbing more of America's paycheck, I ask where the evidence is 
that this, indeed, works.
  As I stated earlier, Congress has added $782 billion in spending over 
the last 4 years. In light of the sum of this regrettable spending 
spree, the President proposes a rather humble growth package over the 
course of the next 10 years. The amount provided in this resolution 
accommodates the acceleration of several key tax cuts already 
implemented into law such as the marriage penalty tax and the cut in 
marginal income tax rates. Further, there is room in this package to 
increase the child tax credit and increase small business expensing 
limits. These are very real ways to allow working Americans to keep 
more of their money, and to do so starting today. I trust they will 
know best what to do with these savings and can see only beneficial 
stimulus.

  With regard to the dividend proposal, the resolution also 
accommodates the President's desire to cut one of the Tax Code's most 
egregious examples of double taxation, that tax placed on corporate 
dividends. It is unfortunate that

[[Page S3812]]

dividend taxation is an area where the United States is a world leader, 
taxing dividends at a rate higher than any nation in the world other 
than Japan. I would like to be clear on the nature of this tax. It is a 
tax on capital. It makes capital more expensive. It makes doing 
business more expensive. Capital can be used far better by those 
innovating and investing in the private sector rather than through 
expanding government largess.
  The Wall Street Journal outlined the benefits of this proposal in a 
February 26 article. The Wall Street Journal reports that the dividend 
proposal would increase job creation by as many as 500,000 jobs per 
year over the next 5 years. That is an immediate and wonderful economic 
stimulus. Federal Reserve Chairman Alan Greenspan recently testified 
before Congress in support of the elimination of the double taxation of 
dividends as ``a benefit to virtually everyone in the economy over the 
long run.''
  Some in this body disagree with Mr. Greenspan and will attempt to 
wheel out their tired old incredible rhetoric by labeling this a tax 
cut for the rich. A half million more jobs is not a tax cut for the 
rich. I hope our dialog will be sophisticated enough to recognize this.
  Let me talk a little bit about our domestic priorities. I am pleased 
to share President Bush's commitment to a number of domestic priorities 
reflected in this budget. As a long-time advocate of a Medicare 
prescription drug benefit, I am glad to see an investment of $400 
billion over 10 years to strengthen Medicare. This unprecedented 
investment includes a prescription drug benefit for our Nation's 
seniors, allowing equity and access to the latest and most beneficial 
drugs on the market. The $400 billion will also be available for the 
improvement and modernization of Medicare, catastrophic coverage, and 
assistance to low-income beneficiaries. The President has made clear 
this is not simply another step in the expansion of the Medicare 
Program but a call for reform and enhanced efficiency.
  With the pending retirement of the baby boom generation, it is more 
important than ever that Medicare be built on a strong foundation and 
offer the most effective treatments possible. This budget follows in 
the bold footsteps of the No Child Left Behind Act, continuing the 
commitment made with that landmark legislation. This budget resolution 
offers the single largest ever financial support for education in 
America, going above and beyond the President's request. Title I grants 
to local education agencies will increase by $1 billion. The 
Individuals with Disabilities Education Act will see a $1 billion 
increase in part (B) grants to States, with additional funds available 
if a reauthorization bill is enacted that authorizes those additional 
funds.
  Now to enforcing our budget discipline. Last September, the historic 
Budget Enforcement Act expired. This lapse, along with the inability of 
the Senate to pass a budget resolution and 11 of 13 appropriations 
bills, meant the loss of significant controls on Federal spending. The 
resolution before the Senate today seeks to correct this failure and 
restores some budget discipline to the process. The resolution contains 
enforceable, discretionary budget caps for fiscal years 2003, 2004, and 
2005 consistent with the funding levels outlined by President Bush. 
This resolution also reinstates the 60-vote point of order against 
advanced appropriations as well as targeting nondefense emergency 
appropriations with a similar point of order. Perhaps the most 
important of all, the budget contains an extension of the pay-go point 
of order to limit unbudgeted mandatory spending increases over revenue 
decreases.
  Budget discipline has long been an area of keen interest to me, and I 
have to say I appreciate Chairman Nickles' commitment to enforcement, 
although I hope we will continue to work toward establishing greater 
controls in spending.
  Then a word about dynamic scoring: From a process standpoint, I am 
also very interested in expanding this discussion to include dynamic 
scoring. As my colleagues are aware, the Congressional Budget Office, 
various committees, and the administration generally rely on what is 
referred to as static scoring. That is, that legislation and revenue 
decreases are scored in terms of costs to the Federal Government, 
without factoring in the yield to the Government of the economic 
stimulus generated by that policy change.
  There are a number of States that have implemented dynamic scoring, 
including the State of California; and 40 States incorporate the 
principles of dynamic scoring in their budget calculation because they 
understand that it truly reflects what happens in the real world. That 
is why I am such an advocate of dynamic scoring, a process which I 
think reflects what will happen in the real world as a consequence of 
our budget.
  Earlier, I spoke of the dynamic benefit of the elimination of double 
taxation of dividends by quoting the Wall Street Journal and Chairman 
Greenspan. Mr. Greenspan, the Journal, the Heritage Foundation, and 
others have vociferously asserted that this proposal will lead to more 
jobs and, thus, the generation of more wage hours and taxes paid. Even 
the Clinton administration Director of OMB agrees there is some 
stimulus effect. Despite this highly credible choir of proponents, I 
cannot as yet, to date, propose a dynamic scoring for this proposal 
produced by this Congress because it doesn't reflect what happens in 
the real world. The proposed growth package is a perfect example of the 
need for dynamic scoring to be incorporated into this process.
  Is it so ridiculous to think that we could calculate the impact this 
package would have on job creation, increases in disposable income and 
savings, and even a return on Federal revenues due to economic 
activity?
  Let me go to the chart to reemphasize my point. I have here a chart 
which reflects what will happen to additional job creation with the 
President's stimulus package.
  The blue part of the bars on this chart reflects what would happen to 
our economy if we did not change the law at all, if we stayed just the 
way we are. On top of that, you will see the orange part of the bar, 
which reflects additional jobs that would be created with the 
President's economic growth package. An important part of that package 
is eliminating the double taxation on dividends.
  So, after 2004, 2005, as we move on out to 2008, we see that there is 
a substantial increase in the number of additional jobs.
  It is nice to talk about additional jobs. What does it do as far as 
money in Americans' pockets, in order to help the economy grow? The 
next chart shows the additional disposable income. This is the total 
amount of disposable income that would be available to Americans as we 
create these jobs through the President's job stimulus package, his 
economic stimulus package.
  The blue line again reflects what would happen if we did not change 
any of the current law. The orange part of those bars reflects the 
additional growth that would happen as a result of us passing the 
President's stimulus package. I think this is significant additional 
disposable income. That means Americans will have more money in their 
pockets to spend, businesses would have more money in their checkbooks 
in order to buy new equipment and create jobs. It is a job stimulus 
package that we need today. We don't need it 3 years from now; we need 
it today, and I do hope we can move ahead.

  Using the dynamic scoring model generated by the Heritage Foundation 
Center for Data Analysis, we can see the President's proposal generates 
a significant amount of growth in the economy and, in fact, gets far 
more bang for the buck than any increase in spending or Government 
handout. Current baseline projections for total employment forecast an 
unemployment rate of 5.4 percent in 2004. Incorporating the dynamic 
scoring method of measurement, we can see that would lower the rate to 
4.9 percent, or an addition of 997,000 jobs to the economy.
  In my home State of Colorado, more than 16,000 more jobs would be 
created in 2004 alone. I have a piece of paper here with me that 
reflects the amount of job growth we can expect in each State 
individually. For example, we can go to Alabama, the State of Senator 
Sessions. We heard his comments. There is a growth in 2004 of 15,100 
jobs. Over the 5-year period, it is going to be an average growth of 
13,840 jobs per

[[Page S3813]]

year, based on the President's economic growth plan. If we look at the 
President's stimulus package, what effect will it have?
  We can look to Kentucky, for example. The Presiding Officer 
understands Kentucky. With the President's growth package we can 
expect, in 2004, 13,900 new jobs with an average over the years up to 
2008 of 12,720 new jobs each year.
  I have how this will impact each individual State as we move through 
the years. It is important that we pass the President's job stimulus 
plan.
  I have been in Washington long enough to know better than to take job 
forecasts and predictions as gospel, but I also know that any policy 
that can potentially increase employment by almost a million jobs in 1 
year simply must be considered.
  I believe it is expected we at least try. There are individuals who 
say we should not do anything on economic growth and stimulus. I think 
that is the wrong approach. I think the American people expect some 
action to happen out of the Senate.
  There are those who say maybe we ought to just do increased spending. 
Many of my friends on the other side of the aisle are promoting an 
economic growth stimulus package that puts emphasis on more spending. 
My response to that is, if spending is the answer, with all the 
spending that has happened in the last 4 years, why isn't our economy 
growing?
  I think we have one thing we could do, that we should try at least, 
in order to stimulate that economy. I think we need to cut taxes. We 
need to cut taxes to stimulate the part of the economy that is most 
adversely affected, and that is the business sector of our economy, the 
small business sector--the double taxation of dividends. I have had one 
accountant tell me if we eliminate the double taxation on dividends, 
they are going to be recommending changes in the way that small 
business is organized and how they can do it in a way that will save 
money and bring money into the small business sector.
  I believe we must do more than just complain and criticize but come 
up with a plan of action. I see no plan of action from my colleagues 
opposing this proposal. Americans deserve to hear alternative plans and 
not just suggestions of negativity without action.
  I will bring my comments to a conclusion by simply stating I think 
this is a good budget proposal that is before us. I think it accounts 
for the President's economic stimulus package. Considering the 
condition of the Nation today, we need to pass an economic stimulus 
package. It addresses the immediate needs of defending this country as 
we are on the brink of moving into conflict. I think it is a reasonable 
budget. So standing here on the floor of the Senate, I express my 
support and hope the Members of the Senate will pass this budget 
because we need to have a budget this year.

  Having concluded my remarks, I yield back my time.

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