[Congressional Record Volume 150, Number 11 (Tuesday, February 3, 2004)]
[Senate]
[Pages S531-S535]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE PRESIDENT'S FISCAL YEAR 2005 BUDGET
Mr. DURBIN. Mr. President, I came to the floor to address President
Bush's fiscal year 2005 budget. This budget was presented to Congress
yesterday. It has been characterized by the Concord Coalition, and
others, as one of the most irresponsible Federal budgets to have been
filed. It continues President Bush's failed tax policies,
unfortunately, at the expense of Social Security and Medicare. It
shortchanges funding for schools. It shifts the burden of paying for
environmental cleanup from the polluters to ordinary taxpayers. And it
hurts States in the Midwest, such as my own State of Illinois, that are
facing terrible budget situations. It imposes new Federal mandates
without providing adequate Federal funds.
The budget is a fundamental reversal of the very things the President
said his administration stands for. It is not compassionate, it is not
conservative, and, sadly, it is not credible.
Why is it not compassionate? The President's budget again fails to
provide full funding for No Child Left Behind. This was the premier
education policy of the Bush administration, supported, on a bipartisan
basis, by this Senator and many others on the floor, with the
understanding that as we identified the weaknesses and shortcomings in
public education, we would come forward with the money to help the
students reach the level of testing where they should be.
Now we find in Illinois and States across the Nation that test scores
show that kids need help, and the Federal Government continues to say:
Take the test, announce whether you are a failing school or a
successful school, and we will provide you with less money than we ever
promised.
During the debate on No Child Left Behind, Senator Paul Wellstone of
Minnesota sat behind me. He opposed the program from the start. He
said: You are going to create a program where the tests become the
object of education rather than learning. Unfortunately, because the
tests create such high stakes, many teachers will have no recourse but
to teach to the test, thus dampening the enthusiasm to learn, the
creative element that is part of education.
That was Paul Wellstone's point. I said: Paul, I disagree with you.
Tests are about accountability. We have taken tests all through our
school years, and we should hold our students accountable, our teachers
accountable, our school boards and others accountable through testing.
So I disagreed with him on that premise.
Then he added: But I will tell you something else. When it comes to
providing the Federal resources that you are going to promise, I'll bet
they won't be there. When the schools need them, they won't get the
help from the Federal Government to improve the education of our
children.
Unfortunately, as I have traveled around Illinois, I am afraid former
Senator Paul Wellstone was right on both counts. We are finding more
and more teachers and principals and school boards complaining that
they are spending more and more time focusing on tests, doing their
level best to avoid being branded a failing school and facing sanctions
from the Federal Government. And when they find some students who are
not meeting the test standards, they are hard pressed to come up with
the tutoring that is necessary, the afterschool programs or summer
school programs to bring these kids back in the mainstream and to bring
them up to the level where they should be.
So what do we find in this budget from President Bush when it comes
to his premier policy on education? The law in No Child Left Behind
authorized $34.3 billion in funding to school districts in this next
fiscal year--$34.3 billion. The President's budget only provides $24.9
billion. The President's budget falls short by over $9 billion of
keeping its promise to the American schools and people that we would
give them a helping hand so that the kids could move forward in their
education.
In Illinois, a State which is facing a deficit, which is causing a
lot of hardship, we are going to lose over $250 million which would
have come to us had the President put in his budget a request for funds
adequate to fund his premier policy for education. So in Illinois we
are facing a mandate, No Child Left Behind, and no funds to pay for it.
Well, I can tell you, school districts around my State can think of a
lot of
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ways to help their students, ways that do not involve the test we are
sending them. Unfortunately, they do not have the resources to deal
with it. But they deal with the test, paid for by the Federal
Government, and do not have the resources to help the children.
When it comes to housing, the President's budget eliminates entirely
the Department of Housing and Urban Development's HOPE VI Program--the
only Federal program that focuses on revitalizing the Nation's most
distressed public housing developments. The Chicago Housing Authority
received $105 million in direct HOPE VI grants in fiscal year 2001 and
has also given approval to issue another $291 million worth of bonds.
HOPE VI provides grants and unprecedented flexibility to address
housing and social service needs. In Chicago, these grants were to be
used to demolish 4,500 aging public housing units and to replace 1,675
units with new ones in public and mixed-income housing.
In most States, including my own State of Illinois, we are facing a
terrible housing shortage. Working families are struggling to find
safe, decent places to live. If we do not provide a helping hand to
these working families, these families, with their children, will be
pushed into housing situations which, sadly, are going to be very
difficult for them to cope with. This decision by the administration to
eliminate HOPE VI funding, to say we cannot afford this limited Federal
commitment to help with public housing, is going to be an expensive
one.
The President's budget also will provide $12.7 billion in additional
Federal funding for Medicaid between the current fiscal year and 2009.
That sounds good: an additional $12.7 billion for Medicaid, but there
is a catch. The President's plan requires that Medicaid funding remain
budget neutral over a 10-year period. In other words, in 2011, 2012,
and 2013 money going to the States will have to be reduced by the
amount that they were compensated in higher payments early on in budget
years. Who can believe in these outyears the cost of medical care will
go down?
So as the costs go up, the States are going to be asked to give up
money that was paid them years before. That is not going to provide
health care for a lot of families, particularly lower income families
and those who cannot afford health insurance--unfortunately, a growing
class in our society.
When it comes to veterans benefits, for the second year in a row the
Bush administration proposes that veterans pay a larger share of their
health care costs.
All of us come and praise veterans, as we should, the men and women
who risk their lives for our country, some of whom I have seen recently
at Walter Reed Hospital, and many you find returning from Iraq and
Afghanistan. We are all there at the parades to shower them and their
families with praise for their contribution to America. But our
speeches are cheap and our words are hollow if we do not follow through
with support for veterans programs.
The President, in his budget, proposes increased fees for some
veterans, including a $250 annual enrollment fee and an increase in
monthly pharmaceutical copayments. Congress rejected both of these
proposals in recent years. The Bush administration comes back demanding
them in their budget.
I might say a word, too, about the global AIDS commitment of the
President. I thought the President spoke for this country and our
values when he stood up a year ago in his State of the Union speech and
said: Let's commit $15 billion over a 5-year period of time to fight
the global AIDS epidemic. But for the second year in a row, the
President's budget fails to meet his rhetorical promise to the world.
It falls short of his full commitment.
The President proposes $2.8 billion, which is again short of the $3
billion annual commitment over 5 years. Furthermore, the President's
budget proposes to cut our contributions to the Global Fund to Fight
AIDS, Tuberculosis, and Malaria. He cuts it by two-thirds, from $550
million this year to just $200 million in the upcoming year. The
problem grows. Our commitment to it recedes and backs off. That does
not help.
When it comes to the environment, in the proposed Bush budget, the
environmental programs sustained the second largest reduction of any
section of the budget, after agricultural programs. For the first time
since 1981--almost 22 years now--line items for environmental programs
were reduced for two consecutive years.
The President's budget will make taxpayers pay for even more of the
cost of cleaning up toxic waste sites in the Superfund Program.
Illinois has 40 such contaminated sites that are not to be cleaned up
because Superfund is broke. The President refuses to fund it, and the
President refuses to hold the polluters responsible. It means that
average taxpayers and families across my State will have to pay for
pollution caused by industries that are let off the hook by the Bush
budget.
The President is asking for $1.38 billion for the Superfund Program
this year, all of which will likely come from general revenues because
the administration has refused to reinstate the polluter pay program.
To pay for that increase, the President proposes cutting clean water
funding from $429 million to $94 million. Last year the Bush
administration proposed a 79-percent decrease in the same program.
In agriculture, this is the area hit hardest by the Bush budget. This
area sustained the largest cut with a reduction in discretionary
spending of 8.1 percent and conservation programs are the first
casualties. That is unfortunate, because preserving our soil and water
resources are absolutely critical to the future of farming and critical
to those who believe that we have a stewardship responsibility for the
land. That responsibility is not met.
The President's budget proposal imposes deep cuts in the COPS
Program, a program started under the Clinton administration, which has
been wildly successful. Cities and counties and local units of
government, States as well, have come to the Federal Government and
with a very simple application form brought more men and women in
uniform onto the streets of America, making it safer. President Bush's
fiscal year 2005 budget proposes no funding specifically for the hiring
of officers and instead provides $17.6 million for community policing
development initiatives, whatever that means.
Even if all of this funding were used to hire law enforcement and
school resource officers, it would be a 91-percent cut from the fiscal
year 2003 funding level. In Illinois, during fiscal year 2003, COPS
hiring grants provided funding for 123 full-time police officers. A cut
of 91 percent that the President proposes would mean 111 fewer police
officers patrolling Illinois neighborhoods and schools. This is a step
in the wrong direction. This program is not only popular; it is needed.
When it comes to homeland security, we can do better than the Bush
budget. In Illinois, 671 law enforcement agencies have directly
benefited from funding made available through the COPS Program since it
was created in 1994. Since that time, over $410 million in COPS grants
have been awarded to my State. These grants have funded 5,832
additional police officers and deputies, as well as additional school
resource officers who break up gangs and try to find out when children
who have problems attending school have much bigger problems at home
than even teachers realize.
The President's 2005 budget request for homeland security includes
$3.6 billion in the Office of Domestic Preparedness. This funding
request represents a 19-percent overall decrease from this year, when
$4.4 million was available. So we see that in areas of homeland
security, this budget makes cuts.
I am very concerned about this budget. I am also concerned about the
fact that this is not a conservative budget. How can you claim to be
conservative, as President Bush says he is, when his budget is swimming
in more than $500 billion worth of red ink? Let me show you some charts
which graphically tell the story.
Every minute the Bush administration spends $991,000 more than it
takes in. A few years ago we had a budget surplus under the Clinton
administration. The number was $236 billion. A few years later, under
this administration, we are anticipating a deficit of $521 billion. So
that is a swing of $757 billion from surplus to deficit. It gets worse.
We have asked the President year in and year out: How can you justify
this?
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Look at the quotes from the President and this administration. He said
in 2001:
[We] can proceed with tax relief without fear of budget
deficits. . . .
Sadly, he was wrong.
In 2002, the President said:
[O]ur budget will run a deficit that will be small and
short-term. . . .
That is certainly not the case. We are facing recordbreaking
deficits.
In 2003:
Our current deficit . . . is not large by historical
standards and is manageable. . . .
Wrong again.
In 2004:
The deficit will be cut in half over the next five years. .
. .
Clearly, he is going to be wrong again on that projection.
Then you take a look at the claim that he will cut the budget deficit
in half and you see that it is not credible. By 2009, the operating
deficit is likely to be far larger than $237 billion. This is the
deficit claim. This is the Social Security surplus which will be
included in regular spending for our Government so that the President
reaches his goal nominally when, in fact, he is doing it at the expense
of Social Security.
The Medicare surplus will be raided for $23 billion. The alternative
minimum tax, which I predict will be the biggest single family tax
issue this Congress faces over the next 5 years, to even fix that would
cost $55 billion by 2009.
And then, of course, we have the additional cost for war. Isn't it
interesting that the President's budget doesn't include the cost of the
war in Afghanistan and in Iraq, nor does it include increases in
homeland security? So the deficit we are talking about doesn't even
take into account the billion dollars per week we are spending on that
war effort.
Let me tell you how the President will maintain his spending when he
runs out of money. President Bush's budget hides the full story. Every
penny of the Social Security surplus will be spent by this
administration under their proposed budget plan. The amount of Social
Security surplus saved between 2005 and 2014: Zero. The amount of
Social Security surplus spent in that same period of time: $2.4
trillion. Instead of strengthening Social Security and Medicare as the
baby boomers arrive, President Bush's budget plan will make them weaker
than ever in our history.
Let me also take a look at what happens with the Bush budget when you
look at the full story. The President said repeatedly in his State of
the Union Address that the key to our economic prosperity is to make
his tax cuts permanent. I think, frankly, the first round of tax cuts
were not advisable and were unwise. Not because we didn't need a tax
cut and a stimulus but because the majority of the tax breaks went to
the wealthiest people in America. The President has said we have to
continue on that course, continue to give tax breaks to the highest
income Americans.
Sadly, if we follow the President's advice and make those tax cuts
permanent, take a look at what this means in terms of the long-term
budget picture: a $1.6 trillion, 10-year cost to extend the tax cuts.
How can this be sensible, prudent, or conservative? It is a spending
spree and cutting spree that fails to take into account the ultimate
cost.
I mentioned the cost of the AMT reform, the alternative minimum tax.
Just 3 or 4 million people are currently paying this tax. But the way
it is geared to take into account inflation, millions more will be
brought in to pay this tax. In fact, many families are going to learn
that they are paying more in alternative minimum tax than any other
tax. You can expect to hear from them. The President ignores this
reality. The cost of reform of this alternative minimum tax goes
through the roof if we don't do this and do it quickly. Sadly, there is
no suggestion that we even consider the problem.
Incidentally, when you take a look at the amount provided in
President Bush's budget for ongoing military operations in Iraq and
Afghanistan and the war on terror, there is zero provided. So in
addition to the budget document we are considering, we will have a
supplemental appropriations bill much later in the year which will add
on more spending which we must have to sustain the troops in the field.
How much: $280 billion is the anticipated cost between 2005 and 2014--a
hidden cost which the Bush administration doesn't want to deal with
directly in their budget document.
The gross Federal debt, assuming extension of Republican tax cuts on
a permanent basis, AMT reform, and defense policies, $15.1 trillion in
2014. What a wonderful and glorious gift we are leaving our children
and grandchildren. We are spending them into a debt that, frankly, they
are going to have to deal with for the rest of their natural lives.
What do the Bush administration's irresponsible fiscal policies mean?
By 2009, each person will have a share of the national debt which will
total $35,283. So the President says for the average family: We will
send you a check for $300 or $400 for each member of the family, and we
will give you a little bit of a helping hand.
What he doesn't tell you is that, at the same time, he is mortgaging
the future of this country. For what? For tax cuts for wealthy people.
How do we pay off our debt in this country, how do we sustain it, if
we are spending $991,000 a minute more than we are bringing in as the
Bush budget proposes? There is only one way to sustain our economy and
to pay off that debt. That is to borrow money. Which countries come up
to the window and want to buy the securities to fund America's debt?
Take a look at the list. The top 10 countries holding America's
national debt: Japan, $526 billion; China, $144 billion, United
Kingdom, $112 billion. The list goes down the line.
Isn't it interesting that the countries that are holding our national
debt in many instances are the same countries that have substantial
trade surpluses with the United States? In fact, the two fit together.
When China, for example, which now has an inordinate trade surplus with
the United States, wants to make good on the extra dollars they have,
they buy securities and pay off our national debt in that regard. So we
end up beholden to the banking systems in these countries that,
frankly, are holding America's debt. They have a powerful position.
That has become a reality. In order to fund this debt--the largest
deficit in our country, a debt that will grow to record proportions--we
do two things. We borrow all the money in the Social Security trust
fund and from the Medicare trust fund, and then we turn to nations
around the world and ask them to buy the securities to sustain our
debt. That is the future which the President is suggesting to us.
During the course of the State of the Union Address, the President
said at one point--I remember it well--that manufacturing jobs are
increasing. I can say to the President, whether it is the State of
Illinois or Iowa or Michigan, manufacturing jobs are not increasing.
They are increasing in China. We have lost 20 percent of our
manufacturing jobs in the last 5 years, and in Illinois there is no end
in sight.
Sadly, as you see the shrinking of our economy in each State, with
more than 3 million jobs lost under the Bush administration, you
understand that we are not only spending ourselves into long-term debt,
we are not getting what is essential for America, and that is
strengthening our economic base, making certain that our schools are
the best, that we are training our children for the quality jobs of the
future, making certain businesses have a helping hand from Government
to help meet their health insurance obligations to employees, making
certain that our trade laws are enforced in a fair way.
I am a Democratic Senator who has voted for free trade in the past. I
believe globalization is as inevitable as gravity. But we have to
understand that simply entering into a trade agreement is no assurance
that the other party--other country in this case--will live up to the
terms of the agreement. We have seen case after case--steel is a
classic example, where countries such as Brazil, Japan, and Russia
started dumping steel in the U.S. By ``dumping,'' I mean selling it at
lower than the cost of production. They were not only trying to bring
in dollars from the U.S.; they were trying to close down the American
steel industry. Sadly, they were successful, to some extent.
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What does it mean today to us to have fewer steel companies and fewer
steelmaking jobs? Let me give you one illustration. Today, in Iraq,
there are 8,400 Humvees that our troops are using in the field. These
8,400 vehicles are special problems for us because they are not
equipped with armored plating. If you go to Walter Reed and meet the
amputees and injured soldiers, many will tell you: Senator, do
something to make the Humvees safer.
So when I went to the Department of the Army and said, ``What are you
going to do about the armored doors needed on Humvees?'' they said,
``It is our highest priority.'' I asked them how they would make them.
They said they are going to turn to arsenals in Rock Island and
Anniston Depot and contract it out. I asked: How long will it take to
make 8,400 armored doors and get them there as quickly as possible to
protect our soldiers? They said: If we work night and day, we can get
it done in 1 year. One year? During World War II, we were building
bombers every 12 hours and ships every 30 days, and we need a year to
build 8,400 sets of doors to protect these Humvees?
I was incredulous and asked why. They said: Senator, we only have one
steelmaking plant left in America, which is in Pennsylvania, which has
the capacity to make the steel we need for the armor on these doors.
There is one left in America.
When countries violate trade agreements and dump steel in the U.S.,
ruin our steel industry, close down the businesses, kill the jobs,
endanger retiree benefits--after that happens, we find ourselves in
this situation where we need steel, the best in the world need it
desperately, and we cannot make it in the U.S.
When the President talks about a strong America in the future, it
involves education and job training and helping businesses pay for
health insurance but also enforcing trade agreements. I supported the
President's tariffs on steel as the only way to answer this dumping of
steel. Are we going to quit now, since the WTO has threatened they will
impose $2 billion in tariffs? I hope not. Frankly, I think we need to
take a more aggressive stand when it comes to building our economy and
jobs for the future.
Don't tell me we are in a recovery. A jobless recovery is no recovery
at all. Families who are still unemployed and cannot meet the basic
obligations to keep their families together are not families that are
better off just because productivity is higher in America. We need a
stronger economy that has good growth, including jobs. Right now, we
are far from it. The Bush budget doesn't move us in that direction. It
is not a credible budget, a compassionate budget; it is not a
conservative budget; it is a testament to a failed economic policy,
where the U.S. economy is not back on its feet, where we continue to
see people losing their jobs, where good-paying jobs are going
overseas, and little or nothing is being done.
That will be an issue which drives this electorate in this election,
as it should. As we review the budget, I hope Members of Congress will
step back and realize that making tax cuts for the wealthy permanent
policy in this country will guarantee weakness in Social Security and
Medicare for generations to come. If that is the reason my colleagues
believe they came to the Senate, then they should stand and cheer this
budget. But if they feel a special obligation, as I do and many
colleagues do, to Social Security and Medicare, we should demand more.
How can you claim to be conservative when your budget is swimming in
more than $500 billion worth of red ink? The President is proposing a
paltry $53 billion in revenue-raising measures to offset the budget's
$1.3 trillion in tax cuts. And he's proposing changes in the budget
process that will make it harder to increase spending on important
social programs down the road while failing to place similar
constraints on Congress's ability to extend tax giveaways to the rich.
The cost of extending the tax cuts alone will reach $1.6 trillion
between 2005-2014. Before the end of this fiscal year, Congress will
have to raise the debt ceiling--currently at $7.4 trillion once again.
The continuation of the administration's policies could produce a
national debt of greater than $15 trillion by 2014. Is this fiscal
conservatism?
Even the unofficial voice of the right seems shocked by the fiscal
irresponsibility of this administration. Talk show host Rush Limbaugh
weighed in on the gloomy fiscal picture painted by this budget on his
nationally broadcast radio program. ``Bush has outspent Clinton,''
Limbaugh told listeners last Thursday. ``I hate to say this; I'm sorry
folks.''
And how can you claim to be credible when you increase funding for
missions to outer space, provide even more tax breaks for the wealthy
but cut money for community oriented policing, for higher education and
for critical transportation projects?
In 2000, our Nation had a $236 billion surplus; in 4 short years, the
Bush administration has managed to turn that into a deficit for the
current fiscal year that they project to be $521 billion. CBO estimates
the fiscal year 2004 deficit will be closer to $477 billion. Either
way, that is a striking turn of events, and neither figure tells the
full story. Once Social Security is factored out of the budget, the
OMB's fiscal year 2004 projected deficit soars to $675 billion.
The President claims his budget will cut the deficit in half in 3
years. This promise speaks directly to the credibility gap facing this
administration. The President simply isn't leveling with the American
people; we've heard this story before.
In 2001, the President, upon inheriting a fiscally sound house, told
us that ``we can proceed with tax relief without fear of budget
deficits.'' He was wrong.
In 2002, when it was clear that this wasn't the case, he told us that
``our budget will run a deficit that will be small and short-term.''
Wrong again.
In 2003, he said, ``Our current deficit is not large by historical
standards and is manageable.'' Once again, wrong.
Now he is promising to cut the deficit by half over the next 3 years
and is focusing his deficit reduction plan on limiting domestic
discretionary spending. That is not a credible solution. Growth in
domestic discretionary spending has been almost non-existent over the
past 2 years. Out-of-control spending did not cause these record
deficits. The President's irresponsible tax cuts for the wealthiest
Americans did.
The OMB's estimates were $134 billion greater than the estimates the
Bush administration used to build support for the program in Congress.
Democrats in the House are calling for an investigation into when the
President knew that the number would be much higher than the one used
during deliberations.
The $521 figure is slightly inflated. No one else is this high. CBO
is $477 billion. The $521 includes $20 billion in lower revenue
estimates for fiscal year 2004 just to be ``careful.'' This would
certainly make it easier to cut the deficit in half if the baseline
from which you are cutting is artificially inflated tens of billions of
dollars higher than anyone else's estimates of that baseline.
Another component of the credibility gap is that the President is
engaged in a high-stakes shell game, shifting the actual responsibility
for paying for his policies until after he has left town and hiding
their true costs from sight in the current budget.
The administration provides no estimates of the cumulative 10-year
deficit in this budget, thus masking the real long-term costs of these
policies. Groups on the right and the left have estimated that the
administration's policies will add over $5 trillion to the federal debt
over the next 10 years.
The budget does not include the full cost of the supplemental
spending in Iraq that was passed last year, some of which will take
place during this fiscal year. We know we will be in Iraq. Why isn't
all of this money included in the DOD budget?
Furthermore, the CBO says that as late as 2009, we may still face
tens of billions in costs to fight terrorism. Yet, these funds are not
included in the budget either. The President has added $250 billion in
supplemental requests since taking office; we can certainly expect more
of these in the future.
The President's budget ignores the impeding retirement of the baby
boomers, and fails to factor in the full cost of the Alternative
Minimum Tax relief he requests in this budget.
Finally, despite promising during this campaign to make Social
Security solvent, the administration's budget proposals will use every
penny of the
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Social Security surplus over the next 10 years to pay the bills we are
racking up today.
Mr. KYL. Mr. President, I will respond to my colleague from Illinois.
First, regarding the budget deficit, and comments made earlier
regarding intelligence issues, I will find it interesting to see
whether those who are so concerned about the Federal budget deficit
will back up their words with actions by voting against runaway
spending.
Alan Greenspan, head of the Federal Reserve, says the biggest problem
is that Congress cannot restrain its bad spending habits. So for
colleagues such as the Senator from Illinois--will they vote against
the $30 billion in subsidies in the energy bill? Will they vote against
twice that much in unpaid for highway funding--that is to say, unpaid
for in the highway trust fund? It will be interesting to see how those
who complain about the deficits actually vote when it comes to adding
to the deficit.
Remember that last year, when we had a whole series of votes, when
the Republican majority finally got a budget passed, we had to defeat a
whole series of amendments by our Democratic colleagues--we usually got
51 or 52 votes--because almost all of the members of the Democratic
Caucus voted in favor of spending more money in these amendments. We
defeated something like $88 billion in spending amendments offered by
our Democratic colleagues. Thank goodness we did. That amounted to over
a trillion dollars in savings over the 10-year period of the budget.
So for my Democratic colleagues to complain about spending and budget
deficits and then go on and vote for the projects that they can brag
about back home, I think that at least is--shall we call it a
dichotomy, in any event.
What about this business of tax cuts for the wealthy? Actually, I
have some statistics here which I think are interesting. It shows that
the reduction of the tax rate, the top marginal rate--these are the
``wealthy'' that our Democratic colleague spoke about--actually, mostly
helps small businessowners, the very people who create the bulk of the
jobs in this country.
You cannot have it both ways, my friends. You cannot complain on the
one hand that we are cutting taxes for the people who create the jobs
and then complain we are not doing anything to create jobs. That is
just exactly what the tax rate reductions on the highest marginal rate
accomplished. About 78 percent of that savings went to small
businessowners. These are the people who pay at the top individual
rate. They are subchapter S corporations or partnerships; we call them
flowthrough entities, which pay at the top individual tax rate. They
are small business employers. Sixty-two percent of the income tax
filers in the top bracket are small businessowners, and 98 percent of
the companies are small businesses.
According to the Small Business Administration, 75 percent of all of
the new jobs are created by small businesses, which would suggest that
small businesses created over 2 million of the 2.8 million jobs added
since the start of 2002. How were these small businesses able to create
those jobs? They had the capital to invest to do so. How did they get
the capital? We cut their marginal income tax rates. Again, they
received, by far and away, over three-fourths of all the relief that
went to the top filers, the small businessowners, by cutting that rate.
Tax cut for the rich? No. It was for the small businessowners to
create the jobs that have gotten our economy moving again.
Let's recall who actually pays the taxes in this country. These are
Internal Revenue figures, I might add. The top 1 percent of taxpayers
pays over a third of all of the taxes. One-third of all the taxes are
paid by 1 percent of our population. The top 5 percent of the taxpayers
pay over half, 53.4 percent. So just the top 5 out of 100 are paying
more than half of all the income taxes in the country. The top 10
percent pay about 65 percent--in other words, almost two-thirds.
How much does the top 50 percent pay? Ninety-six percent. In other
words, the bottom 50 percent of taxpayers in this country pay less than
4 percent of the taxes. So divide the taxpayers in this country into
two parts. One of our Democratic colleagues running for President is
fond of saying there are two Americas out there: the wealthy and not so
wealthy.
Let's take the top 50 percent and the bottom 50 percent. The top 50
percent is paying 96 percent of the taxes, and the bottom 50 percent is
paying less than 4 percent of the taxes. Naturally, if we are going to
give a tax cut to taxpayers, you are going to be cutting the taxes of
those who are paying most of the taxes. But I wouldn't call these
people all rich.
As a matter of fact, if you look at the categories, the top 50
percent makes $28,528. I wouldn't call that rich. How about the top 25
percent? We ought to be getting into the rich category here: $56,000
income a year. Raising a family of four, that is not exactly a big
income these days. You can get by on it, but I wouldn't call those
people wealthy or ``the rich.''
I think we have to be a little bit careful. And I know my colleagues
wouldn't do this, but there are those outside this Chamber who would
demagog this issue saying it is all about dividing America between the
wealthy and the deserving, the so-called middle class.
We appreciate the fact that America is made up of every stripe of
folks, and they all contribute in one way or another, but when it comes
to creating jobs, it turns out if you reduce the highest marginal rate,
which is what we did, what we have done is to reduce the rate for small
businesses which have created the jobs that have gotten the economy
going again. That is the effect of the tax relief that was recommended
by President Bush and this Congress approved.
I suggest we give a little credit to the President for helping to
stimulate the economy, create jobs, provide economic growth that is
unparalleled. We had over 8 percent growth in the third quarter last
year, and 4 percent in the last quarter. The stock market is doing very
well.
It seems to me the message ought to be one of hope; that we have
turned this recession around; that we have reduced taxes. As a result,
we are creating jobs and actually things are looking pretty good.
If our Democratic colleagues would like to help us keep a lid on
spending, then stop voting for every amendment that spends more money.
It is pretty much that simple, Mr. President.
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