[Congressional Record Volume 153, Number 84 (Tuesday, May 22, 2007)]
[Senate]
[Pages S6418-S6419]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             2003 TAX CUTS

  Mr. BENNETT. Madam President, if there is one thing I hear over and 
over again when I talk to my constituents about where we are in this 
Congress, it is the request that we get together and work together and 
that we get something done. There is always some particular issue 
someone will raise that will have to do with immigration, that will 
have to do with taxes, that will have to do with Social Security, but 
underlying all these issues is the refrain: Why can't you people work 
together? Why can't you get something done? As one constituent put it, 
almost plaintively: Senator, is there any hope, or are you just going 
to bicker back and forth between the parties, as you have always done?
  Well, this month, there has been a sign of hope that I think we ought 
to make mention of that demonstrates that, in fact, maybe it is 
possible for us to work together on some of the more contentious 
issues. This sign of hope did not necessarily come from the Congress, 
it was an action that involved Members of Congress and members of the 
Bush administration, and it has to do with trade.
  There are many issues that divide the two parties, but one that has 
divided us as much as any has been the issue of trade, with the 
Democrats saying under no circumstances will we approve any more free-
trade agreements until we get the kinds of provisions with respect to 
labor standards that we insist on; and the Republicans have said and 
Republican administrations have said, those kinds of agreements are 
deal breakers; if we put those in the trade agreements, we make the 
trade agreement impossible to enforce. The two sides have yelled at 
each other over this issue now for years.
  Well, this month we have had a breakthrough, and I will quote from 
the newspaper articles with respect to this, first, from the New York 
Times and then from the Wall Street Journal. With a May 11 headline 
``Bush and Democrats in Accord on Labor Rights in Trade Deals,'' the 
New York Times said the following:

       The Bush administration and House Speaker Pelosi, breaking 
     a partisan impasse that had dragged on for months, reached an 
     agreement this evening on the rights of workers overseas to 
     join labor unions. Both sides predicted the agreement would 
     clear the way for congressional approval of several pending 
     trade agreements.

  This came as happy news to me. I was with the majority leader and a 
group of Senators when we went to South America, and we heard from the 
President of Peru that the most significant thing we could do in the 
United States to maintain good relations with Peru was to approve the 
Peru Free Trade Agreement. After this conversation, some of the 
Democratic Senators who were on that trip said to me: Bob, that is 
going to be very hard. It is going to be very difficult. We are not 
getting the kind of cooperation we feel we need out of the Bush 
administration. Well, now they have. It has been worked out.
  Again, back to The New York Times:

       Negotiations to complete the trade deals have been led by 
     Susan Schwab, United States Trade Representative on the 
     administration side, and by Representative Charles Rangel, 
     the New York Democrat who is Chairman of the Ways and Means 
     Committee on the House side.

  Good news. Both sides giving a little and getting something done. 
Then this paragraph from the New York Times:

       Despite the endorsement of Mr. Rangel and Speaker Pelosi, 
     many Democrats say that half or more of the Democrats in 
     Congress may vote against the deal, but the agreement is 
     expected to pass with strong backing among Republicans, whose 
     leaders will urge them to vote with President Bush.

  This reminds me of a meeting I had in the White House when Bill 
Clinton was the President. We were talking about how to deal with 
trade, and President Clinton said to the Members of Congress who were 
there: What do we need? The former Senator from New York, Pat Moynihan, 
sitting next to the President, spoke up and said: Sir, we need more 
Democrats. The Republicans are fine on this issue, it is the Democrats 
who are the problem.
  Well, we have had that breakthrough on trade. It is encouraging. The 
Wall Street Journal had this to say about it.

       The agreement announced last night by House Speaker Pelosi, 
     Treasury Secretary Henry Paulson, and other top officials and 
     lawmakers clears the hurdle to passage of some small 
     bilateral trade deals, and it could ultimately smooth the way 
     for broader trade measures such as renewing President Bush's 
     soon to expire authority to negotiate trade deals without the 
     threat of congressional amendments as well as a new global 
     trade agreement now being negotiated in the Doha round of 
     world trade talks.

  I raise this as a ray of hope and then as the background for a 
suggestion. I hope the sense of urgency that brought the two sides 
together on trade can apply to the question of the tax cuts and whether 
they will be made permanent. I was in New York yesterday with a group 
of representatives from Wall Street, from the venture capital community 
and those economists who deal with the question of growth and keeping 
the economy strong, and was interested to be told the one thing that 
would be the most important for them to keep the economy strong and 
growing was to keep the tax cuts that were enacted in 2003 in the law 
permanent.

  We asked some of those representatives what would happen if the tax 
cuts were to expire? The reaction we got was: Well, we assume that 
Congress will, of course, not let them expire because they have worked 
so well. They have made significant differences with respect to 
corporate governance and economic growth that, of course, they are 
going to be extended. Then I pointed out to them that if we stay on the 
track that was established in the budget bill that was passed, the 
budget bill that the Senator from New Hampshire talked about, those tax 
cuts will expire in 2010.
  The folks in New York were stunned. How could Congress do this? How 
could they allow that to expire in the face of the evidence that these 
tax cuts have been so beneficial? We said: Well, that is the path we 
are on. That is the glidepath that was set in this budget bill. The 
budget bill can be trumped by future budgets later on, but if nothing 
is done and we stay exactly as we are, these tax cuts are certain to 
expire.
  What will be the consequences? Well, we have turned to some experts 
who will make these kinds of projections and asked that question. We 
would like to talk about this. I am sure no one can see the detail on 
the chart, but I will do my best to highlight the visual impact. I will 
say, in all fairness, as I always say, these are projections, and every 
projection is wrong. I don't know whether it is wrong on the high side 
or wrong on the low side, but every projection we ever have about the 
future, that is specific, is wrong. Nonetheless, I think the basic 
trend that is shown in these charts is a legitimate trend.
  This first one talks about the number of jobs that will be created 
State by State if the tax cuts are made permanent. Now, don't pay 
attention to the numbers because you can't see them, look at the bars 
and let me identify the States that will see significant job growth if 
the tax cuts are made permanent.
  The biggest line is California, followed by Florida, Illinois, New 
York, Ohio, Pennsylvania, and Texas. It might be interesting to go back 
to those States and look at how those Senators from those States voted 
on the budget bill that would have the tax cuts expire. Jobs in 
California, Florida, Illinois, New York, Ohio, Pennsylvania, and Texas.
  Some of those States are complaining about their current economies. 
They are saying their unemployment rate is too high. Make the tax cuts 
permanent and you make a significant contribution to creating jobs in 
those States.
  What about economic growth in those States? Let's look at that chart. 
Basically, they are the same States, but there are some slight changes. 
Once again, this is the income growth

[[Page S6419]]

per State if the tax cuts are made permanent. And the winner, again, 
clearly, is California, followed by New York and Texas. But Michigan 
begins to show up, New Jersey begins to show up, along with Florida, 
Illinois, Ohio, and Pennsylvania. These are States, again, where they 
are saying: Our economic growth has been anemic, our job growth has 
been anemic. What can we do?
  The answer to what can we do? We can make the tax cuts permanent. 
Well, no, politically, we don't want to do that. Politically, it makes 
good rhetoric for us to attack the rich.
  One of the things we have to remember as we have these economic 
debates is the best thing you can do for someone who is poor is to find 
him a job. The best thing you can do for people who are at the bottom 
is to have strong economic growth. Who gets hurt the most in a 
recession? It is the poor. Who loses his job when unemployment goes up? 
It is the person with the least skills, who can least afford to lose 
his job.
  I remember a hearing in the Joint Economic Committee, when one of my 
colleagues, in the midst of the boom of the late 1990s, asked Chairman 
Greenspan: Who has benefitted the most from this boom, expecting the 
answer to be: Well, it is the people at the top; the people at the top 
have gotten all the money; the people at the top have benefitted from 
the boom, and we have to do something about that. Chairman Greenspan 
said, very emphatically and very firmly, the people who have benefitted 
the most from this booming economy are the people at the bottom. The 
bottom quintile have seen their life change, their lifestyle, their 
availability to income improve better than anybody else.
  We always single out Bill Gates as the richest person in the United 
States. Did Bill Gates get hurt with the recession? No. His lifestyle 
didn't change. He didn't lose his house. He wasn't in danger of being 
late on his mortgage payments because he didn't have any mortgage 
payments. The growth in the economy did not make that big an impact on 
his situation. But the people at the bottom, who were unable to get the 
jobs in the recession that began in 2000; the people at the bottom, who 
were unable to meet their bills with the recession of 2000; the people 
at the bottom, whose skills were such that they were the first laid 
off, they are the ones who have benefitted the most by the expansion 
that began with the passage of the tax cuts in 2003.
  They are the ones who were benefited the most when the unemployment 
rate fell below 5 percent. It is currently 4.4 percent.
  In my home State of Utah, the unemployment rate is 2.3 percent. Who 
is benefiting the most? It is the people who would otherwise be 
unemployed if the unemployment rate went back up to 6 percent.
  When we look at income growth per State, don't say that only benefits 
the fat cats; that only benefits the people at the top. Recognize that 
the best welfare you can do for anyone is to find them a job. The best 
life-changing experience you can create for someone is to have a strong 
economy where that person can work and grow their own savings and get 
slightly ahead.
  Chairman Greenspan was very firm about that, with respect to who 
benefited the most from the income growth of the 1990s. It is still 
true today. Who will get hurt if the tax cuts are not made permanent 
and the jobs represented on these charts do not materialize? It will be 
the people who lose their jobs.
  We, the Congress and the administration, demonstrated that we could 
get together on the trade deals. It was announced with great gladness 
that the Democrats who had said ``never'' and the Republicans who had 
said ``never'' were able, finally, to get together and make this thing 
work. Can't we do that with respect to tax policy? Can't we understand 
now that the tax policy has worked?
  Since the tax cuts were enacted, 8.5 million new jobs have grown up 
in the United States. More Americans are working today than ever in our 
history, both in total numbers and as a percentage of the workforce. 
Can't we celebrate that achievement and say let's keep in place the 
policies that caused it? Or will we continue to say, no, we can't let 
anything happen because, for some political reason we want to scare 
people, we want to use class warfare rhetoric; we want to say, no, this 
isn't really working, it is an illusion. Ignore the statistics. Ignore 
the facts.
  I think we can work together. I think we should work together. I 
think the facts are clear. We should endorse them and move ahead in 
that spirit.
  The ACTING PRESIDENT pro tempore. The Senator from Washington State 
is recognized.
  Ms. CANTWELL. Madam President, I ask unanimous consent to speak for 
10 minutes in morning business.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.

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