[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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