[Congressional Record Volume 154, Number 9 (Tuesday, January 22, 2008)]
[Senate]
[Pages S23-S25]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SENATE GRIDLOCK AND ECONOMIC STIMULUS
Mr. DURBIN. Mr. President, I thank my colleague from Texas for
speaking to a higher level of bipartisan cooperation in the Senate.
I sensed this in returning to Illinois and out on the campaign trail
for my colleague, Senator Obama, that this is a sentiment widely
shared. The American people understand we have a lot of challenges in
this country, and they also understand it is easy to gridlock the
Senate.
We had an all-time record number of filibusters initiated by the
minority side of the aisle this last year. Sixty-two, I believe, was
the final count, which eclipsed the 2-year record of 62 filibusters
that had been prevailing. Certainly, we all know how to stop this train
in the Senate. Minority rights are well respected by the Senate rules.
And 15 minutes into our service in the Senate, you might hear the words
``unanimous consent,'' and realize: Well, I will be darned. If I stand
up and object, everything stops. And it is a fact.
Many Senators have used that for valid and invalid reasons, but it
has been used a lot. We have one Senator on the other side of the aisle
who takes pride in the fact that he has singlehandedly stopped 150
pieces of legislation from even being debated and considered on the
Senate floor. Many of them are not even controversial.
I hope we find a way around this. I want to respect every Senator's
right, but if we truly want bipartisan cooperation, there are ways to
achieve that. Using filibusters would not be that; objecting to bills
just categorically would not be that approach either. But the one thing
the American people certainly want us to do is to wake up and smell the
coffee. And this morning, if you woke up and smelled the coffee, you
also smelled something burning on Wall Street. What is burning is the
Dow Jones Industrial Average. I do not know what it is at this moment,
but it has been pretty awful starting this day, and it has been pretty
awful for a long time.
It is interesting in American politics that when I first started
running for Congress 25 years ago, the most important information for
most voters was how many people were unemployed. And the monthly
reports on unemployment really kind of fueled the campaign. If a
President had more and more people out of work, there was a downturn in
the economy and a downturn in that President's popularity. That was
historically the standard. But over time we have stopped talking about
the unemployment figures as much and tend to watch the stock market a
lot more.
I think it has to do with many of us have our retirement savings tied
up in mutual funds and 401(k)s and IRAs. And so what happens is the
stock market, at least in the back of our minds, is how I am doing. If
the stock market is not doing well, my family is not doing well. So
when the news came out yesterday that the bottom is falling out of
international markets, and the Dow Jones opens with a tremendous slump
of 400 points or more, people understand something is not right.
Last week, the Secretary of the Treasury, Mr. Paulson, called me and
many leaders in the Senate and all but acknowledged that we need to do
something, and do it in a hurry, if we are going to try to stop this
economy from sliding into a recession.
Well, I agree with him completely. If you look at what we have done
over the past 7 years, to many of us it is no surprise where we are
today. There were many on the Republican side who argued for years and
years, and still continue to argue, that tax cuts for the wealthiest
people in America are the answer to everything.
If you have a surplus, you need a tax cut. If you have a deficit and
need to stimulate the economy, you need a tax cut. You always need a
tax cut. This kind of moralistic position of cutting taxes for the
wealthiest people in America has been the basic doctrine of the
Republicans in leadership for a long time.
They have had their way: President Bush's tax cuts, even though they
have generated the highest deficits in our history; a greater
dependence on foreign countries and foreign capital than ever before;
the fact that the President made history, in an unusual way, in calling
for more tax cuts in the midst of a war.
All of these things notwithstanding, our economy is slumping. There
are a lot of reasons for that. One of the reasons, of course, is we
have ignored the obvious. The strength of America is the strength of
our families. And 40 percent of the families in America do not get
close to the numbers that Republicans consider to be the right level
for tax cuts.
Over 40 percent of the people in this Nation struggle in an effort to
pay their bills and really live paycheck to paycheck.
It doesn't take much to derail that family train, whether it is the
loss of a job or serious illness or some other catastrophe. These
people have not been a priority of the Republican leadership in the
Senate, the House, or the White House. Now comes the time when the
economy is slumping, and all of a sudden this group that had been
ignored for so long by Republicans in their tax-cutting priorities is,
front and center, the centerpiece for saving the American economy.
Welcome to real America, I say to my colleagues. These are the people
who have been struggling for a long time and waiting to be
rediscovered. They should be rediscovered.
I am troubled to learn--at least some speculation is out there--that
this so-called stimulus package is going to be limited so that it still
doesn't help those in middle-income status or lower middle-income
status, those working families who really do put up a struggle trying
to get by. You don't have to spend much time out in the real world to
meet them. They are not the legendary welfare kings and queens. These
people get up and go to work every morning. They work hard. They don't
make a lot of money. They struggle with no health insurance or health
insurance that is virtually worthless. They struggle with trying to
fill up a gas tank. It may be a beat-up old car, but it is their
lifeline to get to work, to make a paycheck, to keep things going. They
struggle with heating bills in a harsh and cold winter. They struggle
with the dream of a college education for their kids and pray they will
have a better life. These are the real-world struggles of real families
who have been largely ignored in this economic debate in Washington.
When we get down to a discussion of an economic stimulus package, we
ignore these families again at our peril. Any stimulus package that
fails to acknowledge their need will fail to stimulate the economy. I
don't know what the parameters will be. Targeted, temporary--all of
these things make sense. But let's make sure we are doing the right
thing for the right people.
Many people go to work every day making a minimum income. They
struggle to get by. At the end of the day, they pay their taxes but
don't have a Federal income tax liability. How can that be? They are
paying their Social Security taxes, they are paying the Medicare
requirements, all of the things all workers have to pay. But they don't
make enough money because of the size of the family to be liable for
Federal income tax.
Who are these people? I can give an example. We estimate that 40
percent of all households may not make enough to qualify for one of the
proposed stimulus packages. Families of four making less than $25,000 a
year would get nothing. A family of four making $25,000 a year, if it
isn't given a refundable tax credit, will receive nothing by way of a
stimulus check.
What does a family do if they are making $25,000 a year and receives
$1,600, let's say, from the Federal Government? Well, if you are trying
to get by on $2,000 a month, $1,600 from the Federal Government may be
the answer to your prayers. You may finally be able to turn around and
buy something you have put off for a long time. You may be able to
catch up on some of your bills. Getting $1,600 when you are making
$2,000 a month is a big deal.
Let's look at the other end of the equation. What if you are making
$20,000 a month and you get $1,600 more? That is nice. I am sure there
is something you can do. Will it change your lifestyle? Will it change
the economy? It is not as likely.
That goes back to something I learned a long time ago from a Jesuit
[[Page S24]]
priest who taught economics at Georgetown University called the
marginal propensity to save. For every dollar you are given, what is
the likelihood you will spend it and the likelihood you will save it?
Economists look at that, and they know that if you are in a lower
income group, you are less likely to save, more likely to spend,
because you are living paycheck to paycheck. If you have a lot of
money, you are more likely to save and less likely to spend because you
are meeting your needs each paycheck. So when we devise a stimulus
package, let's make sure we keep that fundamental rule of economics in
mind. Let's make sure struggling families at lower incomes aren't left
behind. The fact that they don't pay income tax doesn't mean they are
tax free. They do pay taxes for Social Security, for Medicare, other
things--sales tax, for example. This is the targeted group when it
comes to a real stimulus.
I ask unanimous consent to have printed in the Record a letter sent
to all Members in leadership on January 18 from John Sweeney. John is
president of the American Federation of Labor and Congress of
Industrial Organizations, the AFL-CIO. John lays out his priorities,
the priorities of his organization when it comes to a stimulus package,
a short-term stimulus.
There being no objection, the material was ordered to be printed in
the Record, as follows:
American Federation of Labor and Congress of Industrial
Organizations,
Washington, DC, January 18, 2008.
Hon. Nancy Pelosi,
Speaker of the House of Representatives, Washington, DC.
Hon. Harry Reid,
Senate Majority Leader, Washington, DC.
Dear Speaker Pelosi and Majority Leader Reid: As Congress
considers legislative responses to current and anticipated
weakness in the U.S. economy, the AFL-CIO urges you (1) to
include in a short-term stimulus package measures that will
have the most impact on the economy and get the ``biggest
bang for the buck'': and (2) to address the underlying causes
of current economic weakness.
Short-Term Stimulus
It is encouraging that President Bush has recognized the
immediate need for an economic stimulus package. Judging from
initial reports, however, it appears that President Bush's
proposals are too heavily weighted towards tax cuts over
much-needed spending, do not address crucial problems facing
working families, and do not target tax benefits to those
families who need them most and will spend them fastest.
In particular, we are concerned that the President's income
tax cut proposal would not be sufficiently stimulative
because it fails to target lower-income and middle-income
households who, as the Congressional Budget Office (CBO)
wrote last week, are likely to spend a larger share of any
tax benefit they receive. We are also concerned that the
President's proposal to cut business taxes would not be
sufficiently timely and, because of the linkages between
federal and state tax codes, could trigger economically
depressing budget cuts and tax increases by state
governments.
While we understand that compromise will be necessary to
enact a stimulus package within the next month, we urge you
to insist on legislative measures that will have the greatest
stimulative impact on the economy and would not lead to
economically depressing budget cuts and tax increases at the
state and local level.
(1) Extension of unemployment benefits. The Congressional
Budget Office (CBO) and Mark Zandi of Moody's Economy.com
rank unemployment benefits at the top of the list of possible
stimulus choices, increasing economic demand by $1.73 to
$2.15 for each dollar spent. We urge you to enact a one-year
federal unemployment compensation program that provides 20
weeks of extended unemployment benefits in all states; 13
additional weeks in ``high unemployment'' states with an
unemployment rate of 6.0% or more; a $50 per week benefit
increase; and additional administrative funding. We also urge
Congress to provide federal financing for states to expand
eligibility to lower-income workers, part-time workers, and
workers who leave their jobs for compelling family reasons.
(2) Increase in food stamp benefits. Many food stamp
recipients are not tax filers and do not receive unemployment
benefits, so they would not benefit from a tax rebate or
unemployment benefit extension. An increase in food stamp
benefits would be one of the most effective forms of economic
stimulus, since it would almost certainly be spent in its
entirety very quickly, boosting demand for goods and services
in the short term.
(3) Tax rebate targeted towards middle-income and lower
income taxpayers. The individual income tax rebates proposed
by President Bush should be retargeted towards middle-income
and lower-income taxpayers, who are most likely to spend the
money and thereby stimulate economic activity, by making them
available to taxpayers who pay payroll taxes but not income
taxes. According to Mark Zandi, a one-time uniform tax rebate
would increase demand by $1.19 for every dollar spent.
(4) Fiscal relief for state and local governments to avoid
the economically depressing effect of tax increases and
budget cuts. State and local governments are experiencing
lower property and sales tax revenues, due to the slumping
housing market and slowing economic activity. Tax collections
are down in 24 states, and at least 20 states are expected to
have budget deficits this year. Since many states have
balanced budget requirements, a decrease in revenues can lead
to budget cuts or tax increases, both of which intensify the
impact of an economic downturn. Congress should provide at
least $30 billion in aid to the states in the form of
revenue-sharing grants and increases in the Medicaid match.
According to Mark Zandi, state fiscal relief would increase
demand by $1.24 for every dollar spent.
(5) Acceleration of ready-to-go construction projects.
Putting Americans to work directly in construction and repair
projects is an obvious response to rising unemployment, and
would directly create additional demand. Unlike tax rebates,
all of this investment would be spent to increase domestic
economic activity, none would be spent on imports, and none
would be saved.
Furthermore, we believe public investment in infrastructure
can be targeted and timely. For example, there is a backlog
of at least $100 billion in needed repairs to U.S. schools.
There are 6,000 bridges that have been declared unsafe, and
many of these projects are ready for work to begin
immediately.
We urge Congress to provide $40 billion for public
investment in infrastructure, including school, bridge, and
sewage treatment repair.
addressing the longer-term causes of economic weakness
We are hopeful that Congress and President Bush can enact a
short-term stimulus within the next month. However, given the
nature of legislative compromise, any stimulus package
enacted within that time frame is likely to be only a down
payment on what is necessary to address this country's
economic problems-even in the short term. Congress may even
need to consider a second stimulus package later in the year.
Congress must also begin focusing today on the most
fundamental underlying causes of our current economic
weakness. While it is appropriate for Congress to focus on
measures that have an immediate economic impact as it crafts
a short-term stimulus package, this is no excuse to put our
heads in the sand and do nothing about the underlying longer-
term problems afflicting our economy.
One of the underlying causes of our current economic
weakness is the stagnation of ordinary Americans' incomes.
This will probably be the first business cycle in which the
typical family will have lower incomes at the end of the
recovery than they did at the beginning of the last
recession. Wage stagnation, which began in the 1970s, has led
to longer working hours, higher consumer debt, and increasing
reliance on home equities. But today home values are
plummeting, home foreclosures are on the rise, consumer debt
is reaching unsustainable levels, and prices for energy,
health care, and education are soaring out of reach for many
working families.
There are various long-term solutions to the underlying
problem of wage stagnation, They include fixing our broken
labor laws so that workers who want to form a union can
bargain with their employers for better wages and benefits;
ensuring affordable health care and retirement security;
fixing our flawed trade policies; and reactivating the
historically successful fiscal and monetary policies that
place a higher priority on full employment. Near-term energy
investments in the greening of our energy base would also
offer both environmental and economic payoffs in the form of
good jobs and improved competitiveness.
Another underlying cause of our current economic weakness
is deregulation of the financial sector. The absence of
transparency and effective regulation of the mortgage and
financial services industries cries out for urgent attention.
Speaker Pelosi and Majority Leader Reid: though we have
framed this discussion in the rather dry and impersonal
language of stimulus and macroeconomic impacts, there is a
human dimension to this story we can never lose sight of.
Many, many working families all over this country are barely
hanging on and are deeply worried that the steep economic
downdraft will pull them off their perilous perch. The real
test for any economic proposal considered by Congress in the
coming weeks and months should be: what does it mean for
them?
Thank you in advance for your consideration of our
concerns.
Sincerely,
John J. Sweeney,
President.
Mr. DURBIN. If Members look at the list of things John Sweeney has
highlighted, he understands what I have just described: the rules of
economics, the fact that a lot of working families have not been part
of the grand bargain in Washington for a long time. John Sweeney says:
Let's extend unemployment benefits. That certainly is something on
which money is well spent.
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Every dollar you put into unemployment benefits increases economic
activity by $1.73, up to $2.15. It is a terrific boost to the economy,
plus it goes to the people who need it the most, the ones who are out
of work.
Mr. Sweeney also calls for an increase in food stamp benefits. Many
of these people are not tax filers and don't receive unemployment
benefits, so they would benefit. They are struggling with their jobs,
trying to get by, and many of them still qualify for food stamps.
He also talks about a tax rebate targeted toward middle and lower
income taxpayers. He talks about acceleration of construction projects.
That is money well spent too. It isn't just the Tax Code we should be
looking at. There are other ways to move the economy and do the right
thing for America.
One of the things Mr. Sweeney notes in his letter is that there is a
backlog of $100 billion in needed repairs to American schools. He also
says there are 6,000 bridges that have been declared unsafe. The
Presiding Officer certainly knows that issue well, as chair of the
Transportation Appropriations Subcommittee. There is a lot we can do to
improve the economy of America by improving the infrastructure. I don't
have to remind people what happened in Minnesota not long ago when a
bridge failed. People died. It is an indication to all of us that we
have to be aware of that need.
This letter I commend to all colleagues because it is a good starting
point when we discuss what we can do to this economy to make a
difference, a real stimulus package.
This package should be funded at appropriate levels to have an impact
on our gross domestic product. The money should go by way of help to
taxpayers and their families who truly are struggling. I just have to
tell you, if you are making a quarter million a year, the notion that
the Federal Government is going to send a rebate check to Members of
Congress and people who make dramatically more money--wait a minute;
what is this all about? Doesn't it make more sense for us to focus on
those folks who are struggling who will spend it, who will energize the
economy, than maybe giving enough money for families so that they can
put a little extra coat of varnish on their yacht? Is that really an
economic stimulus? I don't think so.
I hope we will be able to help those businesses that will create
good-paying jobs in America. That is critically important. I hope we
will do this in a way mindful of the need for unemployment insurance
and food stamps for those who are truly at the bottom and trying to
move on with their lives and make a new life for their families.
The Center on Budget and Policy Priorities issued a statement and
said that the stimulus plan that some have suggested may fail a test of
being effective if it doesn't help families making under $40,000 a
year. Keep in mind that if you are being paid the minimum wage in
America, you are making a little over $20,000 a year. So even people
making twice the minimum wage and more would receive no help from some
of proposals made already. We don't need to bypass 45 percent of
households, 65 million of them with modest incomes. If a family of four
has an income below $41,000 a year, under some of the proposals being
discussed, they receive no help at all. We have to make sure they are
included. We have to make certain the economic stimulus package really
reaches those who have been left behind by the tax cuts for wealthy
people that have been in vogue for so long in Washington.
These families are the strength of our country. These are the people
who get up every morning and go to work, raise the kids, and make the
neighborhoods and towns that make America strong. It is time for us to
try to come together on a bipartisan basis, get an economy moving
forward which helps all of us by making certain we don't leave behind
those families at the end of the economic ladder who have been ignored
for so long.
During the course of this break, I visited with a lot of families. It
is hard to imagine sometimes, for those of us who are lucky enough to
make a good living and have good health insurance, what these poor
families put up with in trying every single month to keep it together.
It is a lot of stress and strain. There is no stimulus package we will
pass that will wave a magic wand and make their lives miraculously
better. But woe to us if we pass a stimulus package which ignores the
reality of economic sacrifice and struggle in America. Woe to us if we
pass a stimulus package which ends up putting money in the hands of
those who, frankly, don't need it as much as others. And woe to us if,
at the end of the day, we stay hidebound to some old theories that have
not worked and find our Nation sliding into a recession where we will
all suffer.
I yield the floor.
The PRESIDING OFFICER (Mrs. Murray). The Senator from Montana.
Mr. BAUCUS. Madam President, is the Senate in morning business?
The PRESIDING OFFICER. The Senator is correct.
Mr. BAUCUS. I rise to speak for less than 10 minutes.
The PRESIDING OFFICER. The Senator from Montana has 12\1/2\ minutes
remaining on the Democratic side.
Mr. BAUCUS. I thank the Chair.
I would like to make two points. First, the Finance Committee held a
hearing this morning--in fact, it is going on right now--on an economic
stimulus package, pressing the Director of the Congressional Budget
Office, Peter Orszag, on various options that will stimulate the
economy the most and what options will help people who need their money
the most. That is not just all Americans who pay income taxes but
people who don't pay income taxes, people who don't pay payroll taxes
but file because they think, as good Americans, they should--they have
no income tax liability and no payroll tax liability--and also some
senior citizens who file income tax returns but who do not have any
significant income tax liability. The fact is, if the rebate alone were
to be given to anybody who files an income tax return, which was not
the case with the 2001 rebate program--that applied only to people who
paid income taxes--if a rebate were to apply to all filers irrespective
of whether they paid income tax, that would reach 90-plus percent of
all Americans. Add to that extending unemployment insurance benefits
and food stamp benefits, I think that package would really help people
who need it the most.
There are various ways to put this together. I even suggested as a
possibility, so as not to spend more than we should on a total package,
that whereas the President is suggesting an $800 rebate for individual
filers and a $1,600 rebate for couples, that could be significantly cut
down, but give a bonus to households that have children so that a
couple with two or three children would get an additional, say, $400
bonus per child in addition to the, say, $400 or $500 payment an
individual would get or, say, an $800 check that a couple would get.
My point is, the Finance Committee is exploring different ways to
make sure we do what is best. Of course, it will depend on some
negotiation with the White House and both Houses of Congress. But I
want to make the point clearly that we in the Finance Committee are
doing our level best to try to find what works best, to get the
greatest bang for the buck, with a view toward getting a stimulus
package passed quickly, not loading it up with measures that are going
to bog it down and prevent passage.
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