[Congressional Record Volume 154, Number 11 (Thursday, January 24, 2008)]
[Senate]
[Pages S271-S274]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              THE STIMULUS

  Mr. HARKIN. Mr. President, I wish to take the floor for a few minutes 
before we adjourn today to talk about the economy and about this 
stimulus package we are hearing the House is developing and will send 
over here some time in the next few weeks.
  I must say, first, it is clear that there is a downturn in the 
economy that is causing a lot of anxiety among all Americans. It is 
clear we need to do something. Over the last 6 years, I must admit, I 
have been disturbed by the lack of fiscal discipline by this White 
House and by this Congress, as the deficits have piled up.
  Think about this: In 2001, when President Clinton left office, we had 
surpluses. We were going to have surpluses as far as the eye could see. 
We were talking about paying down the national debt, saving our Social 
Security system. That all changed. It all changed because the new 
President came in and said: What is more important than paying down the 
debt, paying our bills, putting us on a sound fiscal basis? What is 
more important than that is tax cuts for the wealthiest people in our 
country. Oh, sure, everybody got a little bit, but a lion's share of it 
went to the wealthiest in our country.
  I guess I shouldn't have been too surprised. The President's 
philosophy has always been one of trickle down, trickle-down economics. 
How many times do we have to keep enduring trickle-down economics when 
time after time we know it does not work? It may give you a little bit 
of a good feeling for awhile, but it always leads to disastrous 
consequences.
  So that is what we had in 2001. We had trickle down, give the most to 
the wealthiest in the country; it will trickle down to everybody. It 
didn't trickle down. What it did was widen the gap between the rich and 
the poor. The very highest income earners in our country have gotten 
wealthy beyond Midas' imagination and the rest are down here, and the 
poor have gotten poorer and they have gotten to be a bigger part of our 
population. Children in poverty have gone up since 2001.
  I suppose it was a nice dinner party for those who were at the top of 
the ladder for the last 5, 6 years, a wonderful ride, but look what it 
has led to. Now we have these huge deficits. The debt has piled up. We 
are now stuck in a war in Iraq that is costing us $10 billion to $12 
billion a month, with no end in sight. Still we have these big tax cuts 
for the very wealthy going on and on.
  Again, here we are. And, now we have a downturn. What do we do? We 
have to do something. There are times when deficit spending in the 
short term is prudent and necessary. That is when there is an economic 
downturn. But during the times when the economy is sound, that is when 
you ought to be paying down your debts. When the economy was sound for 
the last few years, we gave it all away. We gave it away, again, mostly 
to the wealthiest in our country. Now we are in a situation in which we 
want to ward off a deep recession.
  Recessions always hurt those at the bottom worst. And now we are 
going to have to, because we don't have any money, do it with deficit 
spending, which I don't like, but we are going to have to do it.
  I think it behooves us if, in fact, we are going to have to ask our 
grandkids and great-grandkids to pay the bill--that is what the 
national debt is; they have to pay it--if we are going to borrow from 
them for right now to get us through a recession, then we ought to be 
prudent about what we do with that money and how we do it.
  I guess from my standpoint, taking a bunch of money and throwing it 
out there is not the way to do it. Don't throw money at the problem. 
That is why I have very serious reservations about what I hear coming 
from the other body. We haven't seen anything. All I know is what I 
read in the paper and see on the news and what I hear about what the 
White House is doing.
  I have no doubt the House is acting in good faith. I am all for a 
bipartisan solution. But I remind both the President and my colleagues 
that we in the Senate are going to have some say-so in shaping the 
final stimulus package. Any bill that comes from the House is

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going to be fully amendable here, and I intend to be here with a number 
of my colleagues to amend it if what I hear is coming from the House, 
and that is mainly a rebate. I don't know what the parameters are of 
the rebate. That is to be decided yet. But I hear the rebate can go to 
couples making $150,000 a year. I guess when you figure out what the 
average income of Americans is, that is pretty high.
  Everybody likes free money. Hey, come on, everybody likes to have the 
Government send them a check. Why not? I repeat, if we are going to 
borrow money from our grandkids and great-grandkids, let's be prudent 
about it. Let's put the money where it is most effective and where it 
is most needed, and that is not some kind of a general rebate for 
people.
  We have unemployment rising, house prices are falling, and the home 
construction industry is in a severe slump. That affects everything, 
not just the house that is going to be built or is not being built. 
That is the window manufacturers, the tubing, the piping, the plumbing, 
the heating and air conditioning, and everything else down the line.
  That is a real factor, something about which we should be concerned. 
Furniture makers, appliance makers, so many are also affected. Millions 
of Americans face the prospect of foreclosure, losing their homes. 
Banks are tightening their lending requirements. New credit is drying 
up. Even as the Fed reduces their interest rates, banks are tightening 
up the requirements. And who always gets hit the hardest? You got it, 
low-income people.

  Prices are rising. I need not tell everybody about the rising price 
of fuel. But I also have to tell you that in many cities in this 
country, the price of a gallon of milk is higher than a gallon of 
gasoline. I read where somebody said once a price of gasoline may not 
affect a lot of low-income people because they ride mass transit and 
they don't have a car. They eat. And when the price of a gallon of milk 
is higher than a price of a gallon of gasoline, you don't have much 
choice.
  If a gallon of gasoline is high and you don't like it, I supposed you 
can ride mass transit, ride a bicycle, or walk. If you are hungry, you 
have to have food. I don't know any substitute yet for food.
  We need a stimulus package, but we have to get it right, targeted to 
those who have been hit the hardest and invest in the growth in the 
U.S. economy. Don't think about this as a one-time thing, if we spend a 
lot of money now that will get us through it. If you have someone who 
makes $150,000 a couple or $75,000 for, let's say, a single person, you 
give them 600 or 700 bucks, what they are talking about, I think 
studies have shown a big portion of that will be saved. There is 
nothing wrong with that. That is fine. I am all for saving. People 
ought to save more. But another portion of that will be used to pay 
past bills, and another portion of that, guess what, is going to be 
used to buy things. One might say: That is the deal, we want people to 
buy things; that is the idea of a stimulus. Yes, but what are they 
going to buy? Are they going to buy a new flat-screen TV made in China? 
Are they going to buy a new electronic game made overseas? So many of 
those items are made in foreign countries, so a lot of money will flow 
from here right to China, Japan, Korea, or who knows where else.
  You can buy clothes. Most of our clothes are made overseas. You can 
buy a pair of shoes. We don't make many shoes here anymore. I am saying 
you have to think about who is getting helped and where is the money 
going, and is it going to help build the structure of America and make 
for our economy to be sound.
  On that score, the proposal I see from the House does not quite do 
it. There are three big items, as I understand, that they leave out. 
The first is food stamps. I was in my office today listening and I 
heard some speakers on the floor talk about all we need in a stimulus 
package. Some of them never even mentioned food stamps, and yet these 
are the people hit the hardest by a recession. We know the multiplier 
effect of food stamps is better than any other single program in which 
we can invest. Here is a chart that indicates that. This is prepared by 
Moody's Economy. It is not a Government source. Here are the proposals 
that deliver the demand generated by $1 of stimulus. For $1 of 
stimulus, what do you get back? For business investment writeoffs, if 
you invest $1, you get 27 cents; extend the Bush tax cuts, you get 29 
cents. Who is going to invest a dollar to get back 29 cents, I ask you. 
Then income tax cuts, payroll tax rebates, aid to States, unemployment, 
food stamps, a $1.73 multiplier effect for every dollar you put 
in. These are the people hit the hardest. We know food prices are 
extremely high. A gallon of milk is more than a gallon of gasoline. 
There is no substitute for food.

  It seems to me that if we are going to invest in a stimulus package, 
this is a key place where we ought to be investing our money. Not only 
does it help the poorest in our Nation, to give them the food they 
need, but think about it in another way. When you give someone food 
stamps, they can't spend it on a flat-screen TV made in China, they 
can't spend it on a new electronic game or an iPod; it has to be food. 
For the most part, most of that food is grown in the United States, it 
is processed in the United States, it is packaged in the United States, 
it is shipped in the United States, and it is sold in stores in the 
United States. And, they will spend it all. That is why the multiplier 
effect is so big.
  Now, from what I hear, the House proposal has zero in it--zero--for 
food stamps. Well, that has to be taken care of. And when that bill 
comes, if it doesn't have it in here when it comes here, I, along with 
others--and I see my colleague from Ohio, who I know is going to be 
stalwart on that too--we are going to demand that any stimulus package 
have food stamps. Food stamps. And why shouldn't it? That is the 
biggest bang for the buck right there.
  Now, again, everybody likes rebates and stuff. Maybe I am a little 
more conservative on this issue than others and I see it in those 
terms, that we have to be very careful about how we are spending 
deficit money. Put it here and it gets spent and it will go for 
everything made in the United States. You get a big multiplier effect 
on that. And it has to be a distinct change.
  Here is what I would propose that we do on food stamps. First of all, 
raise the asset level for which you qualify for food stamps. Right now, 
it is $2,000. Let me make it very clear what I mean by that. Let's say 
that you are a single parent, you are working at a low-income job, and 
you temporarily get unemployed, which is what is happening now because 
unemployment goes up in a recession, and you find it necessary to get 
food stamps for your children. If you have $2,000 that you have salted 
away in a savings account, in a 401(k), no matter what, if you have 
$2,000 salted away, you don't get food stamps.
  Now, that level was set in 1977--in 1977. What if that had just kept 
pace with inflation through all these years? What if we had the same 
asset level exclusion today in real dollar terms as we had in 1977? 
What would it be? I will tell you right now. It would be about $6,000. 
So what we are saying to food stamp recipients today is: You are worse 
off, you are worse off than a food stamp recipient was in 1977. So the 
first thing we have to do is raise the asset level for which you 
qualify for food stamps, and we ought to raise it up to what the level 
would be had it kept pace with inflation, and that is roughly in the 
neighborhood of about $6,000. Imagine that, $6,000.
  We want poor people to save. One of the reasons people get stuck in 
poverty is they do not save any money. Yet we tell them: If you save 
and you hit a rough patch and you get unemployed, guess what, no food 
stamps. You have to spend your savings. What kind of message does that 
send? So that is No. 1.
  Number 2, we ought to take off the childcare cap. Take it off. Now, I 
will admit that the Bush administration, in their farm bill proposal 
they sent down, also asked that we take off the cap. So there shouldn't 
be any argument there. So if you have to have childcare, whatever you 
spend for childcare is not taken into account. You get to deduct all 
that. You get to deduct whatever the cost of childcare is from your 
income. Right now, it is capped at $175 per month. That is not enough 
and it is very hard to work with young children with no one at home to 
take care of them without

[[Page S273]]

child care. So we shouldn't have the argument from the administration 
since they proposed that too.
  The third thing is to exempt from your savings, from your income, 
anything that you put into an education account or into a 401(k). That 
ought to be exempt. The administration proposed that, also, so we 
shouldn't have any problem there.
  The fourth thing we need to do is to raise the standard deduction. 
Now, the standard deduction is a deduction that applies to a family who 
depends basically on income and depends on how many kids you have. That 
standard deduction was set in 1996--welfare reform. Guess what. It 
hasn't changed since then. So the standard deduction needs to be raised 
to keep pace with inflation, and it needs to be indexed. We need to 
index both the asset level and the standard deduction so that in the 
future we don't have this problem anymore.
  We should do those four things.
  Now, the fifth thing we ought to do is to recognize that many people 
who get food stamps don't get enough food stamps. During an economic 
downturn, a lot of people rely upon our food banks to get food for the 
rest of the month. You can go to any food bank in your cities, 
anywhere, and they will tell you that the third and fourth weeks of the 
month is when they get hit the hardest because people run out of food 
and come in there to supplement their food. But our food banks are in 
dire need of more food. So I would suggest, modestly suggest, that we 
ought to put somewhere in the neighborhood of about $100 million in 
this stimulus package to go out--that is under the Emergency Food 
Assistance Program--to be able to get food to our food banks. Again, 
not only does this go to people who are on food stamps but also to 
homeless people, soup kitchens, and the things that really help the 
poorest people in our country. Yet this is nowhere in the stimulus 
package. Again, keep in mind this money would be spent for food 
produced in the United States, processed, packaged, and for people who 
work in a lot of our food banks and in our soup kitchens and places 
such as that.

  So, again, those are five things which need to be done on food 
stamps.
  The second thing we need to do is to extend unemployment benefits. 
Second only to food stamps, unemployment benefits give you the biggest 
return on every dollar--$1.64 for every dollar spent. After all, isn't 
that what we are talking about, people who have been on unemployment 
but their benefits have run out? They should be extended. I mean, 
common compassion would tell you they ought to be extended, but common 
sense should also tell you that too. In a stimulus package, we ought to 
extend our unemployment benefits for those who no longer have jobs. 
Yet, as I hear about and read about the House package, that is not 
there. That is not there.
  Now, the third thing we have to do is invest in the future structure 
of America so that we have some investments that will lead to a better 
economic footing for this country. As I said, and I will repeat myself 
for emphasis' sake, if we just give someone money and they spend it on 
a flat-screen TV made overseas, some of that helps here, but a lot of 
it doesn't. What is there that we can invest in that will put people to 
work right away, spend money in this country, and most of the money 
stays right here in America? What that means is infrastructure money. 
That is money that goes out for repairing our roads and bridges and 
sewer and water systems, school construction and weatherization.
  There was some talk that we need to put money in here for LIHEAP, the 
Low Income Home Energy Assistance Program. It is a vital program. It 
helps a lot of low-income elderly heat their homes during the winter 
and, in the South, cool their homes in the summer. We ought to be 
putting money into weatherization programs for insulation and things 
such as that for these homes as well to save for the long term and also 
to create jobs. It puts people to work.
  I actually did a workday once with a weatherization group, and when 
you think about it, you get this done, and then their heating bills for 
the next 5 to 10 years will be lower. That is what we need, to invest 
in the infrastructure of our country.
  Right now, I know that in the Department of Agriculture, we have over 
$1 billion backlogged right now for just sewer and water projects, just 
sewer and water programs. Many are ready to go with all of the plans 
that are there, designs all set, but they just don't have the money. 
Small towns and communities could benefit from this, and it would put a 
lot of people to work. School construction--so many of our schools have 
outdated heating systems that cost a lot of money every year. They may 
need to expand, or they may need new fire and safety materials. 
Sometimes they just need to build new schools. A lot of these are ready 
to go. Why not invest the money there? Roads and bridges, our 
interstate highways and bridge rehabilitation projects that are ready 
to go, courthouses that need to be built with the plans done but are 
waiting for funds. People could be at work on these by this summer. 
Some time government will be paying for these projects. Why not do the 
work this year when it will help a weak economy?
  I hope people don't get deluded into thinking that all we have to do 
is pass $150 billion, throw it out there in the next couple of months, 
and it is all over with. That is not going to happen. Better we do it 
carefully. If we can get this money out by this summer and put people 
to work, it would be one of the best things we could do.
  Again, keep in mind, when you give aid to the States for 
infrastructure--think about this--put a new roof or remodel the school 
or whatever--think about this--the work is all done here. You can't 
outsource that. So the work is done here, the people who work here are 
paid here, and they spend their money here.
  Secondly, most of the materials that go into construction are made in 
America--your lights, your heating, your wiring, your drywall, windows, 
doors, and rerods. When you think about it, it is almost all made in 
America. There may be some things made elsewhere, but probably 90 
percent of all the construction materials we use in this country are 
made in America. That is why this multiplier effect is so big. So not 
only do you employ people here, who spend their money here and help 
their families out, you are buying materials that are made somewhere 
else in America. That helps those jobs and helps those people go to 
work, whether it is making windows or doors or floors or faucets or 
piping or wiring or lightbulbs or whatever it might be.
  So that is why I say that what I hear about coming from the House I 
think really misses the point. It misses the point. Don't just throw 
money at the problem. Don't just throw money at it. And don't throw 
money at it in a way that people who make a lot more money than poor 
people get a bigger piece of the pie. Let's put it where it really has 
an effect--food stamps, unemployment benefits, and investment in needed 
infrastructure. If we just did those three things, that would do more 
to stop a recession in this country than anything we could do, and it 
would do more to build for the future--to build for the future--than 
anything else we could do.
  So I hope, Mr. President, we get a better package than what I am 
reading about. I hope when it comes over here that we will have it on 
the floor, it will be open, and we will be able to offer amendments, 
and I hope we can be heard on this and we can offer these amendments to 
try to focus this where it is really needed. To me, that is what a 
stimulus package ought to be about. No more trickle down. No more just 
throwing money out there.
  Everybody loves free money. What the heck, everybody loves free 
money. That is not the point. The point is, we are borrowing from our 
kids and grandkids. We ought to treat it carefully, be conservative 
about it, and we ought to do what will get the most bang for the buck 
and lead to a more sound economy in this country.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Ohio.
  Mr. BROWN. Mr. President, first of all, I thank the Senator from Iowa 
for his terrific work on advocating for those who are most victimized 
by this recession, the elderly who need help on their heating and 
weatherization of their homes, the people who need food stamps, people 
who have lost their jobs, people who have lost their health

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insurance, people who are struggling the most. I wish to thank Senator 
Harkin for his work.
  I wish to tell a story that I think illustrates the hardship among 
middle-class Americans, middle-class Ohioans, people who have worked 
hard, played by the rules, have seen their unemployment run out, or 
seen their job lost or seen the prices of gasoline and home heating and 
food go so high that they cannot afford the middle-class lifestyle or 
even the subsistence living that has afflicted their lives.
  I mentioned this story on the floor a couple times, but it so much 
illustrates Senator Harkin's words and Senator Harkin's solutions of 
extending unemployment, that gets money in people's pockets quickly; of 
helping with food banks and food stamps and LIHEAP and all that.
  Congress's response needs to be twofold. We need to stimulate the 
economy, and the House version is a start, it is a good start, and we 
need to help those who are most victimized by the recession.
  In Logan, OH, in Hocking County, a county halfway between Columbus in 
Central Ohio and Athens on the Ohio River, in Logan, OH, a southeast 
Appalachian county, on a cold December day about a month ago, at 3:30 
in the morning people began to line up outside the United Methodist in 
Logan, the county seat of Hocking County, to get food. It was 3:30 in 
the morning on a cold winter day. By 8 o'clock, cars were snaked around 
the church and the neighborhood and up and down the streets when the 
food panty opened. By 1 o'clock in the afternoon, 2,000 people--2,000 
people in a county of about 30,000--7 percent of the county, had come 
to this food pantry.
  Many of those in this county had driven 20, 25 or 30 minutes to get 
there, a county that has had problems in the past but a county where 
that food bank served only a few dozen people 3 or 4 or 5 years ago.
  Across the State, in Warren County, a relatively affluent community 
overall, a larger county northeast of Cincinnati down in southwest 
Ohio, the head of the United Way told me 90 percent of their people who 
come to their food pantries in their county, 90 percent of the people 
have jobs.
  The mayor of Denver told a group of us, the Presiding Officer was 
there, that 40 percent of the homeless people in greater Denver are 
employed. Underemployed, perhaps, employed obviously in low-wage jobs.
  Tim, a gentleman from Cleveland, used to donate time and money to the 
local food bank and soup kitchen. He is still employed, but the costs 
were consuming him and his family. He quit giving money to the food 
bank but continued to volunteer there. Now he is in a position where he 
relies on those resources himself. He said he used to be middle class, 
but he does not consider himself middle class any more because his 
wages have not kept pace with the cost of basic needs such as food, 
heat, and shelter.
  He spoke of the great humility it took to go to the food bank for his 
own household. He said it is merely a drop in the bucket compared to 
what his family needs.
  Today my office received an alarming e-mail from Ohio's Second 
Harvest. Second Harvest is a group of food banks that serve our State. 
The e-mail mail explained that Second Harvest Food Bank of Southeastern 
Ohio, which serves the area where Logan is, the community I mentioned 
earlier, is nearly out of food. For the fourth time in just over a 
year, the e-mail said, they have come very close to closing their 
doors; there is no relief in sight.
  This problem is not unique to Ohio, it is affecting cities all over 
this country. It is affecting rural areas, large cities, small towns, 
and suburbs. No community seems to be immune from this.
  That is why our efforts are so very important. Senator Harkin had a 
chart that showed the importance of putting money directly into the 
pockets of those who are most afflicted by this recession. That means 
people who go to food banks; it means people on food stamps; it means 
people who have problems paying their heating bill; it means people 
whose unemployment has run out.
  I appreciate the House action. As I said, the House has a good start, 
putting money into the pockets directly of middle-class taxpayers, of 
working families. But we need to do more. The best thing we can do 
while we want to stimulate the economy, the best thing we can do is 
extend unemployment compensation. Because that money will be spent by 
those people who are hurting because they lost their job, they cannot 
find work, and their unemployment has run out.
  Our proposal of $40 million that I introduced back in December may 
need to be more than that, but that would be a good start, to get 
people over December, January, February as these food banks have run 
out of food. That $40 million spread around the country will matter, as 
these food banks say they are in the worst shape than any time in the 
last 20 years. They are in worse shape because grocery stores donate 
less because they are more efficient, they damage fewer cans, they have 
less oversupply or waste that they donated to food banks in the past.
  Obviously, the demand on these food banks is so much greater than it 
has been. Again, I would also add that donations are down in January. 
They always are after Christmas. People, as generous as they are at 
Christmas, sometimes sort of forget in January, so they are not getting 
help from the individuals and the community. Of course, the demands on 
those food banks are higher.
  So that stimulus package, while a good start in the House, putting 
money in the pockets of middle-class Americans and working Americans, 
needs to go further and needing to go further is helping the most 
afflicted, pained, the people who need it most and have been victims of 
this recession.
  As Senator Harkin said, that money will then be spent in our 
communities with American-made products and will have a very good 
multiplying effect for jump-starting our economy.
  No one should go hungry in the richest country in the world. We are 
spending $3 billion a week on the war in Iraq. The tax cuts the 
President gave over the last 6 years resulted in huge numbers of 
dollars to the richest people, the richest 1 percent in this country. 
It is time we dealt with some of the problems that are hurting people 
in Steubenville and Lima and Zanesville and Dayton and Cleveland and 
Akron and Youngstown and Warren in my State.
  So I ask, as this bill comes to the Senate after House passage, that 
we look seriously at the proposal Senator Harkin had to take care of 
food stamps and food banks, to extend unemployment benefits, to take 
care of seniors who simply cannot meet their heating bills as the 
winter moves on.

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