[Congressional Record Volume 154, Number 11 (Thursday, January 24, 2008)]
[Senate]
[Pages S274-S275]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              THE ECONOMY

  Mr. SCHUMER. Mr. President, I rise to speak on the stimulus package 
and the progress we are making, and the further progress we must make.
  As is being reported, this morning the House is very close--probably 
already there--on a bipartisan stimulus package. This in itself is good 
news. Our economy is in poor shape. It is not simply the housing 
markets--where this started--but it is also now consumer spending. As 
housing prices go down, because of the subprime crisis, consumers spend 
less, and it also creates a credit freeze. Now we are finding credit 
problems not only in subprime loans and subprime securities but also 
with the insurers, the insurance, the mortgage and other insurers, 
which makes the markets wonder: Are there credit problems elsewhere, 
which is the most frightening issue we might have.
  With all of this happening, Chairman Bernanke's swift action made a 
good deal of sense. But it must be matched by swift action by the 
executive branch of Government and the legislative branch of Government 
in putting together a stimulus package. I think the package--I have 
always said, and I think most Democrats and Republicans would agree--
the centerpiece ought to be a tax cut, a tax refund check sent to the 
middle class.
  It is the middle class that needs the help. It is the middle class 
that would spend it the most quickly. It makes a great deal of sense. 
It also makes sense to send it to those who are the working poor--not 
quite middle class--for the same reasons, even if they do not pay an 
income tax. It also makes sense to send those checks to people on 
Social Security who would file a tax return but might not pay even a 
payroll tax.

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  The bill the House has done in terms of the centerpiece is very good 
progress. It has taken the tax rebate checks and aimed them right at 
the middle class, where it should be, whereas the President's proposal 
aimed them significantly higher. In the President's initial proposal, 
someone making $300,000 or $400,000 a year would get the full rebate, 
and families earning between $30,000 or $40,000 would get less than the 
full amount, or nothing at all. So that is great progress.
  I salute the House and Speaker Pelosi and Secretary Paulson and 
Minority Leader Boehner for their progress. But the package is not 
complete. While it is a very good first step, we need to move a little 
further. One of the things many of us on this side have always felt is 
that spending stimuli are necessary. Most importantly--for efficiency 
reasons, to get the economy moving--the rebate tax checks will not get 
into people's hands until May, at the earliest, maybe June, or maybe 
even July. Some say they will spend the money in anticipation of those 
checks but not very many. Rebate tax checks, while they do have a very 
significant effect on boosting the economy, do not come close to being 
as efficient as unemployment insurance and lengthening the time, and 
maybe changing and expanding the benefit temporarily.
  CBO--nonpartisan--estimates for every $1 you spend on unemployment 
insurance, you get a $1.64 boost to the economy. That is great. That is 
phenomenal. For every $1 you spend on a tax refund--it is still very 
good, and still should be done--it is only $1.26.
  We have always felt, again, that there ought to be two bookends, one 
on each side of the centerpiece on tax spending refunds. One should be 
business tax cuts. They should be aimed to be speedy and quick, but 
they should be balanced off by some spending stimuli.
  The House bill does not have spending stimuli, and it is something I 
believe many of my colleagues--certainly myself--are going to try very 
hard to add to the package. Those spending stimuli should focus on 
employment insurance but could be for other things: money for summer 
jobs; money, if it can be spent quickly, for infrastructure; money for 
nutrition assistance, things such as that. I think that will add more 
balance to the package, but it will also make it more effective as a 
tool to stimulate the economy.
  The second change I think we need is a focus on the housing prices. I 
salute my colleagues in the House--Speaker Pelosi, Congressman Frank--
because they worked hard to add some things we have been talking about 
for a long time to deal with the housing crisis, the conforming loan 
limit, and FHA reform. Those are very good and important because, after 
all, if the housing crisis is at the center of our problems, to ignore 
it, to work around it, is not doing everything we can to help eliminate 
or at least reduce the severity of a recession.
  There are some other issues we should consider looking at as we move 
the bill in the Senate. Most importantly, dollars--some spending; it 
will not be very much, actually, but some spending for counseling, 
foreclosure avoidance counseling, which could prevent tens of 
thousands, hundreds of thousands of homes from being foreclosed on 
unnecessarily. There are many people in these homes who do have the 
ability to refinance given their income, given their FICO scores, but 
there is no one there to help them do it because the banks are no 
longer on the scene. These counselors would work. Secretary Paulson has 
told me the administration has no problem with this kind of proposal.
  We did put $180 million in the last omnibus budget bill. Senator 
Casey, Senator Brown, myself, with Senator Murray's great help, 
spearheaded the charge on that. But we should do more. We should look 
at other housing additions as well. Again, they will have to be broadly 
supported, bipartisan, and not hold up the package.
  Finally, the third aspect we should talk about is we do need a second 
stimulus package to look at the long-range problems. We have many 
different structural problems in the economy now. A long-range package 
that would focus more on infrastructure, on trade adjustment 
assistance, on reforming unemployment insurance, and many other things, 
is very much needed. On the business side, too, tax credits for energy, 
for instance, for clean energy and green energy, are something we 
should seriously consider.
  The third point I would make--and this is not at all a criticism of 
the House because we always intended there be a first package that is 
quick, gets into the economy quickly, does not create controversy--we 
need a second package aimed at the longer term.
  In conclusion, this is a very good start. Again, I particularly 
salute Speaker Pelosi and the House Democratic leadership for so 
improving the President's proposal on the tax refund. I also salute 
Minority Leader Boehner and his Republican colleagues for working so 
closely with the Democratic leadership on this issue.
  But we do need more. We need some spending stimuli. We need more done 
to deal with the housing crisis, which is at the center of these 
economic troubled times. And we do need a long-range package that aims 
at the structural problems in the economy. If we can do that, and add 
on to the great start that has been made by the House, we will have 
done the right thing in a bipartisan way to move this country forward 
and avoid a recession--unlikely, but it may be possible; let's hope and 
pray--certainly a deep and long recession that would hurt so many 
people and families.

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