[Congressional Record Volume 154, Number 12 (Friday, January 25, 2008)]
[Senate]
[Pages S324-S326]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
RECESSION
Mr. CASEY. Madam President, I commend our colleague from North Dakota
for highlighting some of the challenges we face economically. He did it
in a very compelling way, as he always does. We are grateful for his
leadership on these issues.
I stood before the Senate a couple of days ago and talked about the
fact that we have a war in Iraq that we cannot forget about. In fact,
if you listen to some of the news, you would think there are only one
or two issues we have to worry about, but the war continues to be a
central issue for the American people. We also have to be very
concerned, as Senator Dorgan and others have reminded us, about the
economy.
I was asked recently by a reporter--a couple of different reporters,
actually--who said to me very simply--or asked me, I should say, very
simply the question: Are we in recession? I answered them without
blinking, without even stopping to think, because I know it is the
truth, and the answer is yes, we are in a recession. I don't care
about, nor do I need to wait, for some academic dissertation or some
economist to tell us what is the textbook definition of a recession. We
are in a recession. We have to do something about it. I think it is as
plain as could be.
So what do we do about this recession? How do we respond to it? Thank
goodness, there is a lot of bipartisanship on this issue, both parties
coming together to try to do something about it. But I think we have to
describe for people in Washington what this means for real people. I
will talk about it in the context of Pennsylvania and Pennsylvania
families, by way of highlighting this issue. I ask unanimous consent to
have printed in the Record two pages I am going to be referring to from
the Joint Economic Committee, Pennsylvania Economic Snapshot, dated
January 23, 2008.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Over the past seven years, the Bush economy has made it
more difficult for most Americans to get ahead. Under the
current Administration, the basic goals of the American
dream--raising a family, owning a home, paying for college,
saving for retirement--have become intimidating hurdles for
hardworking people. Slow growth in families' wages has been
compounded by double-digit cost increases for health care,
energy, and college tuition. Democrats are fighting for a new
direction in economic policy, aimed at restoring broad-based
growth, reducing the high costs of health care and energy,
improving retirement security, and increasing prosperity for
all Americans.
Real Household Income Has Stagnated; Job Creation Has Been Abysmal
Pennsylvania's Median Household Income Increased By Only
1.3 Percent Since 2000. In Pennsylvania, real median
household income averaged $48,148 over the 2005-2006 period,
compared with $47,524 over the 1999-2000 period. Despite
strong gains in productivity, workers' wages are only
marginally higher than they were 25 years ago, and
nationally, the inflation-adjusted income of a typical
American household fell by $962, or 2.0 percent, to $48,201
between 2000 and 2006.
Pennsylvania's Job Growth Under the Current Administration
Lags Far Behind Previous Presidents. The current president is
competing with his father for the worst job creation record
of any president since Herbert Hoover. Since taking office in
January 2001, only 6 million jobs have been created, as
compared with 20.8 million new jobs created during the
Clinton administration at the same point in time. In
Pennsylvania, only 101,900 new jobs have been created since
Bush took office--or 1,200 new jobs per month--as compared
with a total of 528,900 new jobs under Clinton--or 6,400 per
month. In particular, the manufacturing sector has been hit
hard by the economy under the current Administration, with
payrolls nationwide declining by 3.2 million jobs between
January 2001 and December 2007, and by 202,000 in
Pennsylvania over the same period.
Families Are Feeling the Squeeze of Rising Expenses
Rising Energy Costs Lead to Higher Gas and Home Heating
Prices for Pennsylvania Residents. Rising energy costs are
making it more difficult for Pennsylvania families to stretch
their household budgets. In January 2001, the average retail
price per gallon of gasoline in Pennsylvania was $1.43. The
average gas price per gallon is $3.15 as of January 18, 2008.
When adjusted for inflation, this represents an increase of
86 percent. At the same time, this winter is expected to hit
Pennsylvania families hard, as average home heating costs
have risen by 18.9 percent per household from $1,216 to
$1,447 in the past year.
Health Care Premiums Rose 45.8 Percent in Pennsylvania
Since 2000. In 2005, the average
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inflation-adjusted health care premium for family coverage in
Pennsylvania was $11,470, a 45.8 percent increase from 2000,
while the average premium for individual coverage was $4,332,
an increase of 50.0 percent since 2000. Nationwide, the
inflation-adjusted average monthly premium for family health
coverage in the United States rose by 39.7 percent from 2000
to 2005, even as real median household income declined by 2.7
percent over the same period.
Pennsylvania College Tuition Rose 32.5 Percent Since 1999.
Pennsylvania parents of college age students have also been
hard hit under the current Administration, as inflation-
adjusted tuition for Pennsylvania's four-year public colleges
increased 32.5 percent between the 1999-2000 and 2005-2006
school years to $8,994 per year. With that $2,208 increase
over just six years, Pennsylvania families are finding it
more and more difficult to afford to send their children
to college, and they are not alone. Nationally, public
college tuition has risen at more than double the rate of
inflation in recent years. Between the 1999-2000 and 2005-
2006 academic years, average inflation-adjusted tuition
and fees at U.S. public colleges and universities
increased by 36.3 percent.
Child Care Costs For Two-Child Families Averaged $1,273 Per
Month in Pennsylvania. Child care continues to be a hefty
burden on the budgets of Pennsylvania parents, with
inflation-adjusted monthly care for an infant averaging $689,
and monthly care for two children averaging $1,273.
The Housing Crisis Is Eroding Home Wealth, Hurting the Broader Economy
The Subprime Mortgage Crisis Is Impacting All Pennsylvania
Homeowners. Under the Bush administration's watch,
unregulated mortgage originators were given financial
incentives to sell risky, unaffordable subprime mortgages to
vulnerable borrowers. As these adjustable rate mortgages
reset to higher rates, the number of families unable to
afford their payments and threatened with foreclosure is
skyrocketing. In Pennsylvania, mortgages in delinquency have
increased from 81,900 in the third quarter of 2005 to 121,100
in the third quarter of 2007. According to a recent report
published by the Joint Economic Committee (JEC), the number
of subprime foreclosures in Pennsylvania will total 45,500
between third quarter 2007 and the end of 2009.
High Foreclosure Rates Drag Down Neighboring Property
Values and Household Wealth. The mortgage foreclosure crisis
will have severe costs for Pennsylvania homeowners, not only
in direct costs, but in its effect on home values and
declining property taxes. According to the JEC, subprime
mortgage-related foreclosures will cost Pennsylvania $2.46
billion over the second half of 2007 through the end of 2009.
Nationally, the expected economic costs of forecast
foreclosures total nearly $104 billion. Moreover, these
numbers do not include the larger effects that the
foreclosure crisis may have on the economy. Home prices,
which drove up consumer spending when they rose earlier this
decade, are in decline now, and consumers may begin to draw
back on spending, negatively impacting GDP growth.
The Economic Cost of the Iraq War Is Staggering
The Iraq War Will Cost $36,900 Per Pennsylvania Household.
According to the JEC's recent report, the direct and indirect
costs of the Iraq War will be massive, especially if the Bush
administration continues to keep large numbers of troops
there. Even assuming significant force reductions, the cost
of the Iraq War will total $107 billion for Pennsylvania
taxpayers by 2017; the total cost to the country will be an
estimated $2.8 trillion.
Poverty Remains Persistently High
In Pennsylvania, 1.4 million Residents Were Living in
Poverty Over Last Two Years. In Pennsylvania, 1.4 million
residents were living below the poverty line during the 2005-
2006 period, an increase of 28.8 percent over the 1999-2000
period. Unfortunately, this problem is not confined to the
adult population as 17 percent of Pennsylvania's children are
living below the poverty line. Nationally, 12.3 percent of
Americans were living in poverty as of 2006.
The Ranks of the Uninsured Continue to Grow
Over Last Two Years, 1.2 million Pennsylvania Residents Had
No Health Insurance. A growing number of Pennsylvania
residents are living without health insurance. During the
2005-2006 period, an average of 1.2 million Pennsylvania
residents--9.9 percent of the state's population--had no
health insurance; this was 274,000 more than during the 1999-
2000 period. Furthermore, 7.4 percent of Pennsylvania's
children had no health insurance. Across the country, the
number of Americans without health insurance totals 47
million, up 8.6 million since the current Administration took
office.
Mr. CASEY. Madam President, I want you to know I will not read these
two pages, but I want to highlight a couple of data points in this
summary--two pages, four or five highlights.
First, delinquencies, mortgage delinquencies, are up from the third
quarter of 2005 to the third quarter of 2007, up by some 40,000
mortgages, just in Pennsylvania. Then, stretching back over a couple of
years, we look at gas prices. From January of 2001 forward, up 86
percent, gas prices in Pennsylvania; home heating costs, in 1 year--1
year--up 18.9 percent; health insurance for families. If you look at it
over a 5-year period, 2000 to 2005, health care premiums for families
are up 45.8 percent. And one more: Childcare costs per month for two
children, which is the case for a lot of families, childcare costs per
month for two children is averaging $1,273.
That is just in one State and a couple of highlights. We could go on
and on, but I won't.
There are the economic realities for Pennsylvania families, and we
could add more to that list. So when a reporter or anyone else asks me,
Are we in a recession, my answer is, You bet we are. A lot of families
in Pennsylvania and across the country think we have been in a
recession, or their families have been in a kind of recession for years
now--not just since the holidays, not just in the last year, but for
many years. So I think the data is compelling and overwhelming and
irrefutable.
But let's think about it even more broadly. In terms of health care,
Families USA did a report this past November--again, just in
Pennsylvania--and they have done it for a lot of States, but
Pennsylvania was the first one they announced. I will read one sentence
from a long report, one sentence from this report by Families USA on
the issue of health care. I think one sentence tells the story. During
this same period that they referred to earlier in the report, meaning
2000 to 2007, during that 7-year period:
The average worker's share of annual family premiums rose
from $1,656 to $3,281, an increase of more than 98 percent.
What they are saying in that one sentence is that in the State of
Pennsylvania, over that 7-year period of time, the workers' share of
annual family premiums went up 98 percent--98 percent in one State, the
workers' share on health care. I don't even need to refer to the rest
of the report. That tells the story.
So that is all the information. That is all the data. But what do we
do with it? We saw in the news today and yesterday that there has been
an agreement of sorts that has been brought about on the economy, and I
think we should all be encouraged by the fact that the President and
the Congress are working together on a stimulus package. But what does
that mean, and what are the elements of it? I won't go into all of it,
but I think one thing we have to be guided by--and we have heard over
and over again this sound bite in Washington, but we should say it
again. These are not my words. We have all quoted these, but they
summarize it pretty well: Whatever stimulus package we have in place
for the American people has to be timely, has to be temporary, and has
to be targeted. Another way to say that is we have to put in place
policies for the stimulus that we know will work.
I want to refer to a chart here that tells that story pretty well. We
have seen this chart before, but it bears repeating. Other Members of
the Senate have used it. The targeted stimulus proposals, the ones that
deliver far more bang for the buck. It is very simple: What do you get
for a buck in stimulus expenditure?
We know this from the data. This isn't some Democratic operative;
this is what Mark Zandi from economy.com put forth: food stamps, spend
a dollar and get $1.73 back; unemployment, spend a dollar in stimulus,
get $1.64 back. States are in a fiscal mess. We won't go into that, but
if you spend a dollar, you get $1.36 back in return. Then it goes down
from pay, with payroll tax rebates and temporary income tax. We know
that expending tax cuts for the wealthy, which is on the table right
now, doesn't work. We know what works.
We have to make sure, in my judgment, that if we put together a
bipartisan stimulus package--and we still have to work on this in the
Senate--that we invest in strategies that will work, not what we would
like to do or hope to do or not what one side or the other believes is
a good idea. We have to invest in strategies that work: Food stamps,
not just because it helps individual Americans and their families, but
we know by investing in that strategy, they will spend the money
quickly. We need people to spend money very rapidly to dig us out of
the hole we are in. Food stamps, unemployment benefits, and aid to the
States--we have to
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provide investments in strategies that will work.
Another thing we have to do is make sure that when we are dealing
with the housing crisis, we spend dollars and have strategies that lead
to help in the short run. I was one of three Senators who put in the
budget $180 million for counseling. It is not some far-reaching plan to
deal with the subprime crisis; it is dollars right now. In fact, the
dollars for counseling would get dollars into the hands of nonprofit
groups in the country to help families out of this next month, so to
speak. Those dollars--$180 million--will begin being spent in March.
That will work. Those counselors are experts. They are certified, and
they know how to work with families. We have to invest in that.
I will conclude with this thought. If you walked through the streets
of New Orleans after Hurricane Katrina, I don't think many people would
be scratching their heads and wondering whether that was a category 5
hurricane or a category 4. It didn't matter; it was devastating. I
don't think we ought to wonder whether an economist tells us we are in
a recession. We are in a recession.
We know something about the aftermath of Hurricane Katrina. When all
of the reporting was done, when that horrific nightmare engulfed so
many families, who were washed out of their homes and their hopes and
dreams were gone, I think we learned a lot from what didn't happen
before the hurricane.
We know as Americans that devastation doesn't always come with the
awful swiftness of a hurricane. Sometimes it happens much more
gradually, over time, when you don't make the right decision and
prioritize and when you don't make the right investments. We are not
doing that right now. We are not making the investments we should make
in children in the dawn of their lives. We are not making an investment
in fiscal responsibility to the extent we should. We are not investing
in our infrastructure. Maybe all of those decisions can lead to a kind
of slower moving Katrina or slower moving hurricane, which is an
economic hurricane, or a devastating hurricane that dashes the hopes
and dreams of children and their families.
So when we make a decision about what will be in the stimulus package
to help people in the short run, we also have to get to work on a long-
term strategy for economic growth, investing in our children, and
making sure families can grow. I am concerned about how we are doing
that or not doing it in Washington. We should learn from the horrific
nightmare that was Hurricane Katrina. We should learn from, frankly,
information such as this that tells us what will work in the short run
to get us out of this mess and stimulate the economy and get dollars in
the hands of Americans who will spend the dollars, which will jump-
start or jolt our economy. I think we can come together and do that. I
don't think what we have seen so far gets us to that point.
I am grateful for the opportunity to talk about these issues. I know
they are central not just to Pennsylvania and our families but in
States such as Minnesota and other States across this country. We have
a lot more work to do to get the stimulus package right to help our
economy.
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