[Congressional Record Volume 154, Number 20 (Thursday, February 7, 2008)]
[Senate]
[Pages S755-S757]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           ECONOMIC STIMULUS

  Ms. MIKULSKI. Mr. President, I wish to talk about the stimulus 
package and I wish to talk about our economy and I wish to talk about 
the Senate.
  I am very frustrated with the Senate. We spent a week maneuvering and 
twisting over parliamentary procedure. Our processes are slowing us 
down in meeting the day-to-day needs of the American people and the 
long-range needs of our country.
  Our country is at risk. We are fighting a global war against 
terrorism. Our dollar is worth a box of Kleenex. We need an economic 
stimulus and an economic recovery package, and we are fooling around on 
motions to proceed and clotures and backward and forward, and so on. 
The American people wonder what are we doing. They believe that when 
all is said and done, more gets said than does get done. And guess 
what. Put me in the column with the American people.
  I am very frustrated with this institution. The rules were designed 
to make sure the minority party could always be able to express their 
view. That should happen. But it was not to bottle up progress. It was 
not to stifle the opportunity to get our economy back on track. It was 
not to tie up the Senate so we could not help 250,000 vets, 20 million 
senior citizens, and actually get money in the pocketbooks of people so 
we can start getting our economy back on the track.
  Everyone agrees we need to jump-start our economy, everyone agrees we 
need to do it now--everybody but the other side of the aisle who is 
sitting on their hands and sitting on parliamentary procedure and 
sitting on you know what. I think it is time they get up, and I call 
out to the people: Flood our phones, get them off this, and get this 
economy going.
  We know we are being very hard hit. Last month, we lost 17,000 jobs 
in the service sector. That was supposed to be job-loss proof. Families 
all over the country are losing their homes to the subprime crisis. The 
price of food, gas, and health care is going up.
  We voted last night on a parliamentary procedure that would have 
moved this legislation on the economic stimulus forward. It lost. It 
lost by one vote. But did it lose on a majority? No. Under the rules of 
the Senate, we need 60 votes to win a majority or we need 67 votes to 
win a majority. I thought a majority used to be a majority. Now we find 
that one vote--one vote--is standing in the way of moving the economic 
stimulus package.
  I say to America: You watch cable TV, you listen to the chattering 
class, you read the newspapers. You know where that one vote lies. You 
see those empty chairs over there? One vote lies there. Flood our 
phones with calls, flood our Internet, flood our fax machines so we can 
get moving.
  Last night what we had was a plan to move the economy forward. It was 
a well-thought-out plan of tax rebates to help families. We included 
not only that but 250,000 disabled veterans and 20 million seniors. At 
the same time, we extended unemployment insurance for an extra 13 weeks 
because for people who lost their job, it is now taking a longer time 
to find another job. And we help small business.
  Last night, we Democrats voted to stand up for those disabled vets, 
for those senior citizens, for those people who have lost their jobs to 
make sure they will have the opportunity to benefit from the stimulus, 
and as they benefit from the stimulus, because they have such modest 
incomes, the money they get will go right into the economy. It will not 
go into paying the bar bill for somebody who has a fifth home in the 
Hamptons. It will go into the economy.
  This bill helps 250,000 disabled vets. They say they did not qualify; 
they did not have earned income. My God, my God. I have a veterans 
advisory board. I meet with the disabled vets. Some of them belong to 
the Purple Heart Association, some come in wheelchairs, some come with 
canes because they bear the permanent wounds of war.
  We always say a grateful nation never forgets, but we forgot them in 
the stimulus package. We forgot 250,000 of them. If a grateful nation 
never forgets, let's say we think you earned that. We think you earned 
that at Iwo Jima. We think you earned it at Normandy and Porkchop Hill 
and the Mekong Delta. If you have worn the uniform, you have earned it.
  Now we want to help 20 million seniors who are left out because they 
said those Social Security benefits are not earned income. You pay your 
Social Security based on your wages. I think that is earned 
income. Every day there are people out there working, or who have 
worked every day. They have spent their whole lives building our 
economy, building our Nation, and they are ready to do it again. All 
they need right now is to qualify for what they should be entitled to.

  People say: Well, there she goes again. You know, Barb has a master's 
degree in social work. Well, you bet I do. And that social work took me 
into the neighborhoods and families of our constituents, and as a 
Senator I often try to think that way. While everybody here likes to 
talk about the macroeconomics and they take codels to Davos to hang out 
with the rich and famous, who want to be even more rich and more 
famous, I worry about the macaroni and cheese issues. And the macaroni 
and cheese issues that we have to focus on are what is happening in our 
economy.
  But I just don't want to be a bleeding heart--though I am happy to be 
a bleeding heart. I am happy to be a bleeding heart, but I know that 
something called Moody's Economy.com--Moody's Economy.com--tells us 
where we get the most stimulus from the techniques used to do the 
stimulus, and what do they tell us? They tell us to give it to the 
people who need it the most--to extend unemployment benefits and to 
extend other benefits, such as LIHEAP, which helps people with their 
energy costs.
  Now, 41 Republicans blocked this bill. They called it a Christmas 
tree. They said it was loaded with pet projects. Well, yes, disabled 
vets are a pet project with me. I stand guilty. Disabled veterans are a 
pet project with me. Clean up the mess at Walter Reed, clean up the 
compensation system, and include them in the stimulus package. You bet. 
But I also resent that. Disabled veterans are not ornaments or 
decorations, they are heroes, and they are the backbone of our country. 
So one vote stands between the American people and some help during 
these tough times.
  I thank the eight Republicans who voted with us last night to move 
the bill forward so we could vote up or down on amendments. We need one 
more Senator to join us, one more Senator who will stand up for the 
people, for families, for seniors, for wounded warriors, one more vote 
against politics as usual. I say over there to those empty chairs: Will 
one of you come forward and join this very important effort?
  Mr. President, I yield the floor, and I suggest the absence of a 
quorum.
  The PRESIDING OFFICER (Mr. Brown). The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. GREGG. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GREGG. I wanted to rise briefly to express my concerns at the 
process as it presently stands here in the Senate. I am tempted to say: 
Wherefore art thou the stimulus package, because there is no reason 
there should not be action on it now.

[[Page S756]]

  I had some very serious reservations about this whole effort on the 
stimulus package. I believe very strongly that we need some sort of 
stimulus to this economy, that the economy is beginning to slow fairly 
dramatically, but that the present framework of the stimulus packages, 
as they were agreed to in the House and certainly the Senate Finance 
Committee, have very distinct flaws. But that does not mean we should 
not bring the packages up and vote on them. Last night we voted on the 
Finance package. It did not pass. It did not pass because it added $44 
billion of additional money to an agreement which had already been 
reached between Speaker Pelosi, Republican Leader Boehner, and the 
administration, a bipartisan agreement which was reached with the tacit 
approval of the leadership of the Senate, as I understand it.
  Although I was not intimately involved in the negotiations, my 
understanding is the way this proceeded was that the Senate basically 
said to the House--the Senate leadership in the sense of Senator Reid 
and Senator McConnell said to the administration and the House: You see 
if you can reach an agreement on this stimulus initiative. And the 
administration, in good faith, under the leadership of the Secretary of 
Treasury, negotiated with Speaker of the House Pelosi and with 
Congressman Boehner, and they reached an agreement. It was an agreement 
that involved very distinct compromises, compromises which basically 
reflected a classic political process where you basically put on the 
table your ideas, the other side puts on the table their ideas, then 
you work to the middle and come up with a concept that both sides can 
at least be comfortable with, even if they do not accept all of the 
details.
  This package, as we all know, is a $150 billion package, the majority 
of which is a rebate, to people who pay taxes, of $600 to $1,200, and 
the balance of which is an incentive, especially to small businesses to 
go out and invest and as a result create hopefully more jobs and a more 
efficient economy.
  When it got to the Senate, for reasons which I still do not 
understand, the Senate decided it wanted to assert some prerogative 
here, even though the Senate leadership had said: Let the House 
leadership and the administration do the basic negotiations. We got a 
package out of the Finance Committee which took a $450 billion package 
and increased it by $44 billion.
  A lot of that package was basically baggage being thrown on a train 
leaving the station. It had clearly nothing to do with stimulating the 
economy over the short run. There were tax benefits for the coal 
industry, tax benefits for the wind industry; there were a whole 
variety of things that had nothing at all to do with stimulus. They 
simply were there due to the fact that certain groups around here had 
enough influence to be able to put their baggage on this train.
  What we have to remember is every dollar that is being spent on the 
stimulus package is being borrowed from our children and our children's 
children, because we do not have a surplus now. We do not have money to 
rebate. I mean ``rebate'' is the wrong term. This is basically money 
being borrowed from our children being paid to us, people who are 
working today or people who are paying taxes today under the House 
package.
  Then on the Senate package, it is another $44 billion of money being 
borrowed from our children and our children's children to be sent out 
the door today, for the purposes of different interest groups who have 
put their points forward.
  The majority leader said we would take the Senate package or we take 
no package, which makes no sense at all. The House package was a 
bipartisan, negotiated package, which had the Speaker of the House, who 
nobody can accuse of being a conservative--she comes from San 
Francisco. I do not think she is a conservative--the Speaker of the 
House, and the majority leader, the Republican leader of the House, Mr. 
Boehner, whom nobody can accuse of being a liberal, comes from 
someplace in Ohio, but he has quite a track record around here, Mr. 
Boehner, of being a conservative of note.
  They reached an agreement. It was not as though it was the 
Republicans saying, ``This is the package,'' or Democrats saying, 
``This is the package.'' It was an agreement.
  So when it came over here, yes, there might have been adjustments 
that needed to be made, but to add $44 billion to it and say: Take that 
$44 billion addition or leave it, makes no sense at all in the context 
of reaching some agreement quickly and moving it out the door.
  In fact, Senator McConnell, I think, had the best idea. He said: 
Let's take the House package and add three things to it, three things 
that there seems to be consensus on around here: One was to make sure 
that seniors got a rebate so they could also participate in the 
stimulus initiative; two was to make sure that disabled veterans got a 
rebate so they could participate; and, three, to correct the technical 
error in the bill relative to illegal immigrants.
  So Senator McConnell said: Let's do those three things; add them to 
the House package, send it to back to the House, the House has agreed 
to approve that, we will send it to the President, and we will be done 
quickly, which is the whole purpose here.
  I am not arguing for the stimulus package. We know a stimulus of this 
nature, which is pure Keynesian economics, where you take money and you 
throw it at the economy without any sort of discretion on how the money 
is going to be used in order to produce long-term productive forces in 
the economy, which is simply saying to consumers: Here is the money, go 
out and spend it, hopefully that will raise the economy--we know under 
classic Keynesian approaches, which is what this stimulus package is, 
that the essence of that is to get it out the door, get those dollars 
into the consumers' hands quickly. So every day, every week of delay 
only aggravates the relative effectiveness of this stimulus exercise.
  We also know that because of the way our Internal Revenue Service is 
structured, the earliest they are going to be able to get these rebate 
checks out the door, if we were to act today, this week, would probably 
be May, middle of May; more likely that they are going to get out in 
June and, according to the economists who testify around here and give 
us our counsel--for example, Dr. Orszag, head of the CBO, said that the 
impact of those dollars going out the door, those $600 or $1,200 
rebates under the House bill will not be felt probably until the late 
third quarter of this year.

  That is the fast track. Who knows what the late third quarter of this 
year will bring. I hope it will bring some turnaround in the economy. 
And certainly with monetary policy being changed in this country, where 
you are seeing significant reductions in the interest rates by the Fed, 
it is very likely we will see some uptick in our economy as we head 
into the third and fourth quarter of this year. I certainly hope that 
will occur; that the housing industry which has created this problem, 
as a result of having a housing bubble, will have begun to work its way 
through.
  But in any event, we know that to delay this further, so we push 
these stimulus events, such as giving people $600 to go out and spend, 
farther and farther into the year, potentially into the Christmas 
season or into next year, is not going to address the underlying 
problem, which is the next two to three quarters, which look as if they 
are going to be extremely soft, potentially extraordinarily soft 
relative to economic activity.
  So action should be taken now. What has been suggested here to 
accomplish action--it is a very reasonable suggestion--is to take the 
House package, which was negotiated between the Speaker of the House, 
the Republican leader in the House, and Secretary Paulson, add to it 
the two or three things which there is consensus on over here, which is 
the payment to seniors, payment to veterans, and correcting the illegal 
immigration language, and passing it, and then move forward.
  If you accept this concept that we should do this sort of Keynesian 
stimulus event, that is what we should do. I must, as a matter of 
disclosure, say I have serious reservations about not only--I think the 
Senate package is terribly irresponsible, because it adds $44 billion 
to an agreed-to bipartisan agreement, but I also have problems with the 
underlying package. Because, for me, I believe we do need to stimulate 
the economy, but I think we need

[[Page S757]]

to focus the dollars on the problem, and the problem is the credit 
lockdown that is occurring generally in the economy but that is 
specifically being driven by the housing market problems. We know that 
for the last few years there has been an expansion in lending in the 
housing arena which was not supported by the underlying collateral or 
by the ability of people who were getting these loans to pay those 
loans under the terms of those loans. These were called subprime loans.
  What happened was people were attracted into buying a house, which 
had been built on speculation, and they were attracted in on an 
interest rate on the mortgage on that house which was very low, with 
the understanding that 2 or 3 years later that mortgage rate would jump 
fairly considerably.
  Well, unfortunately in many instances what happened here was, we 
built a lot of housing stock that could not be purchased, or if it was 
purchased, it was being purchased at costs which were below the real 
value of production, and on top of that, we were saying to people who 
did not have the incomes necessary to support the higher interest rate 
which was going to hit them in 2 or 3 years, the 2 or 3 years being 
now: You take the loan, we will worry about that later.
  Well, the ``later'' is today. The bubble is bursting. People are 
being put under extreme stress because many people who bought these 
homes cannot afford the increase on what is known as their ARM, their 
adjustable rate mortgage.
  It is severe. In parts of this country it is extremely severe--in 
Florida, Arizona, California. What is happening is you see a classic 
bubble where as the housing market starts to contract, lending 
generally starts to contract. Lenders who have these housing loans on 
their books, or who have sold these housing loans and cannot figure out 
how to get out of their contracts, are now trying to figure out how to 
get their books in order, to rebuild their capital and restructure 
themselves.
  As a result, good loans in other areas that are being repaid are 
starting to be chilled, as is new lending. Consequently, the entire 
economy starts to lock up because it is hard to get loans for anything, 
especially in distressed housing areas. The people who have these loans 
and live in these homes are finding themselves under the pressure of 
foreclosure. In many instances, these people are hard-working Americans 
who can pay a reasonable rate, but because the adjustment is not 
reasonable--it is very high under ARM agreements--they are not able to 
meet the obligations of the mortgage. So we should be focusing our 
efforts on that part of the economy.
  I congratulate the Secretary of the Treasury because he has tried to 
do that both through jawboning, the lending community, and by setting 
up the new HOPE proposal which has put a big chunk of money out there, 
over $100 billion, the purpose of which is to help people restructure 
those loans so that people who can make their payments under the 
original loan agreement or something near to the original loan 
agreement, because they have good jobs and they can make their interest 
payments, aren't forced out of their homes as a result of a jump in 
their mortgage rate. Progress is being made there. Over 370,000 people 
have been helped.
  But the problem is so large that that is not necessarily going to 
stabilize the market and free up the lending machines in America. So 
additional things should be done. For example, Senator Isakson of 
Georgia has suggested we have a one-time focused tax credit given to 
people who buy one of these homes in the inventory within the next year 
and that the home has been produced during this period of excess 
production and allow that to incentivize people to go back in the 
market and start to get this market going again. That is what we need 
to do.
  There are other ideas. The expansion of the FHA is an idea which--I 
don't quite understand why we haven't seen that bill come back to the 
Senate. It is in conference. It should be done soon. Increasing the 
lending limits on Freddie Mac and Fannie Mae is a dangerous step unless 
it is coupled with reforms necessary to make sure Freddie Mac and 
Fannie Mae have the underlying capital to support an expansion, but it 
is certainly something that should be considered. There are initiatives 
that could be focused much more in a targeted way and would actually do 
something to correct the problem and would, in the long and short run, 
from my viewpoint, have a much better effect on the economy.
  In addition, if we are going to try to stimulate the economy through 
classic Keynesian activity, I am not too excited about that, but we 
ought to put it on the productive side so we actually create a more 
efficient economy that is more productive and, therefore, capable of 
producing more jobs as we move into the future. Our problem may be that 
we don't have enough jobs as we move into the future. The way you get 
around that is to create an attitude in the marketplace so people are 
willing to go out and invest, take risks, be entrepreneurs, and create 
more jobs. There are ways to do that other than just giving people $600 
to go out and spend arbitrarily, which they may spend on a product that 
is not even manufactured in the United States, in which case there has 
been no stimulus to the economy. If somebody buys a TV made in China 
with their $600, that has no stimulus effect on our economy because the 
dollars end up in China.
  It is important to understand that all this money comes from our 
children. We don't have a surplus to fund this stimulus package. 
Therefore, when we do stimulate, we need to do it in a much more 
focused way which is going to strengthen our economy and is going to 
address the underlying problem of the credit lockup which has been fed 
by the housing bubble. I hope we will take that up first. But, 
obviously, we will not take that approach. There is a significant 
majority that is going to support a stimulus package which is Keynesian 
based. So be it. But if we are going to do it, let's do it in the way 
which causes the least harm. The way to do that is to get it out the 
door quickly, have it be the package which essentially left the House, 
and not have the Senate throw in another $44 billion which we have to 
borrow from our children on top.
  Those are my concerns. I appreciate the courtesy of the Chair.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Jersey is recognized.
  Mr. MENENDEZ. Mr. President, I understand morning business has ended.
  The PRESIDING OFFICER. It is about to close.

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