[Congressional Record Volume 156, Number 131 (Monday, September 27, 2010)]
[Senate]
[Pages S7456-S7457]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FISCAL AND ECONOMIC CHALLENGES
Mr. KAUFMAN. Mr. President, although we have come a very long way
since January 2009, our Nation faces profound short-term and long-term
fiscal and economic challenges. In the short term, we need to do more
so our economy will grow significantly again. This should include the
small business jobs bill, the extension of middle-class tax cuts, and
additional spending on infrastructure, as the President has proposed.
In the longer term, we need to shore up our fiscal balance sheet and
develop policies, including investment in innovation, research and
development, clean energy and science, technology, engineering and
math--STEM education--that promote sustainable growth and job creation.
Unfortunately, instead of distinguishing between our distinct short-
term and long-term problems, we have conflated them, focusing most of
our attention on our immediate fiscal deficits.
Sometimes overlooked is that these deficits are, in a large part,
legacies of unpaid-for policies of the previous administration, whether
they be the wars in Iraq and Afghanistan, not paid for, tax cuts for
the wealthy, which were passed and not paid for, or Medicare Part D,
which was passed and not paid for. In addition, the economic fallout
from the financial crisis, a primary driver of our current fiscal
deficits, was itself a product, as you well know, Mr. President, of
governmentwide deregulation.
While we all support cutting wasteful government spending, it is not,
by itself, a solution to our fiscal woes. Indeed, if we were to
eliminate all nondefense discretionary spending in the next fiscal
year--Department of Justice, Department of Education, Department of
Energy--we would still have a deficit of more than $700 billion; that
is, if we eliminate all of them. We hear people coming to the floor and
talking about cutting that, that is going to save us. If we eliminate
the whole thing, go down Constitution Avenue and close down every
building, we would still have a deficit of more than $700 billion.
This focus on Federal Government spending is shortsighted and even
counterproductive, since it distracts us from the real problem of
addressing our weak economic fundamentals.
All too many Americans are painfully aware of the current economic
conditions in which we find ourselves. It is clear these conditions
would even be worse if not for the Recovery Act. It saved us from
another full-blown depression and allowed us to rebuild our economy and
add jobs. The nonpartisan Congressional Budget Office concluded that
the American Recovery and Reinvestment Act resulted in anywhere between
1.8 million and 4.1 million more jobs.
The CBO also estimated that our gross domestic product was 1.7
percent to 4.2 percent higher in the first quarter of 2010. Other
economic indicators show similarly strong results, following the
passage of the Recovery Act. After the passage of the Recovery Act, the
markets hit bottom, with the Dow 6,547, on March 9, 2009, just about
the time we passed the Recovery Act. Since we passed the Recovery Act,
the Dow has risen dramatically, climbing above 11,000 early this year,
even remaining above 10,000 amidst recent market turmoil, and most
recently spurting higher by more than 7 percent in the month of
September alone. All that happened after we passed the Recovery Act.
The Purchasing Managers Index, a leading indicator of business
confidence, has also been generally trending upward since the passage
of the Recovery Act. That we are not where we want to be is testament
to the magnitude of the problems inherited by the President and this
Congress. Indeed, millions of Americans are without jobs and
overburdened with debt. Although large corporate balance sheets are
generally strong, many small businesses have limited access to credit,
a condition which will be helped with the small business jobs bill,
which the President signs today.
What is more, many businesses will simply not invest without consumer
confidence. In such an environment, where consumer and business
confidence is low, there are obviously limits to the effectiveness of
monetary policy, irrespective of the creativity of the economists and
policymakers at the Federal Reserve.
Fiscal policy, whether through direct government spending or through
tax or other incentives, is the one lever we have to spur growth. As
Olivier Blanchard recently stated: ``If fiscal stimulus helps reduce
unemployment and thus avoid an increase in structural unemployment, it
may actually largely pay for itself and lead to only a small increase
in debt relative to the alternative of doing nothing.''
Conversely, policies aimed at an immediate spending cut and a
tightening of the proverbial fiscal belt could actually harm our
economy. Therefore, it is critical we extend middle-class tax cuts and
expand, not contract, stimulus measures.
In addition, the President's $50 billion of infrastructure investment
is a good way to put more Americans back to work, to make a downpayment
on rebuilding our infrastructure.
Of course, our need to promote economic growth in the short term does
[[Page S7457]]
not make the need to address long-term fiscal problems any less urgent.
Former OMB Director Peter Orszag said in late July:
It would be foolish to dramatically reduce the deficit
immediately, because that would choke off the nascent
economic recovery. But it would be equally foolish not to
reduce the deficit significantly by, say, 2015, because that
would imperil continued economic growth at that point.
Accordingly, while we should not be raising taxes on middle-class
families in the midst of a recession, we should also not make permanent
the Bush tax cuts on the top 2 percent of Americans. Doing so would
cost close to $700 billion over the next 10 years. That is not a policy
of fiscal discipline.
The path to fiscal sustainability will require tough choices and
tradeoffs. We, therefore, need to be supportive of efforts and
decisions of the new bipartisan debt commission. But as important as it
is to put our fiscal house in order, our Nation's future prosperity
will not be determined by accountants in green eyeshades. If we hope to
promote sustainable economic growth and job creation, it is critical
that we seize the initiative on clean energy and that we support
science, technology, engineering, and mathematics fields.
If we want to get the most bang for our buck now and long into the
future, we should invest in clean energy. Studies show that a $1
million investment in clean energy will create more than three times
the number of jobs than if those dollars were invested in fossil fuel-
based energy projects.
The truth is that clean energy is the future of the global economy,
and we should be investing in it today. Since 2005, global investment
in clean energy has exploded, growing by 230 percent. But the United
States is not keeping up with the global clean energy revolution. Last
year, 10 G20 countries invested a higher percentage of gross domestic
product in clean energy technology than the United States did. These
investments created many jobs--over 1 million jobs in China alone. This
growth is a direct result of policy decisions that commit to a clean
energy future. The United States has failed to make a significant
commitment to clean energy. Over the recess, Ernst & Young announced
that for the first time, China had overtaken the United States as the
most attractive country for renewable energy projects.
We need to provide certainty in the energy market for investors,
businesses, and industries. They tell us that none of this will happen
without a price on carbon. Pricing carbon will reflect the true cost of
our energy sources and enable market forces to drive American ingenuity
to develop clean energy technologies that will create jobs, enhance
U.S. competitiveness, and establish the long-term economic security we
need. Pricing carbon is the most effective policy tool available to
transition the Nation away from dirty fossil fuels. It will create
incentives for businesses and industries to find the lowest cost
solutions to reducing carbon pollution. Again, this is a market-driven
solution. Leave it to the private sector. Give them the incentives to
do the right thing and develop clean energy.
In addition to investing in clean energy, we need to promote STEM--
science, technology, engineering, and math--education. STEM jobs will
be the jobs of the future. Whether it is energy independence, global
health, homeland security, or infrastructure challenges, STEM
professionals will be at the forefront of the most important issues of
our time. In fact, according to a new study released by Georgetown
University's Center on Education and the Workforce, by 2018 STEM
occupations are projected to provide 2.8 million new hires. This
includes over 500,000 engineering-related jobs.
We must also continue to support research and development--a
challenge that requires significant Federal as well as private
investment. In our current economy, it is often hard to imagine
investing more in anything, but more research and development funding
is fundamental to high-tech job creation. A recent report from the
Science Coalition features 100 companies that can be directly traced to
influential research conducted at a university and sponsored by a
Federal agency. Examples include Google, Cisco Systems, and SAS.
It is imperative that we get our economy growing again so that we are
in a strong position to tackle the very real challenges of the future.
In the long term, our task will not be simply to get our government's
finances under control. As important as that is, it will also involve
making the needed investment in areas such as clean energy and STEM
that will ensure long-term growth and job creation. We face complex
challenges in the 21st century. They include harnessing eco-friendly
sources of energy and providing efficient and effective health care for
an aging population. By making these investments in our future, I am
confident we can foster the innovation necessary to successfully
address these problems and reestablish our leadership in an
increasingly competitive global economy.
Finally, Americans always had the ingredients for success, and I am
confident that in the coming months and years, the American ethic of
innovation and hard work will once again return our economy to the path
toward prosperity.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Arizona is
recognized.
Mr. KYL. Mr. President, I ask unanimous consent to speak for 15
minutes.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
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