[Congressional Record Volume 157, Number 90 (Wednesday, June 22, 2011)]
[Senate]
[Pages S3982-S3984]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          AUSTERITY DISCONNECT

  Mr. HARKIN. Madam President, I wish to pick up a little bit again in 
my remarks on what the majority leader was just talking about; that is, 
the lack of focus on jobs in this country.
  I am disturbed by the growing disconnect between Washington's 
obsession with austerity and retrenchment and cutting and slashing and 
the disconnect from that with the dramatically different needs, 
priorities, and anxieties of ordinary working Americans. The so-called 
chattering class here in Washington has persuaded itself that the 
biggest issue is the budget deficit. But Americans outside the Beltway 
are most concerned with a far more urgent deficit, the jobs deficit, 
and their concerns are well founded.
  Our Nation remains deeply mired in the most protracted period of 
joblessness since the Great Depression. Real unemployment is close to 
16 percent. Tens of millions of people who are employed are 
increasingly anxious about being able to hold on to their jobs and to 
make ends meet.
  The American people get it. They want to get this economy moving 
again, and they know the best way to reduce the budget deficit is to 
help 25 million unemployed Americans get good, middle-class jobs and 
become taxpayers once again. With the private sector engine sputtering, 
there is an absolutely critical role for the Federal Government in 
creating demand and preventing a double-dip recession.
  We have to wonder, is Washington listening to working middle-class 
Americans? Is Washington listening to the legions of unemployed and the 
underemployed who are desperate for solutions to their plight? Sadly, I 
think the answer is, no, Washington is not listening.
  Many of our political leaders are treating the jobs crisis as 
yesterday's news. They are putting deficit reduction above all else. 
They are demanding extraordinary--in fact, unprecedented--cuts to 
government funding and government investment. It is akin to a bidding 
war, driven by the hysteria of the auction rather than the value of the 
lot: Let's cut $1 trillion. No, $1.5 trillion here. No, I have $2 
trillion over here. How about $4 trillion? It is akin to a bidding war 
to see how much we can cut government funding and investment.
  I have to ask, has Washington lost its mind? Don't we realize these 
Draconian cuts are the economic equivalent of applying leeches and 
draining blood from a sick patient? Don't we realize this will make 
both the jobs deficit and the budget deficit far worse?
  Of course, we must act aggressively to bring deficits under control. 
But we have to do this in ways that continue to create more jobs while 
also improving the long-term competitiveness of the American economy.
  We have reached the point of maximum danger in the fragile economic 
recovery. We are at the point of maximum danger. Employment growth is 
weak and threatens to stall out altogether. Businesses remain reluctant 
to invest and hire for the simple reason that there is not sufficient 
demand for goods and services. All those unemployed and underemployed 
people are only spending enough to make ends meet. If they are getting 
unemployment compensation, they are barely making ends meet. There is 
no excess money. The middle class is tapped out, with stagnant incomes, 
insecure jobs, high levels of mortgage, and high levels of consumer 
debt. The threat of a double-dip recession is far too real, and the 
fear of more unemployment also hangs right over tomorrow's horizon.
  In this context, to insist that we slash Federal funding by trillions 
of dollars is beyond foolish. It is government malpractice. It flies in 
the face of everything we know and have learned about how economies 
work.
  Two weeks ago, Federal Reserve Chairman Bernanke stated the obvious. 
He warned us:

       A sharp fiscal consolidation focused on the very near term 
     could be self-defeating if it were to undercut the still-
     fragile economy.

  Again I ask, is anyone listening? The alarm bells are ringing all 
over America.
  Recently, the Federal Reserve Bank of New York published an online 
article about what it called ``the mistake of 1937.'' What is that all 
about? The New York Fed was referring to the premature fiscal and 
monetary pullback in 1937 just as the economy was beginning to get its 
legs to get out of the Depression. That premature retrenchment was a 
historic mistake. It killed the recovery then in progress and sent us 
back into the Great Depression for another almost 4 years until it was 
finally ended with the stimulative spending of World War II.
  Paul Krugman, the Nobel Prize-winning economist, says that in 
important ways we have already repeated the mistake of 1937. We have 
taken our eyes off of what should be our No. 1 priority--creating 
jobs--and we have pivoted to an obsession--again I repeat, an 
obsession--with deep, short-term budget cuts which by their very nature 
will destroy jobs and weaken the economy.
  Let me cite another glaring example of the disconnect between 
Washington and the rest of the country. Here in Washington Republicans 
assert that the Recovery Act was a failure. Why do they claim that? 
Because they claim President Obama promised the Recovery Act would 
reduce unemployment to 8 percent and because that has not happened, it 
was a failure. We have researched this. The Republican talking point on 
this President Obama promise has no basis in fact. Independent fact 
checkers in the media have tried to find such a promise or a statement 
by President Obama, and they have come up empty.

[[Page S3983]]

  I say again to my Republican friends, if you have some proof of 
President Obama saying the Recovery Act would reduce unemployment to 8 
percent, please bring it forward. All we have found in checking this 
was an illustrative table from a report that was published--are you 
ready for this?--before President Obama took office, speculating that 
some future stimulus program might reduce unemployment to 8 percent 
depending on how big the stimulus was.
  Those same fact checkers found that President Obama did promise one 
thing of the Recovery Act: He said it would prevent a new Great 
Depression and prevent unemployment rates of 12 or 13 percent. That did 
happen.
  Fortunately, ordinary Americans have a better understanding of the 
Recovery Act. They know hundreds of billions of dollars in middle-class 
tax cuts in the Recovery Act gave them a modest but a significant boost 
in income. They know that because of the Recovery Act's assistance to 
the States, many tens of thousands of teachers, police officers, and 
other essential employees were able to keep their jobs. They have seen 
countless highway and other infrastructure projects funded by the 
Recovery Act. All of these have either preserved jobs or created new 
and more jobs. They provided significant benefits for our people, 
including better roads, better bridges, better schools, and other 
critical infrastructure for the future of our country.
  Thanks in large part to the Recovery Act, we have gone from losing 
700,000 jobs a month in late 2008 when President Obama took office to 
adding new jobs now for 16 consecutive months building the 
infrastructure of America. I know a little bit about this. If you go 
over to my office, you will see hanging on my wall in my office my 
father's WPA card. To all of you young people who do not know what WPA 
stands for, it stands for the Works Projects Administration. It started 
under Franklin Roosevelt during the Great Depression to hire people who 
were unemployed to work on infrastructure projects.
  I know my father worked on three of those projects. One was Lake 
Ahquabi near Indianola, IA, which is still a State park and 
recreational area enjoyed by people all year-round, especially in the 
summertime. Another was a high school in Indianola, still in use, built 
by WPA. The other was the Maffitt Reservoir built by the WPA for a 
holding of the city of Des Moines reservoir. All three were built by 
the WPA, still in use today. We can see countless examples of this all 
over America. We have schools in Iowa which have been modified and 
upgraded but still were built by the WPA. That is true all over the 
country.
  What happened is they built an infrastructure that helped the private 
sector be more efficient and more productive and make lives better for 
our people. We need to do that again, and we need to invest all over 
America. The Recovery Act started that, but now we know it was not 
enough and it was not long enough. Just as in 1937, we are about to 
repeat that same mistake. If we had kept the stimulus going through 
1937 and 1938, we would not have fallen back as we did at that time.
  The nonpartisan Congressional Budget Office estimates that through 
the end of 2010 the Recovery Act had raised the gross domestic product 
by as much as 3.5 percent and increased the number of employed 
Americans by as many as 3.3 million people--employed in the public 
sector but also in the private sector.
  Business columnists and pundits have no doubt that the Recovery Act 
has boosted the economy. You can go to CNBC or Bloomberg on cable TV. 
In recent months, it has almost become a cliche for commentators to say 
this: Sure the economy is growing again, but this is largely because of 
the Recovery Act and the easing by the Federal Reserve. As those things 
wind down, the economy will be in danger once again.
  OK, it seems to me, then, that we do not want to wind them down. Why 
wind them down and throw us into a tailspin again? These business 
pundits are correct. The shot in the arm provided by the Recovery Act 
is now winding down. It threatens our fragile recovery. In the absence 
of Federal assistance, many States are making deep budget cuts or 
laying off their employees. In Texas, Governor Perry has proposed to 
cut education funding by a staggering $10 billion. In New York City, 
Mayor Bloomberg has proposed laying off 6,000 teachers. Total State and 
local government layoffs just in the last 6 months have been nearly 
350,000--350,000 people who were working no longer work. They are laid 
off. Where will the demand be for goods and services from the private 
sector from all these laid off individuals? Now, if the Federal 
Government follows suit, after what is happening in our States, with 
these massive short-term spending cuts, the prospect of a more severe 
recession will be very real, and we will go off that cliff.
  So I reject the false choice between addressing the budget deficit 
and addressing the job deficit. We can and must do both. As I said 
earlier, the budget deficit is in large part caused because of the high 
jobs deficit. High unemployment over the last 3 years has ballooned the 
deficit by hundreds of billions of dollars because tax revenues have 
fallen. Federal spending has increased for things such as food stamps, 
nutrition assistance, unemployment benefits, Medicaid. How often do we 
hear that Medicaid spending is skyrocketing? You know, before you get 
Medicaid, you have to fall under certain poverty guidelines. The reason 
Medicaid is going up is because people are not working. People are not 
working because there aren't any jobs. And there aren't any jobs 
because the Federal Government will not prime the pump, because the 
Federal Government--now we are being told we must cut back with huge 
cuts, tremendous cuts that will further make more people get laid off 
and will further make the problem even worse than it is now.
  The smartest approach is to take measures to sharply reduce the 
deficits in the medium and long term but to invest in job creation in 
the short term. We have it backward. Washington now has it backward. My 
Republican friends have it backward. They are going to slash and cut, 
and that is going to push us into another recession. Better we invest 
in the infrastructure and keep new jobs and more jobs out there that 
will create the pent-up demand we need for goods and services. That 
will help us reduce the deficit in the medium and the long term.
  We have to do it right, a balanced way--some spending cuts, revenue 
increases. People say: How can we invest, Senator Harkin, in all these 
roads and new schools and new infrastructure, new energy systems--how 
can we do that when we are broke? Will we just have to borrow more 
money from China, go further into debt, put more debt on our kids and 
grandkids' heads?
  I thoroughly reject the premise under which the Ryan budget and the 
Republican budget is based. It is based on the premise that we are 
broke, that we are poor, that we can't afford to have teachers and we 
can't afford to have more medical personnel out there taking care of 
our elderly, that we can't afford more roads and bridges and sewer and 
water systems and better school facilities and better technology and 
new energy systems--we can't afford to do that because we are broke. I 
reject that. We are not broke. We are not poor.
  The United States of America is the richest nation in the history of 
mankind. We are the richest nation on the face of the Earth. We have 
the highest per capita income of any major nation in the world. So one 
has to ask the question, if we are so rich, why are we so broke? Why 
are we so poor? The reason is because the system is broken.
  This really started with the massive tax cuts enacted under the 
George W. Bush administration in 2001. Need I remind anyone that we had 
3 straight years of budget surplus? CBO said that if we kept on the 
track we were on, we would pay off the national debt by 2010. But as 
soon as President Bush was in office, Republicans took control of both 
the House and the Senate and gave, massive tax cuts mostly to the 
wealthy in our country. That, plus two unpaid-for wars and an unpaid-
for Medicare benefit, put us into the greatest deficit and biggest debt 
we have ever had as a nation.
  If 50 percent of the problem we have with the deficit was made 
because of the tax cuts that mostly went to the wealthy, then we have 
to think seriously--no, I will rephrase that. We don't have to think 
seriously; we must act decisively to raise revenues so we

[[Page S3984]]

do not have to borrow more money. There are revenues there to be had. A 
few people made a lot of money in the last 10 years. I don't think it 
is untoward to ask them to perhaps help rebuild America. The private 
sector companies, I am told, are sitting on about $2 trillion in cash, 
and they will not invest it. There is money there. Our tax system--our 
system is screwed up. So we need both--yes, to make targeted cuts in 
certain programs. We can do that. But we also need to raise the 
revenues necessary to invest in putting people to work and rebuilding 
the infrastructure of this country.
  Republicans are saying we need more tax breaks for the wealthy. If 
working people and the middle class are taking a hit in tough times, it 
should not be to pay for more tax breaks for the wealthy. As our leader 
just said, after weeks of debate, Republicans blocked passage of a 
bipartisan small business bill, and just this week they killed the 
Economic Development Administration development bill with a proven 
record of job creation. The key to renewing America and restoring our 
economy is to revitalize the middle class. That means investing in 
education, innovation, the infrastructure, boasting American 
competitiveness in a highly competitive global marketplace. How do we 
do both? We do it by making certain targeted cuts but raising revenues 
by raising revenues. I would have to add, one of those ways we have to 
think about cutting is, why we are continuing to spend billions of 
dollars and losing American lives in Afghanistan? What are we still 
doing in Iraq? I saw a recent report that said we have spent over $87 
billion in Iraq. What do we have to show for it? Higher gasoline prices 
than ever before and a country that is still torn apart by internal 
strife.

  If we want to move ahead and create these jobs, it means a level 
playing field, fair taxation, an empowered workforce, a strong ladder 
of opportunity to give every American a shot at the middle class.
  With the fragile economic recovery, we should not reduce fiscal 
support for job creation at this time. Deficit reduction efforts can 
start but sequenced in. When the economy is recovering, that is when 
they start taking place. Now is the time to invest in job creation. We 
need to keep our priorities straight. The greatest challenge right now 
is not the budget deficit. The greatest challenge is the jobs deficit. 
The greatest challenge is the erosion of the middle class, which is 
under siege in America. The middle class is being dismantled every day. 
People are losing their savings, their health care, their pensions and, 
in many cases, even their homes. These proposed gradual budget cuts, 
drastic budget cuts will destroy jobs and further damage the economy. 
The people, the middle class of America, have every reason to believe 
they are losing the American dream not just for themselves but for 
their children.
  Instead of the Republican budget, which is being sold through fear 
and fatalism, we need a budget that reflects the hopes and aspirations 
of the American people. We need a budget that will invest to create 
jobs, that will bring future deficits under control as more people come 
to work, as fewer people need Medicaid, as fewer and fewer people need 
food stamps, as fewer and fewer people need unemployment compensation 
when they begin working and becoming taxpayers again. It is up to the 
Federal Government to take this step, and we should not be afraid to do 
so. It must be bold. It cannot be tinkering around the edges. It must 
be something that is big and that is bold and that will jump-start our 
economy. That is our No. 1 priority. I hope we can do this so it will 
not happen that we go into another Great Depression or what happened in 
the late 1930s; that we had to depend upon another war to stimulate 
Government spending and put people back to work. God help us if that is 
the only thing we can look forward to, to get our economy going again. 
We should have learned from the past, taken those lessons from the past 
and take the steps necessary right now to invest in jobs, to rebuild 
the middle class of America, and to have a fair taxation system so 
those people at the top who make so much--and I don't begrudge people 
making money, but I do begrudge if they are not paying their fair share 
in revenues to this country. That is our challenge. I hope Congress is 
up to meeting that challenge. The middle class is the backbone of 
America, and it is time this Congress showed the backbone to stick up 
for them.
  I yield the floor.
  Madam President, how much time is remaining on our side?
  The ACTING PRESIDENT pro tempore. Nineteen minutes.
  Mr. HARKIN. I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  The ACTING PRESIDENT pro tempore. The Senator from Iowa.
  Mr. HARKIN. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. HARKIN. Madam President, how much time do we have remaining now?
  The ACTING PRESIDENT pro tempore. Eighteen minutes.

                          ____________________