[Congressional Record (Bound Edition), Volume 147 (2001), Part 10]
[Senate]
[Pages 14401-14403]
[From the U.S. Government Publishing Office, www.gpo.gov]



                              THE TAX CUT

  Mr. DURBIN. Madam President, historians and political scientists will 
find this a very interesting morning debate in the Senate. Over the 
next few months, they ought to take a look at what primarily Republican 
politicians and the President are saying and mark it as a special part 
of American history because the American people really have been 
lobbied by the President and by his supporters to support a tax cut. 
They have been lobbied to support a tax cut.
  This morning we have had an array of Republican Senators coming to 
the floor to explain why a tax cut is a good thing.
  Think about it. The average person in Illinois would think a $300 
check for a person or a $600 check for a family is obviously a good 
thing. That is going to help pay for school expenses, as the Senator 
from Pennsylvania said. It is going to be around if you need it for 
whatever the cause--paying off last winter's heating bill or taking 
care of some expenses around the house. These are real things that 
families face, and $300 from the Government or $600 from the 
Government, of course, is a good thing.
  But, of course, the reason the Republicans are spending so much time 
trying to convince us it is a good thing is because there is some doubt 
as to whether, on a long-term basis, the President's tax cut is really 
the right thing for America. Do we need an economic stimulus right now? 
You bet we do. This economy apparently is continuing to go down.
  Yesterday the stock market took quite a hit. I hope it recovers soon. 
Everyone does--anyone who has a pension fund or IRA or 401(k) or any 
kind of investment. But we do need a stimulus for this economy. Alan 
Greenspan is desperately looking for the right stimulus. He has reduced 
the prime rate from time to time to try to stimulate the economy. It 
doesn't seem to be working as he hoped because long-term interest rates 
have not come down, and that is kind of an indicator as to whether or 
not we are going to be moving forward and the people who make 
investments believe we are so they can have some confidence in our 
future.
  To say we need some kind of tax cut now for economic stimulus for 
families, you bet; I think it is a good idea.

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This would have been an easy thing to vote for--$300 for individuals, 
$600 for a family. But that is not what President Bush proposed. That 
is not what passed the Senate.
  What he passed was a package of tax cuts that span 10 years. How do 
you get to a point where you can say what America's economy is going to 
look like 2 years from now, 5 years from now, or 10 years from now? 
That is where a lot of us think this tax cut proposed by the President 
went too far. He should have come in with a tax cut as a stimulus for 
this economy now. The Democrats and Republicans both support that kind 
of a tax cut. But when you expand it to a 10-year program, when you 
cannot say with any certainty what this economy is going to look like, 
you run some real risk.
  The fact is, the truth is, in a very short period of time, in a 
matter of just weeks since the President had his bill signing, we have 
received some economic information about the current state of the 
economy that shows that all the economists who painted the rosiest 
picture in the world to justify a tax cut may have been wrong about 
this year, let alone 10 years from now.
  This morning, Kent Conrad, chairman of the Senate Budget Committee, 
brought in Members to talk about some of the problems they can foresee. 
If you look at them, they are already very troubling. Even this year it 
will be necessary, because of President Bush's budget and tax cut, for 
us to take $17 billion out of the Medicare trust fund--the trust fund 
for the elderly and disabled that is clearly under siege because of the 
number of people who need it and the increasing cost of medical care. 
Already this year, because of the Bush tax cut, we are going to have to 
start raiding the Medicare trust fund.
  I can tell you that Republican and Democratic Senators alike said 
that would never happen; we are going to protect these trust funds. Yet 
already we can see that is on the horizon. Sadly, it gets worse.
  In a very short period of time, we are not only raiding the Medicare 
trust fund but also the Social Security trust fund. For what? Because 
the surplus is not adequate to cover the Bush budget and tax cut. That 
is what it boils down to.
  Those who come to the floor and take great pride in having voted for 
this Bush tax cut and this Bush budget also have to acknowledge that 
they were wrong in the economic forecast. There are already revisions 
that we are receiving showing that America's economy is not growing as 
fast as they said it would. We find ourselves in a perilous position.
  It has not been that long ago; I can remember when I was first 
elected to Congress when we had deficit after deficit. We piled up a 
national debt of $5.7 trillion. That is our national mortgage. When 
people receive a $300 check from the Federal Government, I hope they 
don't think we have paid off the mortgage before we sent the check. No. 
The mortgage is still out there for all the folks receiving the check 
and their children and their children. It is still there.
  What does our national debt cost Americans? One billion dollars a day 
in interest. How do we raise the money to pay the interest on the 
national debt? You will see it in your payroll tax. You will see it in 
your income tax. We continue to collect $1 billion a day to pay the old 
debt--the mortgage--of Americans at a time when we are sending out a 
refund of $300 for individuals and $600 for families.
  You say to yourself: What would have been the more prudent and 
careful thing to do, the conservative thing to do, if you want? 
Certainly, from my point of view, it would have been to pay down this 
national debt as fast as possible; get this off the books as quickly as 
you can so our children don't have to carry that burden and so we don't 
have to collect over $350 billion a year to pay interest on our old 
mortgage, our national debt. That should have been our first priority. 
It was not the first priority of the Bush budget.
  Second, if you are going to have a tax cut, let's have a tax cut to 
stimulate the economy. But let's focus it on families who really need 
the money. Many families who will receive $300 or $600 really need the 
money.
  When you look at the Bush tax cut, it isn't a tax cut that is 
directed toward working families or those who are struggling to make 
ends meet. It is a tax cut where 40 percent of the benefits go to 
people making over $300,000 a year.
  I find it incredible that the President and his friends in Congress 
believe that people making over $300,000 a year desperately need a tax 
cut. In fact, they get 40 percent of all the tax breaks. That is what 
the Bush tax plan proposed.
  As individuals receive $300 with this tax cut, keep in mind that if 
your income is over $1 million a year you will receive a $300 tax cut 
check every other day under the Bush tax cut plan. That is the 
unfairness of this.
  For us to really put ourselves on the line and to imperil our 
economic future by enacting a tax cut based on economic assumptions 
that have already proven to be wrong because we didn't pay down the 
national debt as we should have when we had the chance to do it but 
instead declared a bank holiday with $300 checks for everybody is where 
we missed the boat.
  It is not popular to say pay down the national debt. People do not 
rise, cheer, applaud, and say they really love that Senator who wants 
to pay down the debt. No. As you go down the parade route, they say: 
Cut my taxes. I heard it before the July break, and I have heard it as 
long as I have been in this business.
  What is the responsible thing to do for this country? As we see now, 
it isn't enacting the Bush budget, which has us this year already 
raiding the Medicare trust fund to pay for the tax cut and soon to be 
raiding the Social Security trust fund to do the same.
  What else is at risk? Secretary of Defense Donald Rumsfeld, who has 
been doing a review of the Department of Defense, has said we need to 
make some significant changes in the way we defend our country. All of 
us, I hope, agree that is our highest single priority--the common 
defense of America. Yet when Secretary Rumsfeld is put on the spot, 
when people ask, How will you pay for this, he is at a loss. He can't 
answer it. The money has already been spent. The money has been spent 
on a tax cut projected for the next 10 years.
  I think that is shortsighted. Instead of focusing on paying down the 
national debt and on the defense of America as our highest priority, we 
have decided that a tax cut primarily for the wealthiest people in 
America is a much higher priority.
  I don't think history is going to judge us well for that. The men and 
women in uniform who put their lives on the line for the country expect 
us to do the very best we can for them. They expect that equipment 
works. They expect to be well armed and trained so they can defend 
America and its interests.
  For us to have to shortchange that or cut back on that because of 
this Bush budget and tax cut I don't think makes much sense.
  Let me add another thing. If you ask American families, What is the 
highest priority issue in your life that you think the Government can 
deal with time and again, whether it is a State poll or a Federal poll 
or a local poll, the answer always comes back: education. The answer is 
education. People believe education is really what America is all 
about. That has been our ladder of opportunity in this country.
  The President came forward with a bipartisan education bill supported 
by Democrats and Republicans. I supported it, too. I thought it was a 
good piece of legislation. I might have made some changes here and 
there, but on balance I thought it really moved us in the right 
direction. It said for the first time in a long time that the 
President's party was committed to investing in education.
  It wasn't that long ago that the President's party and its party 
platform wanted to eliminate the Department of Education in Washington. 
They said this is a State and local issue; it shouldn't be Federal. 
They

[[Page 14403]]

have changed. Thank goodness they have. I think it is a wise course 
they have taken now--to say that the Federal Government should make 
strategic investments in education for the good of our country.
  That is what the bill said--include accountability for teachers and 
tests for students. It included a lot of incentives to deal with 
afterschool programs and to improve the quality-of-reading programs, 
mathematics and science programs. These are all great ideas and great 
investments. But the sad news is, because of the Bush budget, the money 
is not going to be there to invest in education. We will pass 
legislation saying this is a good thing to do. We will authorize it. We 
will approve it as a concept. But when it comes to appropriating the 
money and actually spending the money, we are going to find that it is 
not there. That is the difficulty, too.
  Again, as we receive these tax cut checks in the mail, we have to put 
it in perspective. Life is a tradeoff. Politics is a tradeoff. In this 
tradeoff, we have decided that a tax cut plan by President Bush that is 
primarily loaded for the rich is far more important than paying down 
the national debt, improving America's national defense, and investing 
in education. In the long run, I think that is going to be viewed as 
very shortsighted. I think we should have been more careful and more 
prudent in the approach that we took.
  When you look at the long-term outlook for the amount of money that 
will be taken from the Social Security trust fund and the Medicare 
trust fund, next year we will have to raid the Social Security trust 
fund by some $24 billion and the Medicare trust fund by $38 billion. 
That means people who are paying payroll taxes today to sustain today's 
Social Security retirees have to understand that the trust fund they 
are counting on to be there when they retire is going to be diminished 
because of the Bush budget and because of the Bush tax plan. This is 
something that is a reality. It is a reality that we have to face in 
Congress. It is not one we are happy to face but one we must face.
  Let me also say that when it comes to other economic assumptions in 
the President's budget, there are some real weaknesses, too. The 
President's budget did not include appropriate contingencies for 
natural disasters. I hope there will never be another one. I know there 
will be. When there is a disaster, we will rise to the occasion--
whether it is a flood in Illinois or a hurricane or a tornado. All of 
these things cause problems, and the Federal Government rallies to help 
families solve them. It costs money. The Bush budget, sadly, does not 
have enough money for that help.
  Tax extenders are programs such as investment in research for 
corporations that come up with new and innovative and creative 
products. These need to be reextended. They cost money. The Bush budget 
didn't provide that.
  The alternative minimum tax, which was established to try to catch 
the high rollers who might escape some tax liability, has really been 
ignored, and it should not be. Yet the Bush budget does not take into 
account that is something that obviously has to be done or we will end 
up penalizing middle-income families who thought they were receiving a 
tax cut, on the one hand, from the President and, on the other hand, 
get nailed with the alternative minimum tax.
  So what we have here, sadly, is a budget proposed by the President 
that already has us raiding the Medicare and Social Security trust 
funds that already imperils our ability to deal with priorities, such 
as national defense and education and paying down the national debt.
  I see my colleague from Minnesota is in the Chamber.

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