[Congressional Record (Bound Edition), Volume 147 (2001), Part 16]
[Senate]
[Pages 22446-22449]
[From the U.S. Government Publishing Office, www.gpo.gov]



                ECONOMIC RECOVERY AND HOMELAND SECURITY

  Mr. DASCHLE. Mr. President, 5 months ago, America had a projected 
budget surplus of $2.7 trillion over the next 10 years. The stock 
market was soaring. The question before us was one that most leaders 
could only dream of: ``What should we do with our prosperity?''
  At that time, the debate was focused on tax cuts--how much, for whom, 
and could we also provide for America's unmet needs? Regardless of 
one's view about that debate or its outcome, there can be no doubt that 
this is a very different moment.
  Two months ago, more than 6,000 innocent men and women lost their 
lives to terrorism. In the weeks since, a wave of anthrax attacks has 
taken lives, closed offices, and sown fear.
  Our President, rightfully, has assembled an international coalition 
to fight those who attacked us, and those who aided them. We are at 
war.
  The Federal Government is helping those areas destroyed and damaged 
by the attacks to rebuild. We passed legislation to keep our airlines 
flying, and to give our law enforcement the tools needed to fight 
terror.
  Our economy, which was already weakening before September 11, has 
continued to deteriorate.
  The question facing America is no longer, ``What should we do with 
our prosperity?'' The question now is, ``How do we protect our 
citizens, strengthen an ailing economy, and win this war against 
terrorism?''
  I believe history will judge this Congress by how well we answer that 
question.
  Shortly after September 11, I visited a call center in Rapid City, 
SD, that handles United Airlines' frequent flyer program. The 235 
people there were working hard--helping people get tickets and 
arranging travel in the chaotic days after September 11. It was a tough 
job, on the phone hour after hour, helping scared, angry, and confused 
callers. All they could do was to ask people to be patient and to be 
understanding.
  In the past couple of weeks, nearly 50 of those hard-working 
employees have lost their jobs. Like most hard-working people in 
America, these people don't expect or want the government to do 
anything for them that they can do for themselves. But now, due to no 
fault of their own--no lack of skill or ambition or work ethic--they 
are no longer working.
  They are not alone. More than 7 million Americans are out of work. 
Last month, the unemployment rate took its largest jump in 21 years. 
For too long, we have asked America's laid off workers to be patient 
and understanding. Too many Americans fear for their future. Because of 
what our nation has experienced in the last 2 months, they fear for 
their safety. We need an economic recovery plan that addresses both 
fears and offers real help.
  Today, Democrats are offering a plan that will help bring back 
America's economic prosperity and help workers who have lost their 
jobs. It is a plan that strengthens our homeland defense in the 
process. This is, simply, the right plan for the right time.
  In the weeks following the September 11 attacks, Democrats and 
Republicans in the Senate asked the experts, including Federal Reserve 
Chairman Alan Greenspan and former Treasury Secretary Robert Rubin: 
What are the most effective steps we can take to shore up our economy?
  Here is what they told us: Put money into the hands of low- and 
middle-income workers; they are the ones who will spend it quickly. 
Make sure that

[[Page 22447]]

workers who have lost their jobs receive unemployment benefits. And cut 
taxes for businesses--but limit the tax cuts to those that actually 
help create jobs.
  They told us that any plan to stimulate the economy should help 
people regain the sense of security they need to shop, travel, and 
invest.
  Finally, they said our plan must be affordable and temporary. After 
all, the baby boomers will start retiring in less than a decade, and we 
should not be taking on major long-term spending or revenue obligations 
that will make it even more difficult to meet our responsibilities to 
Social Security and Medicare.
  Our plan heeds that simple but sound advice. It includes unemployment 
insurance and health care for laid-off workers, tax cuts for 
individuals and businesses, and investments in our homeland security. 
It does all of these things in a way that is fiscally responsible and 
fundamentally fair. I would like to take a moment and outline the four 
key components of our plan.
  First, it provides unemployment insurance for laid-off workers.
  Providing unemployment insurance to laid-off workers isn't just the 
right thing to do. It's the smart thing to do. It puts money into the 
hands of people who are most likely to spend it immediately. As Robert 
Rubin has said, unemployment insurance is ``a near-perfect stimulus.''
  But more than half of unemployed workers are not covered under the 
current unemployment insurance system, even though they pay into it. 
Many of these are the part-time and temporary workers who often most 
need the help.
  And for those who are eligible for unemployment insurance, the 
benefits often do not last long enough. Next year, an estimated 5 
million Americans will use all 26 weeks of their benefits, and still be 
without a job.
  Our plan extends unemployment benefits an additional 13 weeks in all 
50 States; it expands coverage to millions of workers who are not 
covered under the current system.
  During the first Bush Administration, when we were facing a 
recession, Democrats and Republicans agreed to extend unemployment 
insurance--four times. We were able to agree that extending 
unemployment benefits was the right approach to an economic slowdown 
then, we should be able to agree that it is the right approach now.
  Second, we provide health coverage for workers.
  Democrats also believe that extending health coverage for laid-off 
workers and their families should be part of any real economic recovery 
package. The average cost of COBRA health coverage for a family is $588 
a month--half the monthly unemployment benefit.
  That is simply too much money for families hit by a layoff. As a 
result, only about 20 percent of dislocated workers who are eligible 
for COBRA coverage actually purchase it. Too often, when a head of a 
household is out of work, parents and children go without health 
insurance.
  That is wrong.
  We propose paying up to 75 percent of the cost of COBRA coverage, 
giving States the option to provide Medicaid coverage to those who 
aren't eligible for COBRA, and providing a temporary increase in the 
Medicaid payment rate for States, so that States will not have to cut 
Medicaid or raise taxes in order to keep their budgets balanced.
  Third, we provide tax cuts for families and for businesses that 
invest and create jobs.
  Most economists agree: to jump start the economy, individual tax cuts 
should put money quickly into the hands of middle- and low-income 
people--because they are the people who are mostly likely to spend it 
immediately.
  Our plan provides tax rebates for the 45 million low-income taxpayers 
who pay Federal payroll taxes but got little or no rebate at all last 
summer.
  Our plan also includes new business new tax cuts to encourage job 
creation and investment. In sum, these are tax cuts that will help Wall 
Street and Main Street.
  Fourth, we provide for strengthening homeland security.
  We can pass tax cut after tax cut. In the end, no tax cut--even the 
right tax cuts--will stimulate the economy if people are afraid to 
travel or go about their business.
  If we are serious about repairing damage to America's economy--and 
avoiding future terrorism-related financial disasters--we must 
strengthen America's homeland security so people can feel safer getting 
on a plane, going about their business, and living their lives.
  That is why our plan includes $15 billion for homeland defense. It 
will help protect Americans from threats such as the recent anthrax 
attacks that have so shaken our nation and our own offices, as well as 
other biological, chemical, and nuclear threats. It will strengthen our 
transportation security and help protect our food and water supply.
  All told, our plan costs $74 billion in the first year, and $84 
billion over 10 years. It is both effective and responsible, and we 
believe it is the right approach for America's economic recovery and 
future safety.
  Regrettably, Republicans have chosen to take a different approach.
  Many things, as I said, about America changed on Sept. 11. One thing 
that seemed to change--for the better--is the way Washington works. 
Democrats and Republicans in Congress have been working together, and 
Congress has been working well with White House.
  This unprecedented level of consultation and bipartisanship is what 
has, to date, allowed us to respond so quickly to the attacks and the 
ongoing terrorist threat.
  It was my hope that we would follow that same bipartisan approach on 
the subject of economic stimulus as well. Indeed, that is how the 
process began. Early on, Chairman Baucus led a bipartisan series of 
meetings with Senator Grassley, their House counterparts, outside 
experts, and the Administration.
  Unfortunately, Republican leaders in the House withdrew from that 
effort. Instead, they pushed through--on a party line vote--a bill that 
is not a recovery bill at all but merely another laundry list of tax 
cuts--just another page out of the Republican Party's pre-existing tax 
cut agenda.
  Although they masquerade as stimulus plans, no serious observer 
believes that the Republican proposals are anything of the kind.
  The centerpiece of the Senate Republican proposal is a plan to 
accelerate by 4 years the rate cuts in the $2 trillion tax cut enacted 
earlier this year.
  Speeding up the rate cuts would cost $121 billion over 10 years. That 
amounts to 69 percent of the total cost of their plan.
  And what would Americans get for their $121 billion? Most would get 
very little.
  But the top 1 percent of taxpayers--people making an average of $1.1 
million a year--would get an additional $16,000 tax cut next year. They 
would get additional tax cuts the year after that, and the year after 
that, and the year after that.
  In total, over the next 4 years, the Senate Republican plan would 
give a $52,000 tax cut bonus to every millionaire in America--the very 
people who are least likely to spend it and help the economy.
  America needs a plan that will help the economy now, not years from 
now. We need a plan that puts money in the hands of people who need it 
most, not the people who need it least.
  I have yet to understand how giving millionaires tens of thousands of 
dollars in additional tax breaks 3 and 4 years from now will stimulate 
the economy today.
  The second-largest part of the Senate Republican plan would spend $22 
billion to repeal the corporate alternative minimum tax, or AMT.
  The corporate AMT was enacted as part of the Tax Reform Act of 1986 
because certain corporations, using legions of tax lawyers, had become 
so clever at exploiting loopholes in the tax code that they were able 
to pay no taxes at all.
  So Congress said to those corporations: regardless of how many 
loopholes you can exploit, you must pay at least a minimum tax.

[[Page 22448]]

  Now Republicans want to do away with the minimum tax, forever. How 
will returning to the days when certain profitable corporations paid no 
taxes at all stimulate our economy now?
  Small businesses create most of the new jobs in America, and most of 
them are not incorporated. So they won't get a penny from repealing the 
corporate AMT.
  If this proposal does not seem fair or stimulative, that is because 
it is not.
  What is perhaps even more troubling about the Republican approach is 
what it fails to address.
  The Republican plan provides next to nothing for workers who have 
lost their jobs. And it provides nothing at all for homeland security.
  When you read their plan for the first time, you assume it is missing 
a page. Not a dime for bioterrorism preparedness? Not a nickel for food 
safety or for security at our nuclear plants? Can this really be a plan 
to restore confidence and stimulate the economy?
  Evidently, these items weren't omitted because of cost concerns. 
Quite the contrary. The Republican plan is more than twice the size of 
our plan. And the exploding price tag of the Senate Republican plan--
$175 billion over 10 years--may not even account for its true cost.
  It will not make America safer. It will not help the economy. In 
fact, it may do real economic harm by driving up long-term interest 
rates.
  Now, if the Republican plan sounds familiar, that is because it is. 
It is a collection of leftover tax breaks that our friends on the other 
side of the aisle weren't able to pass last spring.
  Reading their plan, it's as though September 11 never happened. They 
have re-labeled these tax breaks as, ``stimulus,'' but they are really 
just more of the same pre-September 11 tax cut agenda that we have 
heard our Republican colleagues talk about for months, if not years.
  Tax cuts for wealthy Americans and profitable businesses do not solve 
every problem--and they will not solve this one.
  The Republican plan is not about getting the most stimulus per dollar 
spent. It is not about getting help to those who most need it. It is 
not about strengthening our national security. It is about ideology.
  It is about seizing on a moment of crisis in order to advance 
unrelated political goals. It is driven by a conservative Republican 
orthodoxy that is so rigid, and so myopic, that it cannot or will not 
see what is obvious to every fair-minded observer: this is the wrong 
plan for America, especially at this moment in our history.
  I will say one thing for this approach: it has managed to achieve a 
degree of unanimity. It has been unanimously rejected by economists, 
Governors, State legislators, editorial writers, and business leaders.
  Two weeks ago, Senator Lott and I received a letter from the National 
Governors' Association, signed by its Chairman, Governor John Engler, 
Republican of Michigan, and its Vice-chairman, Governor Paul Patton, 
Democrat of Kentucky. The NGA is a majority Republican group that 
represents all of America's governors--29 Republicans and 19 Democrats, 
and 2 Independents.
  The Governors asked us, as we consider economic stimulus, to ``help 
protect health and human services for vulnerable Americans, address 
employment and training for dislocated workers, and stimulate the 
national economy through targeted capital investment.''
  Interestingly, they make no mention of huge new tax breaks for 
profitable corporations. No mention of huge new tax breaks for the 
wealthiest Americans.
  Republican leaders got this letter. Sadly, I don't think they got the 
message.
  Mr. President, I ask unanimous consent that this letter be printed in 
the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                               National Governors Association,

                                 Washington, DC, October 25, 2001.
     Hon. Thomas A. Daschle,
     Majority Leader, U.S. Senate,
     Washington, DC.
     Hon. Trent Lott,
     Minority Leader, U.S. Senate,
     Washington, DC
       Dear Senator Daschle and Senator Lott: The nation's 
     Governors appreciate the bipartisan efforts of Congress to 
     develop an economic stimulus package. On October 4, we sent 
     you a list of policy options to consider in developing your 
     final plan. We are updating our recommendations to reflect 
     the recently clarified size and focus of the options you are 
     considering. Our recommendations also reflect the further 
     deterioration of states' fiscal positions as detailed in the 
     ``economy.com'' report sent to your earlier this week.
       With respect to our fiscal position, most states have made 
     a series of spending cuts. Many are now implementing a second 
     round and in some cases a third. A number of states now have 
     revenue shortfalls in excess of $1 billion and many are 
     scheduling special legislative sessions to address mounting 
     fiscal problems. The cumulative states' current revenue 
     shortfall is $10 billion and growing. Moreover, new and 
     unprecedented state responsibilities for homeland security 
     are exacerbating serious fiscal conditions.
       The House economic stimulus bill, if enacted, would further 
     educe state revenues by at least $5 billion annually. This 
     revenue reduction would dramatically increase existing state 
     shortfalls and result in significant state budget cuts. These 
     cuts, in turn, would hamper the effectiveness of any federal 
     stimulus package. Similarly, absent any changes in the Health 
     Insurance Portability and Accountability Act (HIPAA) or new 
     federal funding for HIPAA implementation in state-
     administered programs, states will have little choice but to 
     divert scarce funds to comply with this federal mandate. This 
     means that significantly less state funds will be available 
     of reduction, critical state services, capital investment, 
     infrastructure improvement, and additional efforts to respond 
     to bioterrorism and other threats to homeland security.
       Specifically, the Governors offer the following 
     recommendations to Congress in the attached documents to help 
     protect health and human services of vulnerable Americans, 
     address employment and training for dislocated workers, and 
     stimulate the national economy through targeted capital 
     investment.
       Congress has many difficult tasks to complete before 
     recessing for the year. As a bipartisan group of government 
     leaders, the Governors look forward to working with you.
           Sincerely,
     John Engler,
                                                         Chairman.
     Paul E. Patton,
                                                    Vice Chairman.

                  Protections for Vulnerable Americans

       Temporary Increase in Medicaid FMAP for children and 
     Families.--Congress should temporarily increase the federal 
     medical assistance percentage (FMAP) in Medicaid by 10 
     percent for acute care services for families and children. 
     The territories should receive comparable relief. This will 
     lessen the pressure on states and territories to cut Medicaid 
     health care benefits or reduce the number of people served.
       Medicaid FMAP Hold Harmless Provision.--Congress should 
     provide a ``hold harmless'' provision for states that were 
     scheduled to have their Medicaid FMAP reduced for fiscal 
     2002. These reduced rates were based on outdated per capita 
     income data collected at a time when state and federal 
     economics were in much better health.
       TANF Supplemental.--The Governors continue to urge Congress 
     to approve a one-year extension of supplemental grants under 
     the Temporary Assistance to Needy Families program (TANF). 
     Without an extension of the TANF supplemental grants this 
     year, 17 states will face a substantial cut in funding for 
     programs that assist families in moving from welfare to work.
       Health Care for Dislocated Workers.--As Congress considers 
     proposals to assist dislocated workers in gaining access to 
     health insurance, Congress must recognize that states will 
     not have available funds for any new matching requirements or 
     options.

             Employment and Training for Dislocated Workers

       Expansion of Eligibility for Unemployment Benefits.--By 
     temporarily modifying existing Disaster Unemployment 
     Assistance (DUA) eligibility requirements, the DUA program 
     (already in operation or on ready standby in all states) 
     could be used only to provide Unemployment Insurance (UI) 
     equivalent benefits to individuals affected by declared 
     disasters, but also to those affected by resulting economic 
     contraction. These UI-equivalent benefits would be 
     particularly beneficial for those who do not qualify for UI 
     benefits due to insufficient duration of employment or level 
     of earnings.
       Extension of Unemployment Benefits.--Congress also should 
     temporarily extend the duration of regular UI benefits 
     through 100 percent federal funding to ensure that unemployed 
     workers can secure employment prior to the termination of UI 
     benefits.
       Acceleration of Reed Act Distributions.--Congress should 
     accelerate distribution to state accounts of excess funds (as 
     defined by the Reed Act) being held in the Federal 
     Unemployment Trust Fund. This could be

[[Page 22449]]

     achieved by retaining the 0.25 percent ceiling on the Federal 
     Unemployment Account. The immediate transfer of an estimated 
     $9.3 billion can be used by states only for providing UI 
     benefits, employment services, and program administration.
       Increase Funding for Dislocated Workers Employment and Job 
     Training Services.--Fiscal 2001 funds for this Workforce 
     Investment Act (WIA) programs were rescinded by $177.5 
     million, while the President's proposed fiscal 2002 budget 
     requests a reduction of $207 million. Congress should restore 
     these funds.

            Stimulate the Economy Through Capital Investment

       State Match.--Temporarily reduce or eliminate state match 
     requirements for capital investment programs.
       Federal Investment.--Increase federal funding for 
     infrastructure investment critical to homeland security.
       Private Activity Volume Cap.--Lift the private activity 
     volume cap, which would accelerate housing and economic 
     development construction activities.

  Mr. DASCHLE. Mr. President, there is another important point that 
must be made today. Five months ago, when we last considered a huge tax 
cut that mostly benefitted the wealthiest Americans, the money to pay 
for it was to come from the non-Social Security surplus.
  Today those surpluses are gone. So whatever is spent on this stimulus 
package will, at least over the next 5 years, come mainly out of Social 
Security and Medicare funds. We may even return to deficit spending, if 
we are not careful. That is why we must be even more prudent, and more 
vigilant, about what is included in this economic recovery package.
  The Democratic plan has a one-year cost of $74 billion. Over 10 
years, its cost increases to $84 billion. As I said, the Republican 
plan costs $89 billion in 2002. Over 10 years, it explodes to $175 
billion--and it runs the risk of damaging our long-term economic 
health.
  Their plan costs more but does less for our economy, less for laid 
off workers, and nothing for homeland security.
  I hope every Senator will ask himself or herself a simple question: 
Would my constituents want their Social Security and Medicare money to 
be spent on this proposal?
  Democrats have tried to write our package with this concern in mind. 
We think the American people want us to invest in bioterrorism 
preparedness, for example.
  But would Americans want their Social Security payroll tax money 
spent on new tax cuts for the wealthy or on huge permanent new tax 
breaks for profitable corporations? I don't think so.
  In fact, it seems especially unjust when you consider that Americans 
at the lower end of the income scale pay payroll taxes on every dollar 
of their income. Meanwhile, wealthy Americans pay zero in Social 
Security payroll taxes on all income above $80,000.
  In other words, the Republican plan would spend the hard-earned 
Social Security payroll tax dollars of ordinary workers at the bottom 
and use them to pay for tax cuts for corporations and people at the 
top.
  We have been told that Senate Republicans will attempt to raise a 
budget point of order against this bill.
  Let me make clear what that means. A budget point of order is a 
procedural technicality aimed at killing this bill by saying that what 
our nation is now facing is not an emergency.
  A vote for this procedural motion is a vote to kill unemployment 
insurance for laid off workers.
  It is a vote to kill health care for struggling families.
  It is a vote to kill tax cuts for businesses that create jobs and for 
people who did not get a rebate in the last round.
  It is a vote to kill funding to build our national pharmaceutical 
stockpile, security at our nuclear power plants, protections for our 
bridges, tunnels, and ports, and the safety of our food and water 
supply.
  This is a vote to kill all of these items by saying that this is not 
an emergency.
  Thousands of people have lost their lives. Millions of people are out 
of work. We are at war abroad, and we are facing threats to our safety 
here at home.
  If that's not an emergency, I don't know what is.
  There is still time for us to come together and pass an economic 
recovery plan that will work for the nation.
  In the days since September 11, we have seen more clearly than ever 
that we are indeed one nation, indivisible.
  The victims of those attacks were from all races and ethnicities, all 
segments of society.
  The heroes who came to their aid didn't ask, What's in it for me?
  As we look to lift up the economy for all Americans, the most 
fortunate among us should not be asking what's in it for them.
  Those workers I met in Rapid City aren't looking to us to solve all 
of their problems. They are just looking for a little help to get 
through one of the most difficult times of their lives.
  It may be difficult for us to reach agreement, but for them--and for 
our nation--it is vitally important that we do so.
  I strongly believe that with every challenge comes an opportunity, 
and right now we have an opportunity to help those who are hurting, 
lift our economy, and secure our Nation.
  We will be judged on whether we seize it.
  I hope and pray that we will.
  I yield the floor.

                          ____________________