[Congressional Record (Bound Edition), Volume 147 (2001), Part 16]
[Senate]
[Pages 22450-22452]
[From the U.S. Government Publishing Office, www.gpo.gov]



                           ECONOMIC STIMULUS

  Mr. BUNNING. Mr. President, I rise in support of a strong economic 
stimulus package to help create jobs and to kick-start our economy. 
Right now, I don't think there is a doubt in anyone's mind that we have 
fallen into a recession.
  Consumer confidence is down. Layoffs are up. Economic activity has 
slowed dramatically. After years of economic good times, we are 
skidding into a sharp downturn.
  Before the horrific terrorist attacks on September 11, our economy 
was already teetering on the brink. But that day sent us over the edge. 
In the third quarter, gross domestic product ended up actually 
shrinking by an estimated four-tenths of 1 percent. When the revised 
figures come out, I am afraid that number will fall even further down, 
maybe a full percentage point.
  I think there is a chance that the fourth quarter could be worse and 
we could see GDP contraction of minus 2 or 3 percentage points, plus 
unemployment rising from 5.4 percent--which it is now--to well over 6 
percent. In other words we have hit the wall.
  Now we have to ask: What is the best way to get America moving again. 
That is the issue confronting the Senate. Do we try to cut taxes and 
provide for efficient, long-term growth that will create jobs or do we 
go for more Federal spending and a short-term approach, as the majority 
leader suggested?
  To make things worse, September 11 compounded our problems. It made 
consumers more nervous and investors more anxious. It pushed a number 
of vital industries--airlines and transportation, investment companies, 
and tourism--to the edge of the cliff, and some over the edge.
  Congress has already acted quickly to help the airlines and to shore 
up parts of our economy that were badly wounded by September 11. Now we 
need to figure out what we can do to set consumers' and investors' 
minds at ease and to help convince them that even though we are at war, 
it is time to get going with our lives and our business.
  I believe that we must act quickly, but we must act correctly. The 
wrong economic package could make things worse.
  The best way I know to create jobs is to provide incentives to 
business to grow and to expand. And the best way I know to convince 
business to get moving is taking in the language they understand: 
dollars and cents. The dollars and cents that every businessman and 
businesswoman in America knows best is taxes.
  We need to cut taxes on business now, and not just nickel and dime 
stuff. We need real tax reductions that will have a broad impact across 
the economy and send a signal to the entire business community that 
Washington understands their problems and is going to do everything 
possible to help.
  It is not time to pick or choose with help for just a few industries. 
Our whole economy is hurting, and we need general relief across the 
board.
  I know that every time we have this debate the opponents of tax cuts, 
like our majority leader, shake their fists and point their fingers and 
cry out that tax cuts only benefit the rich. After awhile, they start 
to sound like a broken record. What the opponents of tax cuts in an 
economic jobs package need to understand is that these tax cuts are for 
businesses--and not corporate executives. No one seriously thinks and 
talks about helping rich people and hurting poor people.
  The question is how we can best act to spur business right now to 
create real, long-term, permanent jobs. We have all heard from our 
people back home--the experts who are out there everyday trying to brow 
their businesses and to expand their companies--about the real, broad-
based tax cuts that can make a difference.
  We need to cut corporate AMT taxes, the punitive tax goes out of its 
way to punish enterprising employers, particularly those who are losing 
their shirt in this economy. Companies need better expensing rules and 
accelerated depreciation schedules so they can write off costs faster 
and free up their capital for investment and more job creation. And we 
need to slash capital gains taxes so that money can flow more quickly 
to businesses that are ready to invest and spend now.
  I don't think anyone in this body really believes that by trying to 
cut business taxes and create jobs we are really helping rich people. 
The American people don't buy those class warfare arguments, and they 
are a lot smarter than many in Congress give them credit. There is a 
world of business between cutting taxes on rich individuals and cutting 
taxes on business that create jobs and help families put food on their 
table. There is nothing better than giving a job to somebody who really 
wants to work.
  As our economy grew over the past decade, as middle-class Americans 
invested in the market and watched their savings grow, more and more we 
came to understand that what is good for business in America is good 
for the American people and the American worker. In the past, when the 
economy took a turn for the worse, Congress too often took the easy way 
out. Instead of pushing for tax reductions and promoting growth, we 
went for the public checkbook and tried to buy our way out of recession 
with more Government spending. But considering how quickly our budget 
surplus is shrinking. It doesn't make any sense to write checks that 
the Treasury might not be able to pay without going into debt once 
again.
  More than anything else, we must not return to the bad old days of 
Federal deficits and stagnant growth. It may feel good for Congress to 
pass more spending as a gesture to show ``we care,'' but everyone knows 
that in the long-run the Government doesn't create jobs--business 
does--and caring means we have a job for anyone who wants to work.
  More spending might help for a little bit, but I worry that it would 
just be a band-aid approach when our economy needs serious, long-term 
treatment. Extra spending on public works is sometimes necessary, but 
it is not a long-term solution to our economic problem. It is only a 
temporary fix.
  And no one has ever accused Government spending, and money for 
projects funded through Government programs, of getting into the 
economy faster than tax cuts that would right now put money into the 
hands of private entrepreneurs.
  In short, Mr. President, the best way to get our economy back on 
track is to cut taxes.
  Reducing taxes frees capital. It lets business react swiftly to 
market conditions and to make crucial decisions quickly. And it affects 
the bottom line right now.
  I do not think I am plowing any new ground here.
  We have heard a lot of these arguments before. But I can't remember a 
time when the debate was as important as it is now.
  We are at war. Our economy needs help. It is time to act now and to 
act swiftly.
  I urge my colleagues to pass an economic jobs bill now, one that 
really does what it's meant to do--create jobs.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, I understand that later in the day a point 
of order will be made against the bill under section 205 of the 
concurrent resolution on the budget for fiscal year 2001. The essence 
of the point of order will be to challenge the emergency designation 
contained in section 908 of the bill.
  I am not sure whether that is the correct ruling. It is debatable. 
But my expectation is the Parliamentarian will

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rule that the bill is subject to the Budget Act for that reason.
  My view, however, is that the point of order should be waived. Why? 
Because the bill clearly responds to an emergency. Indeed, my good 
friend from Kentucky just said: We are at war. He said: Let's get 
moving now. Let's pass a good stimulus bill.
  I don't want to put words in the mouth of my friend from Kentucky, 
but certainly he believes--and the rest of the Members of this body 
believe--that there is a very great need for us to act extremely 
quickly. We also know that many people are in very difficult straits, 
not to mention the huge tragedy of the thousands of people who were 
killed in the trade towers which were destroyed, the Pentagon 
destruction, the anthrax scares, other terrorism scares in the country. 
We need to move quickly. If that is not an emergency, I am hard pressed 
to say what is. There may be other emergencies that are even greater. I 
will not dispute that point. But this clearly is an emergency, too. 
These are not ordinary times. We are in a different era. It is very 
difficult.
  Let me provide a bit of information. When legislation is considered 
in the Senate, there are very strict rules to enforce budgetary 
discipline, as there should be. The embodiment of these rules is the 
annual budget resolution which is debated every spring. We have updates 
and so forth, but essentially we have a long debate on the budget 
resolution. The debate allows the Congress to look at all of its 
needs--taxes and spending--and construct a budget blueprint for the 
coming year. It is a guess, an anticipation, an estimate of what we 
will need for the coming year.
  The budget resolution sets a floor for revenues and ceilings for 
spending. And there are points of order that can be made against any 
legislation which reduces the revenues below the floor or increases 
spending above one of the ceilings.
  These points of order can only be waived with 60 votes. That is how 
the budget resolution is enforced. But, wisely, there is a safety 
valve. We cannot with certainty predict the future. Thank goodness. If 
Congress and the President agree that there is an unforeseen emergency 
that requires legislation that cuts taxes or raises spending, then 
there is a safety valve for getting the legislation enacted.
  The safety valve is simple. Congress must include language in the 
legislation which designates that the legislation is being enacted to 
cope with an emergency. Then the points of order enforcing the revenue 
floor and spending ceilings become inoperative.
  That makes sense. In an emergency, for the good of the country, we 
may need to respond in a way that was not contemplated when we wrote 
the budget resolution. But there is one final hurdle to face. In the 
Senate, the language in the bill that designates the legislation as an 
emergency is itself subject to a point of order. If the point of order 
is raised and there are not 60 votes to waive it, then the language 
designating the legislation as an emergency is deleted from the bill.
  This is very serious because without the emergency designation in the 
bill, the entire bill would be subject to a point of order that can 
only be waived by 60 votes. In that case, the entire bill can be killed 
with the votes of only 41 Senators. So it is important to keep the 
emergency designation in the legislation.
  Having presented the background, let me explain how the budget 
process unfolded this year. The budget resolution for this year, fiscal 
year 2002, was considered in the spring, many months ago. It was passed 
in early May. We voted on it in this body. At that time the economy was 
not too strong, but it did not appear to be facing an emergency. The 
economy had grown at a rate of 1.9 percent in the fourth quarter of the 
previous year, calendar year 2000. It grew at a slower rate, 1.2 
percent, in the first quarter of 2001. These are somewhat weak growth 
rates, but they are not terrible ones.
  Manufacturing was hurting. May was the 10th consecutive month of job 
loss in manufacturing, but the national unemployment rate was still 
only 4.2 percent. American consumers were not in a downturn. Retail 
sales had grown at a 5.2-percent rate in the first quarter of this year 
and were continuing to grow at the same rate, 5.2 percent, in the 
second quarter this year.
  So the view at the time, at the time the budget resolution was 
passed, was that the economy needed a boost in fiscal year 2001, which 
ended on October 1, but the economy should be doing nicely as we 
progressed through the first two quarters of fiscal year 2002. It 
needed a short-term boost. But most of us thought--the economists 
thought, most people who spend their lives thinking about these things 
thought--that in the first two quarters of next year, January through 
the end of June, we would be doing a little better.
  The budget resolution that we passed last May made room for an $85 
billion tax cut during the remainder of fiscal year 2001. This meant 
there were no 60-vote points of order that could be raised against a 
bill containing an $85 billion tax cut in that fiscal year.
  In contrast, the budget resolution made room for a smaller stimulus 
in fiscal year 2002 because there was an expectation that we would not 
need as much. It allowed approximately $50 billion for tax cuts in 
fiscal year 2002 as part of the President's 10-year tax cut plan. That 
was part of the deal, part of the understanding. That is what the 
expectations were.
  It allowed an additional stimulative tax cut of $15 billion in fiscal 
year 2002, but the $65 billion total was smaller than the $85 billion 
allowed for fiscal year 2001 because it was judged that more than that 
was not needed, and that was because no one expected the economy to be 
really weak in fiscal year 2002.
  That was then. This is now. Unfortunately, as we moved through the 
summer into September, there was a surprise. The economy became much 
weaker than anyone had predicted. Manufacturing continued to lose jobs. 
By the end of August, manufacturing had lost jobs for 13 consecutive 
months.
  Real GDP growth was almost zero in the second calendar quarter of 
this year. Many taxpayers were saving part or all of their tax rebates 
that went out last summer rather than spending them. They are starting 
to tighten up, getting more nervous, fearful, not spending, and that 
clearly means a weaker economy.
  The Federal Reserve was still cutting interest rates, but that seemed 
like it might not be enough to turn the economy around. And then 
disaster struck. It is not necessary to recount the horrors of 
September 11, but it is important to talk about what the events of 
September 11 did to the economy. Here are some of the main results:
  Airline travel declined precipitously. Airlines laid off thousands of 
employees post-September 11. Industries that depend on air travel--such 
as hotels and car rentals--also declined precipitously. They dropped 
off. Business confidence was shaken. Businesses cut back on investments 
even more than they had been doing. Consumer confidence began to drop 
precipitously, threatening consumer spending, which had been one bright 
spot in the economy.
  The results of all those blows to the economy became very clear when 
the unemployment figures for October were released early this month. 
Unemployment jumped from 4.9 percent to 5.4 percent. That is the 
largest jump in more than 20 years. Manufacturing fell to levels last 
seen in 1965.
  Now, non-manufacturing also took a hit. The slowdown in non-
manufacturing industries was the most dramatic since the inception of a 
key report by the National Association of Purchase Managers in 1997.
  Agriculture producers are hurting too. Net farm business income was 
at the year low in 1999 and 2000. Unless Government assistance is 
continued, net farm income in 2001 is projected to be even lower. The 
most acute problems are faced by farmers whose operations have been hit 
by floods, drought, tornadoes, and other natural disasters.
  So that is why we are here today. Clearly, our economy is in an 
emergency situation. It needs emergency help. Both parties agree that 
we need some combination of tax cuts and

[[Page 22452]]

spending increases right now to try to invigorate the economy. This is 
an important point. We are elected to serve our people, to make 
judgments--the best judgments on the best information that we have, 
given all the facts we can lay our hands on. We have to do it 
responsibly, with integrity, and we have to do it with due 
consideration and thoughtfulness.
  Remember, budget projections are merely estimates as to what the 
future will hold for us, even though we have virtually no idea of what, 
in fact, is going to be happening 2, 3, 4, 5 years from now. These 
budget estimates, prepared by the CBO and OMB, swing dramatically over 
very short periods of time--just little changes in projected inflation, 
growth, and unemployment have huge effects on the 10-year estimates. It 
is the best we can do given the information we have.
  Given all of that, I urge my colleagues not to be too hung up on 
technicalities, on provisions that are in the Budget Act. They are very 
good. Those provisions should be there, but we have to exercise our 
judgment as to whether those provisions should be enforced now or not.
  The world is watching us to see what we do in this situation--those 
businesspeople in the markets overseas. If we do too little, they are 
going to say America is not standing up.
  I think there is a fair expectation that our economy will continue to 
sink, or that it will not be picked up as much as it could. That is a 
point made by all the people I have talked to--economists and CEOs 
across the country--about what is the proper stimulus package. I urge 
us to exercise our independent judgment as the right thing to do.
  Mr. President, my time has about expired.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. BAUCUS. I thank the Chair.
  The PRESIDING OFFICER. The Senator from Texas is recognized for not 
to exceed 15 minutes.

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