[Congressional Record (Bound Edition), Volume 147 (2001), Part 16]
[Extensions of Remarks]
[Page 22790]
[From the U.S. Government Publishing Office, www.gpo.gov]



            NOBEL LAUREATES ENDORSE GENUINE STIMULUS PACKAGE

                                 ______
                                 

                           HON. GEORGE MILLER

                             of california

                    in the house of representatives

                      Thursday, November 15, 2001

  Mr. GEORGE MILLER of California. Mr. Speaker, nine Nobel laureates in 
economics as well as other leading economists have issued an appeal to 
the leaders of the Senate to reject the cynical and ineffective 
stimulus approach taken by the House of Representatives and instead 
pass a bill that will generate greater spending now through expanded 
unemployment benefits and other initiatives.
  The need for expanded benefits for jobless Americans and their 
families is apparent to all but the leaders of the House of 
Representatives. The October increase in unemployment was the largest 
in over two decades, adding more than a half million jobless to the 1.1 
million jobs already lost this year prior to the terrible events of 
September 11th.
  The so-called stimulus bill passed recently by the House of 
Representatives lavished billions of dollars on the wealthiest of 
Americans--the same fortunate few who enjoyed most of the tax cut 
passed earlier this year. But the House offered only crumbs to the 
hundreds of thousands who have lost their jobs and whose families are 
on the brink of economic catastrophe.
  The criticism of that House stimulus bill was by no means partisan in 
nature. This is a bill that, in the words of the Wall Street Journal's 
November 1 editorial, ``mainly padded corporate bottom lines.'' No less 
a conservative stalwart than Kevin Phillips compared the House-passed 
bill to ``war profiteering'' passed ``in the phony name of economic 
stimulus . . . Over three-quarters of the hundred billion [dollars 
cost] goes for business and upper income objectives . . . The only real 
solution is a public outcry, tens of millions of pointing finger and 
voices saying, `Shame!' '' And that's just the conservative critique of 
the bill this Republican House of Representatives voted that provides 
$2.3 billion to Ford Motor Company, $1.4 billion to IBM, $830 million 
to General Motors, and $671 million for General Electric.
  But under the Republican bill, Larry Johnson won't get a dime. Larry 
Johnson doesn't work in the corporate boardroom. He cleaned the bar and 
polished the floors at the World Trade Center, and now he's out of a 
job and denied unemployment benefits by New York.
  There are hundreds of thousands of Larry Johnsons, and something is 
very wrong here. While 97 percent of employers pay into the 
unemployment funds, less than 40 percent of workers nationally receive 
unemployment assistance, a substantial drop over the past 25 years. And 
in some states, the percent that qualify is much lower than that. 
Workers in the new economy--younger, immigrant, part time, lower-
income, short-term--are especially hurt by inadequate UI coverage. And 
economists are predicting another 1.5 million could lose their jobs in 
the next 9 months. Even for those who do qualify, benefit levels are 
often below the poverty line, leaving millions of suddenly unemployed 
Americans facing poverty, joblessness and homelessness.
  The Republican response to this crisis has been the misguided 
antidote of Herbert Hoover: help the rich and the poor will benefit 
from the improving economy. Prosperity is right around the corner. But 
we were not elected to ignore the suffering of our constituents.
  When will the Congress hear the voices of our desperate countrymen 
and women and demonstrate its concern for the real victims of this 
recession? First, the House passed a $1.4 trillion tax cut, mainly for 
the wealthy. Then a $38 billion bail-out for the oil, gas, electric and 
nuclear power companies that earned more than $1.6 trillion last year. 
Now, a ``stimulus'' bill that showers tens of billions more on the 
wealthiest and most powerful in our nation, and only a fraction for 
genuine ``stimulus.''
  The views of these Nobel laureates and others should guide us in 
crafting a genuine stimulus bill that helps hurting Americans instead 
of adding billions in additional tax breaks for the richest taxpayers 
and for corporations. I submit for the Record these views.

Economists' Statement--An Open Letter to Senators Tom Daschle and Trent 
                                  Lott

       The current state of the U.S. economy justifies further 
     fiscal stimulus by the federal government. But the stimulus 
     package passed by the House of Representatives will do little 
     to assist a near term recovery and is likely to undermine 
     growth in the long term.
       The basic principles in designing an economic stimulus are: 
     (1) that it be targeted to increase spending immediately; and 
     (2) that it be temporary, phasing out when the economy 
     recovers.
       The bill passed by the House fails on both counts. First, 
     it mainly provides permanent tax cuts rather than the 
     temporary measures required by prudent fiscal policy. Second, 
     most of the benefits go to the wealthy and to large 
     corporations.
       In addition to being inequitable, tax cuts for the wealthy 
     are less likely to be spent quickly than are benefits to low-
     income families and the recently unemployed. The tax cuts for 
     large corporations are particularly inappropriate. Large 
     retroactive rebates to a few giant companies will do little 
     to stimulate an economy suffering from insufficient demand. 
     Moreover, the permanent nature of these tax cuts is likely to 
     worsen the long-term budget outlook and may keep long-term 
     interest rates high.
       The package passed by the House should be rejected by the 
     Senate and replaced with temporary measures, such as further 
     expanded unemployment benefits, that will increase spending 
     now.
         George A. Akerlof, University of California, Berkeley; 
           Kenneth J. Arrow, Stanford University; Martin N. Baily, 
           Institute for International Economics; Alan Blinder, 
           Princeton University; Jeff Faux, Economic Policy 
           Institute; Lawrence R. Klein, University of 
           Pennsylvania; Franco Modigliani, Massachusetts 
           Institute of Technology; Douglass C. North, Washington 
           University; William F. Sharpe, Stanford University; 
           Robert M. Solow, Massachusetts Institute of Technology; 
           Joseph E. Stiglitz, Columbia University; James Tobin, 
           Yale University; Laura D'Andrea Tyson, University of 
           California, Berkeley; Janet Yellen, University of 
           California, Berkeley.

           

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