[Congressional Record (Bound Edition), Volume 147 (2001), Part 17]
[Senate]
[Page 23633]
[From the U.S. Government Publishing Office, www.gpo.gov]



                        STIMULATING THE ECONOMY

  Mr. DOMENICI. Mr. President, first I say to the occupant of the 
chair, the junior Senator from New Jersey, when he came to the Senate 
he brought with him a rather distinguished career in investment 
banking, as I understand it, with a specialization in bonds. Whatever 
the case may be, he brought with him a tremendous expertise with 
reference to the American economy. Therefore, it makes me doubly proud 
that the idea many people suggested to me, that ends up being called a 
Social Security withholding tax holiday for 1 month, is supported by 
the occupant of the chair, because I give a lot of credit to somebody 
who comes to the Senate from the business world, talks with the 
business world, talks with labor union people and comes up with an 
analysis of what will, indeed, be the best economic stimulus of those 
that have been presented that could be adopted before Christmas and be 
effective, regardless of the arguments, during the next 4 to 5 months. 
It clearly could be in full effect.
  First, those who have supported me from the standpoint of business 
are in pretty good company. So whatever we hear from some, that this 
cannot be implemented and that maybe it is not a good idea, let me 
introduce a letter which I received on November 30. It is a very 
current letter. It is from the Business Roundtable. Now, the Business 
Roundtable has a lot of American business members. This letter comes 
from the president, John Castellani--good Italian American name. We had 
not spoken in advance of my amendment, but this letter, so everybody 
will know, is an unequivocal enforcement of the holiday as being the 
best economic stimulus and the best news to provide confidence in the 
American people and that will move the economy ahead in terms of what 
it needs to give it a jump start in these very difficult times.
  We all know we ought to do two big things. One, we ought to pay for 
all the military needs of our country in a very good appropriations 
bill. The President has told us what he needs. We need to do that. I 
understand it will be done next week. That is good.
  The other thing we have to do is pass a stimulus package. We do not 
have to pass a package that has a ``stimulus'' label on it. We have to 
pass one that could be sent out to the business community, to the 
others who know what is happening in the American marketplace, and ask 
them, will this actually stimulate the economy? Then we could say 
``stimulus,'' and those who know say it will stimulate. It is not a 
bill to meet a commitment.
  This letter ends up saying, because there are some who say it will 
take too long, I say to the occupant of the chair, to implement, that 
some express concern about the ability of companies as a practical 
matter to implement this on short notice. We have surveyed our 
companies to see how quickly the payroll reduction could be 
implemented. These companies, some of the Nation's largest employers, 
have said it would be implemented in a range of a couple of days to a 
maximum of 3 weeks if it is kept simple. We have some leeway as to how 
to implement that holiday.
  I ask unanimous consent that the letter be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                      The Business Roundtable,

                                Washington, DC, November 30, 2001.
     Hon. Pete V. Domenici,
     Ranking Member, Senate Budget Committee, U.S. Senate, 
         Washington, DC.
       Dear Senator Domenici: The Business Roundtable believes 
     that an economic stimulus is needed, and needed now. 
     Moreover, we believe the stimulus should focus on enhancing 
     consumer confidence and spending; that broad-based and 
     significant incentives are needed to spur business demand; 
     and both should be of a size and duration to change spending 
     behavior in the near term.
       To that end, the members of The Business Roundtable believe 
     two measures would work quickly and effectively to improve 
     cash flow and stimulate demand and productivity. First, we 
     recommend an immediate reduction in the payroll tax. This 
     action, more than any other proposal, will put money into the 
     hands of those who need it and will spend it. A payroll tax 
     reduction diversifies the stimulus on both the demand and 
     supply sides. It also focuses assistance on lower-income 
     individuals. Reducing both the employee and employer portions 
     will reduce pressure on labor costs, and give both employers 
     and employees more cash as soon as the next payday, thus 
     relieving financial pressures on both. Your proposal for a 
     withholding tax ``holiday'' certainly meets these criteria.
       We continue to believe that enhancing business demand is 
     essential for achieving a quick recovery. Again, the business 
     incentives should be broad-based and of such a magnitude that 
     they change business behavior by accelerating spending that 
     is now being deferred. We also believe that any business 
     stimulus must deal with existing tax provisions, such as 
     Alternative Minimum Tax, which would act to negate the impact 
     of the stimulus.
       We also understand there has been some concern expressed 
     about the ability of companies, as a practical matter, to 
     implement a payroll tax reduction on short notice. We have 
     surveyed our companies to see how quickly a payroll tax 
     reduction can be implemented. These companies, some of the 
     nation's largest employers, have said it could be implemented 
     in a range of a couple of days to a maximum of three weeks if 
     it is kept simple, and we have some leeway how to implement 
     the tax holiday.
       If we can provide further information, please do not 
     hesitate to contact me.
           Sincerely,
                                               John J. Castellani.

  Mr. DOMENICI. I hope those talking will at least put this letter 
among the things they consider in terms of the reality of the impact on 
the American consumer, the American buyer and seller, the American 
worker, and the American employer. This says an awful lot about many 
employed people. I don't know how many million American employees are 
represented by this group, but it is an awful lot.
  Having said that, I understand there is some concern about the Social 
Security recipients of our country. Nobody will disagree the best thing 
for the Social Security trust fund and the best thing for you, Social 
Security recipients of the future, is for this economy to get going 
sooner rather than later. If we had a little time, we could debate and 
show graphs about what will happen to Social Security if this American 
economy stays in the tank for another year or for 2 years and what will 
happen if it comes out in 6 months. If we can get it out quick and get 
it growing, every Social Security recipient of today and those planning 
on it in the future will know the best thing we can do is pass the 
stimulus package. That will start the economy. There is no harm to the 
Social Security trust fund.
  We are already using it because we are in the red. All we are saying 
is, as soon as we take it out, we replenish it, day by day, hour by 
hour, and nothing can happen to the fund. If you want to talk about 
protecting it, that is all well and good, but the reality is the best 
way to protect it is to do it and pass this stimulus. That will help 
the Social Security recipients the most.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Oklahoma.

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