[Congressional Record (Bound Edition), Volume 147 (2001), Part 5]
[Senate]
[Pages 6716-6719]
[From the U.S. Government Publishing Office, www.gpo.gov]



         BUSH TAX CUT PROPOSAL AND THE PSEUDO-RECESSION OF 2001

  Mr. BYRD. Mr. President, last Friday, the Commerce Department 
reported that the U.S. economy grew at a rate of 2 percent during the 
first 3 months of this year, January 2001 to March 2001. That is twice 
the rate that forecasters were projecting. It doubles the pace of late 
last year, October 2000 to December 2000.
  Saturday's Washington Post quoted economist Jim Glassman of J.P. 
Morgan Securities saying:

       These are great numbers. They suggest that the economy is 
     not nearly as weak as was feared and that we are not close to 
     being in a recession.

  This information stands in stark contrast to what the administration 
has been telling the American people in recent months. In presenting 
his budget and tax cut proposals to a joint session of Congress on 
February 28, President Bush declared:

       The long economic expansion that began almost 10 years ago 
     is faltering.

  As recently as March, White House aides warned that $1.6 trillion in 
tax cuts were needed to avert an impending recession.
  Contrary to the administration's dire warnings, the economy has 
continued its unbroken 10-year expansion--the longest economic 
expansion in U.S. history. The Nation's unemployment rate is near 
historic lows at 4.3 percent. Consumer spending increased from a 2.8 
percent rate in February to a 3.1 percent rate in March. Construction 
spending remains strong, business infrastructure investment is rising, 
manufacturing activity is inching up, and factory inventories are 
falling.
  Even the stock markets--and we have learned that the stock market is 
not the economy--but even the stock markets are rebounding from their 
recent lows. The Dow Jones increased from 9,500 in early March to 
almost 10,900 yesterday--10,898.34--a 15 percent increase. The Nasdaq 
increased from 1,619 in March to 2,168 yesterday--a 34 percent 
increase.
  In the midst of the Great Depression of 1932, which I lived through, 
President Franklin Roosevelt cautioned that the only thing we have to 
fear is fear itself. In the midst of the pseudo-recession of 2001, the 
only thing that the Bush administration has to fear is stirring up 
public doubt.
  This administration has been walking a fine line between promoting 
the President's tax cut proposal on the one hand and alarming consumers 
and investors. The Bush administration has touted the President's tax 
cut plan as a possible ``second wind for economic growth,'' so that bad 
economic news becomes good news for the tax cut.
  That is the tune the administration plays.
  The problem is that, in attacking an illusory problem through the 
bogus cure of massive tax cuts, this Administration creates two very 
real problems. It threatens our debt repayment efforts and cuts back on 
our ability to address a backlog of infrastructure needs.
  Let's consider, for a moment, our national debt. The Congressional 
Budget Office projects that the national debt will increase from its 
current levels of $5.7 trillion to $6.7 trillion in FY 2011. The 
President's budget would set aside $2 trillion to retire the national 
debt over the next ten years, but that number is based on two highly 
unlikely assumptions: (1) that $5.6 trillion in budget surpluses will 
materialize in spite of CBO warnings that they might not, and (2) that 
discretionary spending

[[Page 6717]]

should be limited to the unrealistically low numbers proposed by the 
President.
  If the massive-permanent tax cuts are enacted, our debt retirement 
efforts may be compromised and that could significantly disrupt the 
financial markets, resulting in higher interest rates and slower 
economic growth.
  An equally important concern is whether these tax cuts will allow us 
to adequately address this country's failing infrastructure. Roads, 
bridges, airport runways, mass transit systems, water and sewer 
systems, and energy delivery systems--we could go on and on--are 
vitally important to support thriving businesses. They enhance 
productivity. They provide jobs. They are basic to a strong economy.
  Yet, according to the American Society of Civil Engineers, ASCE, one-
third of the nation's major roads are in poor or mediocre condition, 
costing American drivers an estimated $5.8 billion a year.
  The latest ASCE survey revealed that 29 percent of the nation's 
bridges are structurally deficient or functionally obsolete.
  Airport capacity has increased only 1 percent in the past 10 years. 
No wonder airport congestion delayed nearly 50,000 flights in one month 
alone last year.
  Due to aging, outdated facilities, and severe overcrowding, 75 
percent of our nation's school buildings are inadequate to meet the 
needs of school children--to meet the needs of America's 
schoolchildren, tomorrow's citizens, and tomorrow's leaders.
  The nation's 54,000 drinking water systems face an annual shortfall 
of $11 billion to comply with federal water regulations.
  Some of the nation's 16,000 wastewater systems are 100 years old. 
More than one-third of U.S. surface waters do not meet water quality 
standards.
  These statistics show the infrastructure needs of a third-world 
nation, not the world's last remaining super power.
  Furthermore, these statistics only reflect the gap between federal 
funding and our nation's physical infrastructure needs. What about our 
human infrastructure needs?
  The Senate voted last month to set aside $225 billion in tax cuts to 
finance investments in education.
  The Senate also declared its intent to set aside $300 billion for a 
prescription drug benefit--twice the amount allotted in the President's 
budget.
  Medicare is estimated to have 45 million beneficiaries in 2015 (11 
million more than 2000), yet the program will not have the resources to 
finance benefits after 2016, 15 years from now.
  Let me say that again. This should be of interest to everybody in 
this country.
  Medicare is estimated to have 45 million beneficiaries in 2015; yet 
the program will not have the resources to finance benefits after 2016.
  Likewise, the Social Security program provides a financial safety net 
for our Nation's seniors; yet it will not be able to rely on payroll 
tax revenues after 2016.
  Let me say that again, talking about the Social Security program.
  I can remember when we didn't have any Social Security program in 
this country. I can remember when Franklin Delano Roosevelt and a 
Democratic Congress provided the Social Security program in the 
country.
  Before that time, when people became too old to work, they either 
stood at the gates of their children with their hats in their hands 
hoping that their children would take them in, or, otherwise it was 
over the hill to the poorhouse. I can remember that.
  All through the years, the workpeople of America, the people who have 
labored and earned their bread by the sweat of their brow, paid into 
that Social Security program as did their employers, and looked forward 
to the time when they could retire in dignity, and not have to sit on 
the porch of the old county poor farm, and not have to call upon their 
children, who were already struggling, to take them in.
  What do we see happening?
  We see that the Social Security program provides the financial safety 
net for our Nation's seniors, yet it will not be able to rely on 
payroll tax revenues after 2016 just 15 years from now. Unless we plan 
now for this eventuality, where will the revenue come from to ensure 
that these retirement benefits are paid if the surpluses don't 
materialize?
  Federal dollars also support high-technology research which, in turn, 
is transferred to the private sector to help domestic businesses 
compete more efficiently in the international market place.
  Where will the money come from to finance these human infrastructure 
needs--if the kitty is blown--if the kitty is blown on tax cuts?
  The reality of this year's budget process is that if the Senate 
decides to approve 10-year tax cuts as large as $1.6 trillion, or even 
$1.35 trillion or $1.2 trillion, it is likely to do so at the expense 
of everything else that we owe to the American people.
  You, the people as I am looking right into your eyes through that 
electronic camera behind the Presiding Officer's chair. It is you. Yes, 
it is your money, but it is also your Social Security program, it is 
your Medicare program. Whether you are young or whether you are old, it 
is going to affect you, the American people.
  The administration is fond of saying that these projected surpluses 
are the people's money. And they are. Yes, it is the people's money. 
But what the American people expect for their tax dollars-- modern and 
safe roads--safe roads on which they can take their children to the 
childcare center, on which they can go to church, on which they can go 
to school, on which they can go to the bank, on which they can go to 
the grocery store, on which they can go to work--safe roads, modern 
roads, clean drinking water, adequate health care, reliable retirement 
benefits, access to higher education, and better public schools.
  The President's budget does not even allow for what the Congressional 
Budget Office says is necessary to maintain current services in such 
key areas as transportation, agriculture, and energy--we have an energy 
problem in this country, don't we?--and certainly does not provide what 
is necessary to address the backlog of infrastructure needs in 
education, health care, and a whole host of other areas.
  Consider the following: Highways, bridges and transit: The President 
proposes to divert--yes, you heard me exactly; divert--$430 million of 
TEA-21 funding in FY 2002 from highway construction to other 
transportation programs.
  Schools: The President proposes to terminate the $1.2 billion school 
construction program. How about that?
  Drinking Water/Wastewater: The President proposes to reduce funding 
for EPA clean and safe drinking water by $463 million and grant and 
loan levels for the rural water/wastewater by $100 million.
  I traveled around the world in 1955, 46 years ago. In most of the 
countries where I traveled, we did not find clean drinking water. We 
were told not to turn on the faucet, not to drink the tap water: Don't 
drink it. Boil it in advance. Oh, I saw many of the beautiful sights of 
the world--the Taj Mahal, the pyramids of Egypt, Angkor Wat in 
Cambodia--but the most beautiful sight I saw, after that 66 days of 
traveling around the world, were the two little lights, the two little 
red lights in the top of the Washington Monument when I flew back into 
National Airport at the end of that journey. And what a joy it was just 
to be able to go to the spigot in the kitchen and turn on the water and 
get a glass of fresh, clean, safe drinking water.
  There are millions of people in this country today who cannot go to 
the water faucet and turn it on and get safe drinking water--right in 
this country. One does not have to go to Kandahar, one does not have to 
go to Afghanistan or to Pakistan or to Vietnam or to Korea in order to 
experience what I am talking about. Just go to West Virginia. There are 
some places in West Virginia where the people do not have safe, clean 
drinking water.
  What about dams and navigable waterways?
  The President proposes to reduce funding for the Corps of Engineers 
from

[[Page 6718]]

$4.5 billion to $3.9 billion. The President proposes no new starts 
despite a backlog of $38 billion of authorized but unfunded projects.
  Hazardous waste disposal, what about that? Despite a $13.6 billion 
backlog for cleaning up toxic sites on the national priority list, the 
administration proposes to freeze Superfund at the FY 2001 level. 
Freeze it. Do not increase it. Leave it at the 2001 level.
  Instead of addressing the Nation's infrastructure needs, this 
administration chooses to devote its resources to a so-called fiscal 
stimulus, even though the economy seems to be correcting itself without 
one.
  The President has said that the economic engine is beginning to 
sputter, and that tax cuts are needed to accelerate the economy. What 
good does it do to rev up the economic engine if the roads are in such 
a state of disrepair that they cannot be traveled? Even the fastest, 
most expensive, most shiny, glossy car in the world cannot travel over 
bridges that are dangerous, falling apart, and roads filled with 
potholes.
  And one does not have to travel very far to see potholes. Just drive 
around in the Nation's Capital. Potholes--one sees on television the 
pictures of automobiles hitting those potholes and then having to go to 
the nearest garage to have the axle replaced. The tires are blown. 
Right here, in the city of potholes, Washington, DC. One does not have 
to go to Mud, WV, or to Duck, WV, or to Sophia, WV. Just go to 
Washington, DC. The potholes are there.
  Most people expect to get something for the taxes they pay. They 
expect clean, safe water. The taxpayers expect to see, modern highways, 
and transportation systems. They expect to see food free of toxics, a 
sound education system, decent health care, and safe streets and 
neighborhoods. The frustration comes when the taxpayers don't see their 
tax dollars working for them. We tell them their tax dollars are 
collected to buy these things that will improve their lives.
  When we don't deliver, we break faith with our promise and we 
undermine the trust of the taxpayers. I say the people don't want their 
money back, they want their money's worth. We hear this refrain being 
sung. I can hear it now wafting its way in the refreshing air of May 
from the White House at the other end of Pennsylvania Avenue: The 
people want their money back. No, I say; the people want their money's 
worth.
  If I go to the grocery store with my wife Erma to buy food for the 
weekend, I don't want the grocery man to smile at me and say: I won't 
fill up your shopping cart but I will give you your money back. I don't 
want my money back; I want my money's worth.
  When I hire a contractor to fix my roof if it is leaking, I don't 
want him to tell me he won't do the job but he will give me my money 
back. I want to be dry. I don't want the rain to come into my modest 
cottage. I don't want my money back; I want my money's worth.
  If I take my old Chevrolet to a mechanic because it won't run, I 
don't want to be told that the car can't be fixed but I will get my 
money back. I don't want my money back. I want my money's worth. Fix my 
car. That is what the American people want. They want us to get the 
most from the taxes we collect. They want us to plan ahead and invest 
in our country. They want us to exercise stewardship in their best 
interest. They don't want us to creep up to them with our head down and 
with a long face and say to them: Here, you gave us this tax money. I 
hid it in a napkin. Here is your money back. No. That is like the 
unfaithful steward in the Biblical proverb.
  The American people want to get the most from the taxes we collect. 
They want us to plan ahead and to invest in our country. They want us 
to do the basics that feed the economy, to allow for future growth and 
anticipate future change. We fail them if we don't do these things. We 
have failed them if we say: Here, just take your money back. The people 
can't repair highways. They can't build sewers and clean up water 
systems. They can't build new airports. They can't inspect the food 
supply. Government exists to take care of things that people cannot do 
on their own.
  It also exists to make intelligent choices about future trends and to 
anticipate needs. How can we do that if we squander our ability to make 
investments for the future because of huge tax cuts, huge tax give-
backs now, based on projections which may not be real?
  The Associated Press is reporting today that President Bush has 
struck a deal with the Republican leadership on a so-called budget 
deal. Further, I understand that the House and Senate Budget Committee 
chairmen are rushing to file the budget resolution conference report 
this evening. This is another example, if it is true, of the President 
and the Republican leadership disregarding the President's promise to 
bring bipartisanship back to Washington.
  The House and Senate took up the budget resolution without a detailed 
President's budget. For the first time in its history, the Senate 
Budget Committee did not mark up the budget resolution. And now we hear 
we will have a budget resolution conference report that was produced 
without the involvement of the ranking members of the House and Senate 
Budget Committees, also without any input by the ranking members of the 
Senate and House Appropriations Committees.
  So what is in this conference report? We do not have the report, but 
according to the press reports, it contains $1.35 trillion for tax cuts 
over 11 years and it limits discretionary spending to a 5-percent 
increase for fiscal year 2002.
  Where is the bipartisanship? I am not in on such a deal. I am the 
ranking member of the Appropriations Committee. Where is the 
bipartisanship? The administration puts on a big show, having invited 
everybody down to the White House. Where is the bipartisanship in this 
budget conference report, if what we are reading in the press is true?
  I am also told that it contains budget process provisions, such as a 
defense firewall, that were in neither the House nor Senate 
resolutions.
  What will be the effect of a 5-percent increase for discretionary 
programs? That is what I hear: Discretionary will be 5 percent.
  At best, this level provides only enough of an increase for 
nondefense programs to maintain last year's funding levels, adjusted 
for inflation. This level will leave no resources for increases that we 
all know are necessary for education, for infrastructure, for research 
and development, and for promoting our energy independence. What about 
Social Security or Medicare?
  The increases being debated on the floor for elementary and secondary 
education this week could not be funded, to say nothing of other 
education programs such as Pell grants. During debate on the budget 
resolution in the Senate over 20 amendments were adopted to add 
discretionary spending. Almost half of those amendments were offered by 
Republicans. Where are we going to get the money to pay for increases 
for veterans' medical care, the Wellstone and Bond amendment, or for 
fossil fuel programs, or for the National Science Foundation, the Bond 
and Mikulski amendment, for food safety, the Clinton amendment, for 
conservation funding, the Murkowski amendment, for energy research, the 
Reid amendment, or for law enforcement, the Leahy amendment? The 
President proposes to cut State and local law enforcement by over $1 
billion. Where will the money come from to restore those cuts? Where 
will the money come from to add funds for health centers, the Bond 
amendment?
  The PRESIDING OFFICER. The Senator has used his 30 minutes.
  Mr. BYRD. I ask unanimous consent that I may proceed for 5 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BYRD. And what about our Nation's infrastructure? Where will we 
get the money to restore the cuts proposed for clean water and safe 
drinking water, for the Corps of Engineers, and for school 
construction?
  Very often in this country, there seems to be nothing on our radar 
screen except the immediate, the here and now. We think no further than

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next week, next year, or the next election. Where are we if our leaders 
fashion fiscal policy on such things, on such bases? Where are we as a 
nation if the most vision we can muster is a colossal tax cut for the 
wealthy that may jeopardize such basics as our ability to ensure a 
clean water supply to all of our citizens? It is a hollow vision. It is 
a vision that appeals to greed. It is a vision that fails to ask us to 
pull together as Americans for the good of the whole country. It is a 
vision that sets up a patchwork quilt of a nation, with areas of 
prosperity next to areas of poverty. It is a vision that makes a hollow 
joke out of the word ``bipartisanship.'' It is a ``fold your hands,'' 
``you do it'' vision, based on an ideology and an experiment that 
failed in the 1980's. Most people in West Virginia won't benefit from 
this tax cut, but they will suffer from the continued lack of 
investment in the basics. They are not by themselves. West Virginians 
won't be suffering alone. There will be others like them in every State 
of the Union. They don't want their money back. I am talking about my 
constituents. They don't want their money back; they want their money's 
worth.
  I implore this administration to take off the dark sunglasses and 
think about that word ``bipartisanship'' and lift its nose from the 
ideological bible of the tax cut religion. Let me say that again. I 
implore this administration to lift its nose from the ideological bible 
of the tax cut religion. There is much more to keeping faith with the 
American people than tax give-backs for the better off.
  Building a strong nation does not just mean building another weapons 
system. Building a strong nation means giving our people the basics, 
the education, the health, the opportunity to compete in an 
increasingly global economy. It means providing the roads, 
transportation, water and sewer facilities which support a thriving 
economy and allow the people to follow their dreams.
  This morning's newspapers reported that the Republican leadership had 
reached a tentative deal on the overall amount of tax cuts that can be 
passed by the Senate. I noted that no deal has yet been reached with 
regard to discretionary spending, although a consensus seems to be 
consolidating around a 5-percent figure. That is not bipartisanship. 
Where was I? Where were the ranking members? Where were the chairman 
and the ranking member of the Senate Appropriations Committee in this 
deal? Where is the ranking member of the Senate Budget Committee in 
this deal? Does the White House call this bipartisanship?
  I hope the Senators will give due recognition to the real threats 
facing this country--the declining state of our infrastructure and our 
national debt--and not chase will-o'-the-wisp, pseudo-recessions, and 
money-back guarantees that cannot deliver the goods.
  Mr. President, I yield the floor.

                          ____________________