[Congressional Record (Bound Edition), Volume 148 (2002), Part 1]
[Senate]
[Pages 553-554]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           ECONOMIC STIMULUS

  Mr. AKAKA. Mr. President, I rise in support of the compromise 
economic stimulus package we are now considering.
  The slowdown of our Nation's economy has been a matter of increasing 
concern following the terrorist attacks on September 11th. Millions of 
Americans are dealing with the economic repercussions of the attacks on 
our Nation. Hundreds of thousands of workers have lost their jobs, and 
consumer and business confidence has eroded during this time of 
uncertainty. The decrease in economic activity is affecting companies 
ranging from small businesses to corporations, not to mention entire 
industries such as the airlines and the travel and hospitality 
industry.
  The slowdown in our Nation's economy is reflected in the State of 
Hawaii, where as of January 26, 2002, 56,313 people have filed 
unemployment claims since September 11th. This is almost double the 
amount of claims filed for the same time period as last year. In the 
weeks after the terrorist attacks most of those filing unemployment 
claims worked in the visitor industry. However, state labor department 
officials have advised me that claims are coming in from workers laid 
off from a wide range of industries and small businesses in Hawaii. In 
2001, our visitor industry experienced a $1 billion decline from the 
previous year. After September 11th, domestic travel to Hawaii fell 30 
percent and international travel dropped by 50 percent. The number of 
visitors to Hawaii declined by 600,000. Our Governor and State 
Legislature are considering ways to deal with a $300 million budget 
shortfall.
  The economic stimulus proposal that we are currently considering 
includes important provisions such as extending unemployment insurance 
benefits for an additional 13 weeks for those individuals who have 
exhausted their regular, state-funded benefits. With the Hawaii State 
Department of Business, Economic Development, and Tourism predicting 
that a full recovery will not occur until the last half of 2003, it is 
imperative that we pass responsible economic stimulus legislation. 
Hawaii's economy and working families cannot afford another long and 
disastrous recovery, especially since the State was just beginning to 
recover from a nine-year economic recession.
  Temporarily extending unemployment insurance benefits will help the 
American people and revitalize consumer confidence. As recent research 
has shown, the Unemployment Insurance system is eight times as 
effective as the entire tax system in mitigating the impact of a 
recession. In addition, the Unemployment Insurance system is able to 
target the very sector of society that needs the most economic 
stimulus. I would like to remind my colleagues that in every recession 
during the past 30 years, including the 1990-1991 recession, 
Unemployment Insurance benefits were extended.
  There is no doubt that extended unemployment insurance benefits and 
the other elements that make up the core of this short-term economic 
stimulus package would help to boost Hawaii's and our Nation's weak 
economy. There are faint signs of recovery and resilience nationwide 
which underscore that we may, I repeat may, have seen the worst from 
the current recession. A

[[Page 554]]

well-defined, short-term stimulus package that is limited and 
specifically targeted for maximum effectiveness can play an important 
role in promoting economic recovery.
  Clearly, there are contrasting views among Members of Congress as to 
what provisions should be included in a stimulus package to maximize 
the stimulative effect on the economy. I believe that the economic 
stimulus package should encourage increased spending as soon as 
possible to rejuvenate the economy, assist people who are most 
vulnerable during the economic slowdown, and restore business and 
consumer confidence. However, it is important that fiscal discipline 
over the long-term be maintained in order to ensure economic growth in 
the future.
  I commend the majority leader for his efforts to fashion a bipartisan 
compromise and move this important legislation. In addition to extended 
unemployment benefits, the compromise package includes three components 
that both parties included in their stimulus bills last year, including 
tax rebates, bonus depreciation, and fiscal relief for states through a 
temporary increase in the Federal Medical Assistance Percentage, FMAP, 
rate.
  Last month, I attended the opening of the Hawaii State Legislature 
and Governor Ben Cayetano's State of the State address. I am not 
exaggerating when I say that increased Federal Medicaid assistance to 
the states is critical to my State and States across the Nation that 
are facing tremendous revenue shortfalls because of the recession, the 
repercussions of September 11th, and Federal tax changes enacted last 
year.
  I strongly support the component of the stimulus package that would 
temporarily increase the FMAP rate for States. Medicaid matching rates 
for fiscal year 2002 are based on State per capita income data from 
1997, 1998, and 1999--years in which the national economy was strong. 
Consequently, matching rates are slated to be reduced for 29 States in 
2002. The reduction in FMAP rates has worsened an already bleak fiscal 
outlook for many States. In August 2001, the Congressional Budget 
Office projected that Medicaid expenditures in 2002 would be 9 percent 
higher in 2002 than in 2001, while States projected that their revenues 
would rise just 2.4 percent.
  Rising Medicaid expenditures have long been a serious concern to 
States. The repercussions of the terrorist attacks on September 11 are 
leading most analysts to expect even higher State Medicaid costs 
because the economic downturn will make more people eligible for 
Medicaid and lower State revenues. It is during difficult financial 
times that the Medicaid program becomes a primary target of state 
budget cuts. Yet, people need Medicaid during these times more than 
ever.
  The Federal Government matches between 50 to 83 percent of the cost 
of Medicaid in each state. On average, the Federal Government pays 57 
percent. The FMAP formula is based on the State's per capita income in 
the 3 calendar years that are most recently available. For years, 
Hawaii received the lowest Federal match--50 percent. Recognizing that 
increasing the FMAP rates would ease States' financial constraints, I 
have long worked to increase Hawaii's FMAP rate.
  The temporary increase in the FMAP is an important component of our 
Nation's economic stimulus policy. Medicaid is the largest Federal 
grant-in-aid to States. Temporarily increasing the Federal matching 
rate could have broad positive ramifications for State budgets, the 
impact of which would be rapid and would not require additional Federal 
or State bureaucracy. These changes would provide much needed health 
care to people in need by providing States the resources to do so.
  It is clear that an economic stimulus package is needed to support 
our economy during these uncertain times and to promote a rapid 
recovery. We saw the Federal Reserve Board cut interest rates 11 times 
in a row last year with limited economic effect. Congress has also 
taken actions to provide some of that stimulus through emergency 
spending for recovery efforts and to assist the airline industry. It is 
critical that Congress promptly pass an economic stimulus package that 
will rejuvenate our faltering economy while assisting households who 
have been especially hard hit by the downturn in the economy. I hope 
the Senate will complete action on this legislation this week so that 
the Congress can send a measure to the President by the Presidents' Day 
holiday.
  Mr. REID. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. CORZINE. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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