[Congressional Record (Bound Edition), Volume 148 (2002), Part 12]
[Senate]
[Pages 17272-17273]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              THE ECONOMY

  Mr. REED. Mr. President, I thank the Senator from Connecticut for his 
gracious intervention on my behalf. We are debating today homeland 
security. We are also engaged in another significant debate about 
international security in the context of Iraq and the war on terror. 
But as Senator Daschle reminded us, we also have to be concerned about 
economic security in the United States.
  Frankly, the economic numbers we have been seeing lately do not give 
much confidence to the American people that their economic security is 
being protected. As the vice chairman of the Joint Economic Committee, 
I have the opportunity to review, along with the staff, the reports 
that are coming in about our economy. It is clear that GDP is growing, 
but too slowly to make much of a dent in the unemployment rate. People 
who have lost their jobs face a much more difficult job market, and 
many are beginning to exhaust their unemployment benefits.
  Everyone is facing increased premiums for health care. Employers are 
cutting back their contributions to health programs. They are being 
stressed in terms of adequately funding pension programs. These are the 
real concerns of Americans today all across this country.
  When we look at the numbers, when we look at the reports, the 
conclusion is, obviously, we are still in an economic slump. Indicative 
of this are the figures I have on this chart. This is the record of job 
growth, but it is not growth at all, it is job loss during the Bush 
administration. In January 2001, there were 112 million jobs, today, 
August 2002, 110 million jobs--a loss of over 2 million jobs that have 
not yet been replaced in this economy.
  The unemployment rate in August was 5.7 percent. That is one and a 
half percentage points higher than it was when President Bush took 
office. The number of unemployed Americans was more than 2 million 
higher in August than it was when President Bush took office, as 
indicated by this chart.
  There is also another telling statistic that is within these 
unemployment numbers. The number of long-term unemployed Americans--
those who have been unemployed more than 26 weeks--has increased 
significantly. This chart reflects that increase. In January of 2001, 
648,000 Americans had been unemployed more than 26 weeks; in August 
2002, 1,474,000 Americans were unemployed more than 26 weeks--a 
significant jump. It is significant not just in terms of numbers but in 
terms of something else: Americans exhaust their basic unemployment 
benefits after 26 weeks. Unless we have an extended benefit program in 
place, after 26 weeks American workers have no support as they look for 
jobs, as they try to support their families, as they try to make ends 
meet. This problem is not going away.
  Although as part of the stimulus package we have passed extended 
benefits, they are scheduled to expire at the end of this year, so we 
have a real obligation in these remaining days to protect a basic tenet 
of economic security in this country, and that is to provide extended 
unemployment benefits.
  The 1,474,000 will increase, and these individuals will not have the 
support they need to provide for their families. The little bit of 
growth we have seen so far is not going to head off a jobless recovery.
  It should be noted that when President George Herbert Walker Bush was 
President and we were in a recessionary period in 1991, the 
unemployment rate rose another full percentage point in the 15 months 
after the GDP started to grow again. So we can likely see increased 
unemployment.
  There are forecasters who have suggested our economic growth will be 
about 2.8 percent for the rest of the year--that is the Blue Chip 
consensus forecast--but the economy has to grow

[[Page 17273]]

at more than 3 percent to generate the kind of new jobs that will 
reverse this unemployment situation. No consensus forecaster fully 
expects that type of growth going forth. As a result, most economists 
suggest and predict that unemployment rates will rise to 6 percent. 
Again, this is a real challenge to the safety and security of the 
American family, just as real as the threats we are debating in terms 
of homeland security and international security.
  The conclusion, as one looks at these numbers and the economic 
performance from the time the President took over, is that President 
Bush's economy looks a lot like his father's economy. It is in 
recession, unemployment is growing, it will continue to grow, and yet 
there has not been an adequate response to this problem by the White 
House. He seems to have one proposal with respect to every economic 
question, and that is cutting the taxes of the wealthiest Americans.
  As this chart indicates, this is the effect of the proposed tax cuts 
of President Bush, tax cuts that were enacted last year. At year 10, 
when they are fully realized, the average benefits, based on income 
level, will be as portrayed in this chart. The lowest 20th percentile 
of Americans will receive about $66 a year in benefits. It goes up to 
about $375 for individuals making around $20,000, $600 for those making 
about $39,000 a year. The real gain, the real benefit, goes to the very 
wealthiest Americans--$55,000 roughly, on average, for the top 1 
percent. That is their annual savings for the tax benefits generated by 
the Bush tax proposal. This is not fair, and it is not smart. Unless we 
get all Americans participating fully in our economy, having the 
disposable income to go to the store to keep consumption up, to keep 
demand up, we are not going to have an economy that works for any 
American. Indeed, this is a glaring example of what some criticized 
Democrats for--class warfare. What is more unfair, inequitable, and 
slanted toward a class than this tax cut which favors the wealthiest 
Americans?
  In addition to these tax numbers, we have to understand that these 
tax cuts have put enormous pressure on other programs that are decisive 
for every American, but particularly important for low-income 
Americans: Medicaid Programs, Medicare Programs, a host of other 
programs that need Federal support. That support has been strained 
dramatically because of the pressure of the tax cut.
  We are at a point now where we have to act. We have to act in the 
very short run to restore extended unemployment benefits for the 
growing number of long-term unemployed Americans. We have to act, also, 
to resist the temptation to make all of these tax benefits permanent. 
However unfair this situation is, it will be compounded, and it will be 
compounded dramatically, if we make the tax cuts of the last year 
permanent.
  We have to go ahead and focus on those issues that are critical to 
the welfare of the American family today, for their economic security 
today. We have to be concerned about pensions, their strength. We have 
to protect, I believe, Social Security, which is the bedrock of 
America.
  I wonder how many employees of Enron and WorldCom and other companies 
2 years ago would have considered their Social Security as just a 
trivial benefit compared to their expanded and ever-growing 401(k) 
plans. Today, I suspect, they see their Social Security benefit, their 
defined benefit, as a lifeline, allowing them to make ends meet, or at 
least giving them a little extra to get through.
  We have to be strong in terms of protecting the bedrock program, 
Social Security. We have to be concerned about rising health care 
premiums and prescriptions drug costs. None of these problems can be 
addressed unless we provide the leadership, the resources, and the 
attention the American people demand.
  Let me conclude by saying, again, there is at least one thing we must 
do in the next several weeks: Extend long-term unemployment benefits. 
Unemployment, long term, is growing. It will continue to grow for many 
months. American workers deserve the opportunity for some support as 
they look for new jobs. They deserve the opportunity to help their 
families as they get through a very difficult period of time.
  I yield the floor.

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