[Congressional Record (Bound Edition), Volume 148 (2002), Part 15]
[Senate]
[Pages 20642-20645]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              THE ECONOMY

  Mr. DASCHLE. Mr. President, last week we completed our debate on 
Iraq. It was a difficult debate, but at the end we were able to come 
together to speak with a large degree of consensus on an issue of 
national security. To Democrats, security means more than national 
security and homeland security. It also means economic security, 
retirement security, the security of knowing that if you lose your job, 
you can find a new one, and if you get sick, you can get health care. 
And it means the security of knowing that those goals are not being 
undermined by poor economic leadership and ideologically driven 
economic leaders.
  The news, when it comes to America's economic security today, has not 
been good. This chart shows one of the many ways with which to 
determine the state of the economy. Last week, the Wall Street Journal 
reported that we are experiencing the worst market since the 1930s. 
This is not just a bear market, it is a grizzly bear market. The broad 
Standard & Poor's 500 Stock Index has now lost nearly half of its 
value. Since President Bush took office, Americans have seen the 
markets lose $5.7 trillion in value. That is $9.5 billion a day that 
has come out of the market. This red piece of the pie chart is an 
approximation of what has been lost. About one-third of the entire 
market capitalization has been lost in less than 2 years--$5.7 
trillion.
  Here is what that means to a person with $100,000 in a 401(k) 
invested in the Standard & Poor's 500 Index when President Bush took 
office. The value of their investment has now decreased by $35,000. 
Many who were invested more aggressively have lost much more. If you 
had $100,000 in January of 2001, you now have $65,000 in September of 
2002.
  A lot of Americans who are lucky enough to have a little bit of money 
saved and invested are seeing their children's college investments and 
their own nest eggs disappear. We have recently seen an increase in the 
number of 60- to 70-year-olds in the workforce. These people are not 
wondering when they will be able to retire. Now they are wondering if 
they will be able to retire.
  This chart shows what has happened in the job market in the last 2 
years. The people wondering if they will be able to retire are the 
lucky ones. To even think about retiring, you have to have a job. Since 
President Bush took office, unemployment has jumped by 1.5 percent. 
More than 2 million people have lost their jobs. These are private 
sector jobs. We started in January of 2001 at 111 million jobs actually 
being held. We have now dropped from 111 million to 109 million in 
about 18 months. Many of those who lost their jobs are having trouble 
finding new work. Nearly 1.5 million people have been unemployed now 
for over 6 months. These people have not just lost their jobs, they are 
starting to lose hope.
  This chart shows what we had at the beginning of the year 2001. About 
648,000 people were unemployed for more than 26 weeks. That number has 
now jumped from 648,000 to 1,585,000 people. Now they are also losing 
their unemployment insurance. Unemployment insurance is supposed to 
provide temporary help to people who lose their jobs to tide them over 
until they find new ones. But now many who lost their jobs in the 
months after September 11 are losing their benefits. Now they are 
trying to find a job in an economy even worse than the one that had 
caused them to lose their job in the first place.
  This chart shows what has happened. In 1992, 1.4 million workers had 
exhausted their unemployment benefits. Now, in the year 2002, we expect 
that number to be exceeded by 800,000--the number of people who will 
experience the expiration of their unemployment benefits.
  The market is in steep decline. People are losing jobs. People are 
unable to find jobs. There is a daily drumbeat of negative economic 
news. There is no question--any one of these charts points out very 
clearly--Americans are hurting.
  But this administration does not understand their pain because it 
does not see a problem. On September 5, president Bush said 
confidently:

       I am optimistic about our economy. I am optimistic about 
     job growth.

  The next day--the very next day--the Bureau of Labor Statistics 
reported that in the previous month manufacturing lost 68,000 jobs and 
retail businesses lost another 55,000.
  On September 14, we learned that because homeowners were having such 
a hard time paying bills, home foreclosure rates reached their highest 
rate in 30 years.
  A couple of days later, Lawrence Lindsey, Director of the National 
Economic Council, said:

       There's a lot of good news out there. We have challenges as 
     well. But given those challenges, I think the economy is 
     doing very, very well.

  On September 24, we learned that the poverty rate increased for the 
first time in 8 years with 1.3 million more Americans falling into 
poverty. We also learned that median household income fell for the 
first time in a decade.
  The next day, Treasury Secretary Paul O'Neill told us:

       The latest indicators are good.

  On September 29, the census reported that the number of Americans 
without health insurance rose yet again--this time by 1.4 million 
people to 41.2 million. Not only are low- and middle-income families 
losing income because of the skyrocketing price of health care

[[Page 20643]]

premiums and prescription drug costs, they are now losing their health 
insurance.
  Two days later, the President said:

       I think the economy is strong. There are some rough spots, 
     but we will deal with it.

  Last Thursday, Secretary O'Neill and Secretary Evans had a joint 
press conference. Secretary O'Neill said:

       We are on a bumpy road to recovery, but the direction is 
     still up.

  Secretary Evans added:

       I am one that is pleased with the recovery that is now 
     underway.

  The next day--the very next day--this is what we saw: Consumer 
confidence and consumer spending depicted in this chart both falling, 
retail sales taking their worst drop since November of last year, and 
consumer sentiment dropping to levels last seen in the fall of 1993.
  This chart shows the consumer expectations and what has happened over 
the course of the last 6 months. In May, consumer expectations were 
relatively high at 92.7. Many thought the economy was going fairly well 
and thought it was going to continue to do better. That index dropped 
to 87. It went down to 81 in July, and then down to 80. Now it is all 
the way down to 72. We have lost almost 25 percent of consumer 
confidence in just 5 months.
  ``The direction is up.'' That is what the Bush administration said. 
Optimistic about job growth, the latest indicators look good, the 
economy is doing very well. Some rough spots? I don't know where these 
guys are living, but it must be somewhere within the neighborhood of 
oblivious. When it comes to America's economic problems, this 
administration is woefully out of touch.
  A couple of weeks ago, the President said:

       I spend a lot of my time worried about the job security of 
     our fellow citizens.

  Last week, it became even more clear that this administration's focus 
is not the economy. The White House announced that the President will 
be hitting the campaign trail for 14 straight days before the November 
5 election. In fact, I am told he will be coming to South Dakota--my 
State--at least 2 of those 14 days.
  I would ask President Bush to do one thing: Cancel the political 
trips and spend less time trying to save jobs for Republican 
politicians and more time trying to save the jobs of average Americans.
  Unfortunately, not only are the President and his advisers out of 
touch with our economic problem, but they are out of step when it comes 
to solutions. They have seemingly pursued ideological goals at the 
expense of sound economics, and the American people will pay the price.
  Last year, it became clear that our economy was starting to slow. 
Every objective economist told us tax cuts could help solve the 
problem. But they had to be the right kind of tax cuts. They had to 
boost consumption be getting money into the hands of people who would 
spend it--people with moderate incomes. It had to be done now, 
affecting the economy now, and affecting people's incomes now. At the 
same time, we were told that whatever we did, we should make sure it 
didn't do any long-term fiscal damage.
  Here is what the Democrats said: let us pass a bill to provide 
immediate tax relief for all families. Let us do that now--just as the 
economists proposed we do it. It included a tax cut check. Unlike the 
plan that passed, it made sure every taxpayer, including those who pay 
only payroll taxes, would get one. It would have also reduced the 15-
percent tax rate--the rate paid by all income-tax payers--to 10 
percent, and it would have done it permanently. It would have been 
fair, fiscally responsible, and stimulative.
  Instead of passing that responsible plan, the President and his 
advisers insisted on a plan that had far less immediate tax relief but 
had a cost that explodes to $250 billion in the year 2011 alone. Smart 
tax relief for everyone was held hostage by the President and his 
advisers to a massive tax cut for the very few at the very top.
  Moderate earners got their $300 immediate rebate check, but not until 
millionaires got a tax cut equal to that $300 rebate check every other 
day. Now, after going from record surpluses to real deficits, we are 
seeing just how bad a decision that was.
  After September 11 dealt another blow to our already staggering 
economy, we all agreed that the American economy needed a stimulus. So 
Democrats and Republicans of the Senate asked the experts, including 
Federal Reserve Chairman Alan Greenspan and former Treasury Secretary 
Robert Rubin, what are the most effective steps we can take to shore up 
our economy? Here is what they told us: Put money into the hands of 
low- and middle-income workers. They are the ones who will spend it 
quickly. Make sure that workers who have lost their jobs receive 
unemployment benefits, and cut taxes for businesses, but limit the tax 
cuts to those who actually help create jobs.
  Finally, they said our plan must be affordable and temporary. After 
all, the baby boomers start retiring in less than a decade, and we 
shouldn't be taking on major long-term spending or revenue obligations 
that will make it even more difficult to meet our responsibilities to 
Social Security and Medicaid.
  That was the advice we received.
  What did this administration propose? They proposed permanently 
eliminating the corporate alternative minimum tax. House Republicans 
went a step further and proposed making the alternative minimum tax cut 
retroactive. Incredibly, that one provision would have given $250 
million in one check from the U.S. taxpayers to the Enron Corporation. 
That is right--$250 million from every taxpayer in America to none 
other than the Enron Corporation.
  That had nothing to do with stimulus. To this day, I am not sure what 
it had to do with. Instead of a temporary business investment 
incentive, they insisted on a 3-year bonus depreciation, which was 
passed. That essentially said to businesses: You don't need to invest 
now. Wait a couple of years and see how it goes.
  The Administration and congressional Republicans have refused to 
provide any aid to hard-hit States which, as a result, are now being 
forced to cut health care and education programs. They had to be 
dragged kicking and screaming to an extension of unemployment insurance 
despite the fact that former Treasury Secretary Rubin called it ``a 
near perfect stimulus.''
  When the markets were shaken by a wave of corporate scandals, it was 
clear we needed real reform in order to boost investor confidence. The 
administration again said and did the wrong thing. On January 14, 1 
month after Enron declared bankruptcy, 4 days after the Justice 
Department confirmed that a criminal investigation of Enron had begun, 
Secretary O'Neill said:

       Companies come and go. It's part of the genius of 
     capitalism.

  After dragging their feet on corporate accountability, this 
administration reluctantly came to the conclusion it had to support it. 
But now it is standing idly by as its appointees try to undermine the 
tough reforms that we passed last summer.
  Last week, it was reported that Harvey Pitt, the former accounting 
industry lawyer chosen by President Bush to head the SEC, has given the 
accounting industry a veto over who will head the new Accounting 
Standards Board, the centerpiece of the corporate accountability law we 
passed.
  According to news reports, Chairman Pitt blocked the appointment of 
John Biggs, a highly respected reformer, to head that new board at the 
insistence--at the insistence--of the accounting industry. If this is 
true, it means Harvey Pitt intends to let the same accounting industry 
insiders, who ran Enron and other corporations into the ground, run the 
new board that is supposed to prevent future Enrons.
  Now, as our markets plummet and people are losing their savings, 
their jobs, and their confidence, this administration is again 
proposing the wrong remedies. Even now, they are calling to make the 
tax cut permanent. Regardless of how you feel about that as a policy 
proposal, everyone should be able

[[Page 20644]]

to agree that new tax cuts in the year 2011 will have no immediate 
effect on our economy. In fact, by piling on another $4 trillion in 
debt during the next decade, it could hurt our economy in the short 
term by pushing up long-term interest rates.
  Last week, House Republicans pushed through the Ways and Means 
Committee a completely ill-timed increase in the capital loss limit. 
Coming at this moment of intense market volatility, it is likely to 
cause wealthier investors to sell their stock, thereby forcing the 
market down and forcing down the value of 401(k) and other investment 
accounting even more.
  When it comes to dealing with our economy, the President, his 
advisors, and congressional Republicans have put forward two kinds of 
ideas: old ideas and bad ideas. They have been wrong at every turn. And 
this dramatic failure of economic leadership is doing real harm to 
America's businesses and to the economic security of average working 
families.
  America deserves better leadership, better ideas, and a real debate 
about economic future in this country. Democrats believe there are five 
areas in which we can take quick action to help our economy in the 
short term. These are areas where there should be absolutely no 
disagreement.
  First, we should extend unemployment insurance. During the first Bush 
administration, Democrats and Republicans agreed to extend unemployment 
insurance three times. We were able to agree that extending 
unemployment benefits was the right approach to a Bush recession then. 
We should be able to agree that it is the right approach to a Bush 
recession now.
  Second, we should provide immediate fiscal relief for States. Right 
now, States are facing severe budget shortfalls, and many are finding 
themselves forced to cut crucial services, such as education, health 
care, and transportation.
  As Paul Krugman wrote in the New York Times, aid to the States will 
``do double duty, preventing harsh cuts in public services, with 
medical care for the poor the most likely target, at the same time that 
it boosts demand.''
  Third, we need to increase the minimum wage. The minimum wage has 
lost significant purchasing power since it was last increased in 1996. 
Raising the minimum wage is not only a statement of our strongly held 
belief that people who work full time should not live in poverty, but 
by putting money in the pockets of people who are most likely to spend 
it, it is a strong stimulus as well.
  Fourth, we need a strong bill to protect pensions. Democrats have a 
plan that allows workers to hold employers accountable and helps 
workers get their money back if the people responsible for protecting 
their investment abuse that trust. It makes it easier for workers to 
sell their company's stock and diversify their holdings, and it gives 
workers access to independent, unbiased investment advice.
  We should be able to reach quick agreement and pass a bill that 
includes these elements.
  Fifth, we need to make sure that the strong corporate accountability 
bill we designed, defended, and passed is strongly enforced. The 
centerpiece of this legislation is an effective, reform-oriented 
accounting oversight board. It is time for the administration to demand 
that a strong leader is chosen in order to make this a strong board.
  In addition, we should consider some fresh new ideas about how to get 
our economy moving again.
  Last Friday, Senator Dorgan and others hosted a bipartisan economic 
forum. Unlike the White House economic summit this summer, we heard 
from people across the political and ideological spectrum. It was a 
shame the White House decided not only to decline our invitation to 
participate but to dismiss the forum as a publicity stunt because there 
were a number of interesting ideas discussed.
  For example, one participant raised the possibility of a second 
rebate, one that would go to everyone who pays payroll or income taxes, 
and time-disbursed spending around the holiday season. It was also 
suggested that we look to improve the investment incentives we enacted 
earlier this year.
  The problem with allowing businesses 3 years to take advantage of a 
tax break on new equipment purchases is that many have chose to do what 
we said they would do, they have chosen to wait. Because we want 
businesses to invest now, one of the panelists suggested making the 
investment incentive more immediate but more generous.
  Earlier today, Minority Leader Gephardt laid out a series of other 
ideas, including a rebate aimed at lower and middle-income Americans, 
investments in school construction, antiterrorism, and help for States 
as they struggle with the health care crisis.
  These are all ideas that deserve a fair hearing. We should have a 
real discussion about them, and other ideas, to help our economy in the 
short term. But we also need to focus on the long term.
  As a result of what the President has signed into law, or is 
currently proposing, our projected surplus of $5.6 trillion becomes a 
$400 billion deficit. The baby boomers are getting ready to retire.
  This administration did not invite Democrats to their economic 
summit, and they did not want to attend our economic forum. This 
administration needs to realize we are all in this together, and the 
only way we will spark our economy in the short term and strengthen it 
in the long term is by doing it together. Whether that conversation is 
part of a real economic summit or part of some other forum, it is a 
conversation that needs to happen.
  For the last month and more, the country has been completely consumed 
with the debate about our proper course in Iraq. Because that debate 
was about issues of war and peace, and America's national security 
interests, it was altogether appropriate that we should have a 
completely focused dialogue. The President asked for that dialogue, and 
he demanded we have it before the election. We have met his demand. But 
the American people have their demands as well.
  People are anxious, not just about their security against an 
international threat, but about the security of their jobs, the 
security of their retirement, the security of their health, and the 
strength of our national economy.
  By virtually every measure, the President's economic plan has put 
America on the wrong track. He cannot escape responsibility by blaming 
the previous administration. He has had almost 2 years to generate a 
recovery. His economic team cannot divert attention with out-of-touch 
happy talk or appeals to one or two positive economic indicators. 
People see their income falling, their jobs disappearing, their 
retirement funds declining, and the cost of health care rising.
  We have given the American people the debate the President says they 
need with regard to Iraq. Now the President should give the American 
people the other debate they are saying they want: a serious debate 
about their economic future.
  I yield the floor.
  Ms. STABENOW. Will the majority leader yield for a question?
  Mr. DASCHLE. I am happy to yield to the Senator from Michigan.
  Ms. STABENOW. Mr. President, I thank the leader for refocusing on the 
critical issues of economic security at this time. When I am home in 
Michigan, there is no question that while people are concerned about 
national security, the issues in front of them every day--economic 
security--are at the top of their list.
  I also appreciated his focus earlier this year on the issue of 
lowering one of the biggest costs for our seniors and small businesses 
and farmers, everyone in the economy, which is the cost of prescription 
drugs.
  I am wondering, as you were talking about the President--now going on 
a 14-day trip in terms of campaigning--if you might agree that even 
just picking up the phone and asking the House of Representatives to 
take up the bill that we passed, S. 812, which would create more lower-
cost drugs through generics and open the border to Canada and do a 
variety of things that would lower the prices, wouldn't be something we 
could call upon the President

[[Page 20645]]

to do? And wouldn't it be true if we were simply to have the House pass 
that bill we passed this year, the bill that would create more 
competition and lower prices, we could help our families and businesses 
tremendously by lowering the prices of prescription drugs, which are 
one of the main explosions of cost to our families?
  Wouldn't you agree that would be an important focus between now and 
when we leave?
  Mr. DASCHLE. Mr. President, I thank the Senator from Michigan for 
calling attention to yet another economic issue that could have 
profound consequences on the ability the average working family has 
today to pay their bills and to keep their standard of living. As she 
and I have traveled the country, and certainly traveled our States, the 
issue of the cost of prescription drugs comes up over and over again.
  The Senate passed a prescription drug bill that would reduce the cost 
to every single person purchasing drugs today. It sits languishing in 
the House of Representatives. I hope the President will do as the 
Senator suggests. I hope he will pick up the phone from Air Force One, 
since he is traveling all over the country, and tell the Speaker: Pass 
the bill, give us some real opportunity for relief this year. That, to 
me, would be one of the many things he could do to bring about longer 
term economic security.
  The House also did real damage earlier this year. No one has looked 
at the bill, but I hope some day somebody will write the real story 
about the atrocious legislation passed by the House in the name of 
prescription drugs benefits. Basically, as the Senator from Michigan 
knows so well, because she has become such a leader on this issue, the 
House of Representatives has turned over prescription drug coverage for 
seniors to HMOs. Given the horrific examples of abuse in our health 
system today, in large measure because of abuse by HMOs, can you 
believe anybody would say, well, that is enough. We are now going to 
turn over drug coverage for seniors to HMOs, to the private sector, to 
people who simply are unable to live up to the expectations of all 
seniors, of the American people?
  Again, the Senator makes a very important point. We have not been 
able to address prescription drugs this year, in part because of their 
determination to turn over responsibility for drug coverage under 
Medicare to HMOs and their unwillingness to deal with the generic 
legislation passed in the Senate by an overwhelming margin last summer.
  I thank the Senator for asking the question.
  The PRESIDING OFFICER. The Senator from Oklahoma is recognized.
  Mr. NICKLES. Mr. President, I wish to make a couple of comments. 
Parliamentary inquiry: Are we going to be in morning business until 3?
  The PRESIDING OFFICER. The Senator is correct.

                          ____________________