[Congressional Record (Bound Edition), Volume 149 (2003), Part 1]
[Senate]
[Pages 526-528]
[From the U.S. Government Publishing Office, www.gpo.gov]




                     THE PRESIDENT'S STIMULUS PLAN

  Mr. CORZINE. Mr. President, I come to the floor this morning to speak 
once again on last week's proposals by the President with regard to the 
so-called stimulus plan. I think this is one of the very most important 
things we need to be debating right here on the Senate floor.
  As the President and most of the Members of the Senate know, we just 
had another announcement of unemployment last week. We are at an 8-year 
high, 6 percent. We lost another 100,000 jobs in December. The number 
of people who are going on long-term unemployment without unemployment 
benefits is roughly 100,000 a week. Our capacity utilization is about 
74 or 75 percent, well below historic averages. There is a real problem 
in our economy. We do not seem to put together our actions and our 
words.
  I have heard some of my colleagues label the President's so-called 
stimulative program an economic sedative package. I don't know whether 
it is a sedative or not, but in my view it borders on antigrowth, 
antijob. It certainly is anti-State.
  Without any question, from most people's perspectives, it has some 
serious distributional issues. If you believe

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rising tides lift all boats, one wonders why we are targeting all of 
this stimulus, a significant portion of these benefits, to a very 
narrow segment of America's population.
  Finally, maybe the most serious issue, it is reckless if you look at 
it in the long-term fiscal context. We are talking about taking another 
almost $1 trillion out of the fiscal flows that our Federal Government 
will receive to fund tax cuts and fund them at a time when we are 
approaching a war in the Middle East, when we have serious 
international challenges in North Korea, we have a tremendous need to 
make sure that our people here at home are secure. Homeland defense we 
hear talked about and talked about, and then we are not necessarily 
providing the resources to the first responders to make it happen.
  Whether it is a sedative program or not, I think it is close. I don't 
think it is a stimulus. I don't think it is fair. I actually think it 
is reckless and imprudent with regard to our long-run fiscal health.
  Let me go through a few points because I gave a rather lengthy speech 
last week with regard to a lot of these elements, and in more depth. 
That is in the Record. But I think it is important we have a repeated 
focus on the need to get stimulus into our economy and get our economy 
growing again, and I don't think this does it.
  First of all, 90-plus percent of this program gets implemented after 
2003. The need in the economy is today--the people who are losing their 
jobs or have lost their jobs, and see the weakness in the economy. It 
is today. Again, 190,000 jobs were lost in the last 2 months. The 
President has talked about creating only 190,000 new jobs in 2003. I 
think that speaks to how much focus is in the near term. I think it is 
absolutely essential to get going.
  But that is not the real issue. Well over 50 percent of this program 
is in the dividend exclusion. Dividend exclusion puts money into a 
targeted, narrow segment of the American population in serious 
proportions. I will get to the fairness issue in a little bit. But the 
most undermining element of this program is it does something very 
simple; it takes cash off the balance sheets of corporations. If 
corporations are going to invest in jobs, if they are going to sustain 
jobs, if they are going to invest in new plant and equipment, how do 
they do that? They do it with the resources they have on their balance 
sheet. That is cash. That is what they have to have when they go to the 
bank to extend their ability to invest. That is how business works. If 
we are going to take cash away from corporations, how are they going to 
invest in growing America's economy?
  Sure, some of the dividends are going to go through a process that 
then will allow them to trickle back into the economy somehow or 
another. Some economic theorists say we will have more particular focus 
or the best rate of return investments, but the fact is, our 
corporations are going to have less money to be able to expend on 
driving our economy. That is antigrowth. It is very clear and very 
simple. I believe this is its major flaw, given that this is the 
centerpiece of this argument the President is making.
  The third piece is also very clear. Our States are in fiscal 
distress. Everybody knows it. I am sure the Presiding Officer knows his 
State is suffering from fiscal strain as well as anyone else. I know he 
has a high unemployment rate. I am sure the Medicare rolls are growing 
as is the need for charity care in our hospitals. Our school systems 
are stretched to meet mandates that we put down, the Federal 
Government, whether it is special education, IDEA, or now the Leave No 
Child Behind Act.
  The fact is, we here in Washington put requirements on our States and 
they are running very large deficits. They have a constitutional 
responsibility to not run deficits, to run balanced budgets. So what 
are they doing? They are raising taxes. In the State of New Jersey, we 
just raised our property taxes. In some areas it is a 15-percent 
increase, in some a 2- or 3-percent increase, but the average is 7-
percent increases. That goes to the middle class. Those are the people 
who actually need it and, by the way, are getting virtually nothing out 
of this dividend exclusion.
  Here we have rising property taxes or cuts in services at our State 
level: $950 billion is the cumulative deficits of our State governments 
as we approach this coming year, and that is a major league drag on our 
economy. We are only putting in about $650 billion from this package 
that the President has proposed. I say that is antigrowth.
  For the reasons I have discussed, this is a bad plan with regard to 
whether you are stimulating the economy or whether you are doing what 
the White House says, trying to create a growth plan. There is no way 
it is going to be stimulative when we are emphasizing raising taxes at 
the State and local level because the Federal Government is not 
accepting its responsibility when we are taking all this cash off the 
balance sheets of corporations that would be reinvested in the economy 
and when we are putting so little money into this year.
  For all those reasons, this is clearly either a sedative or, I think 
even more seriously, an antigrowth problem.
  On the fairness issue, you don't have to be into class warfare to say 
it is going to a very narrow segment of the economy. Let me give some 
statistics. The 10-year benefit of this proposal the President laid 
down, for people who make $1 million or more, is $900,000. That is what 
it is over 10 years.
  For people, at least in New Jersey, who sort of consider themselves 
in the middle class, those earning $75,000 to $100,000 in adjusted 
gross income, the benefit is $18,500. That is 2.5 percent of what is 
going to the people at the top.
  If you were in the more national average of what middle class is, the 
$30,000 to $40,000 range, it is $3,500 over 10 years.
  And if you are one of those struggling at the bottom of our income 
classes--you are under $20,000--this is worth $50 over 10 years because 
you don't get the child tax credit the President is talking about. You 
didn't pay taxes. It doesn't mean anything to those people who would 
spend the most. It is not a refundable child tax credit, marriage 
penalty, all those things--they don't apply here. So we are leaving out 
broad swaths of our national population as we deal with how you are 
going to distribute this.
  By the way, one wonders how many of our men and women who are going 
to the Middle East to surround Iraq, who sit on the border of North 
Korea, the 37,000 American troops, are going to benefit from a dividend 
tax exclusion. I find it very doubtful. In fact, I am going to come 
back to the floor with some very precise numbers.
  What we are doing is rewarding those who are already doing well. And 
there is nothing bitter about people doing well. There were more 
millionaires made in the 1990s than there were at any time in the 
history of the country. But what we are talking about is just simple 
fairness. By the way, the people who are in the middle class and 
struggling to make ends meet in this country are the people who will 
spend money and drive the economy. They fill up that excess capacity.
  There is a major fairness issue that once again ties to economic 
growth. I think we have an antigrowth package here, and it is pretty 
clear by any simple analysis of who spends money and drives the 
economy.
  Finally, you can't get away from the serious considerations of long-
term undermining of our fiscal health. We are going to put ourselves 
into a bad position. We already have taken $5.5 trillion off projected 
estimates of where our budget will be 10 years out--just, by the way, 
at the time the baby boomers are retiring and Medicare and Social 
Security will be at their greatest stress points. We are running 
deficits that are growing and growing and growing, and they are going 
to continue to grow. We are making that process worse. It is not $675 
billion, because you have to put the interest against what you pay. 
That is another $300 billion over 10 years.
  I know people are going to talk about dynamic scoring. I tried to 
deal with this by speaking to why I think this is antigrowth. The fact 
is, we are not putting money in the hands of people who

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will turn around and spend it, and those estimates I think are risky to 
make. The fact is, we are putting in place a serious undermining of the 
revenues of this country at a time when we are talking about going to 
war. It is impossible to understand, in my mind, how we can take such 
an imprudent step of undermining the fiscal health of this country at a 
moment in time when the American people expect us to be protecting 
them, expect us to be supporting those people who are out there 
defending us, to make sure they have the equipment and all the kinds of 
things that will make a difference.
  We are talking about a tax cut that goes almost entirely to the very 
high income people in this country. That is not class warfare. That is 
just telling it like it is with respect to how we are shaping our 
economic policy in this country. I think it has failed. I think it will 
fail. I hope we can have a real debate here on the floor of the Senate 
about how we can get our economy going. I think it is great that the 
President recognizes we have a problem. He clearly believes that. He 
changed his whole economic team and came out with a second stimulus 
plan. We need to get this economy moving so that it supports our 
national economic health here at home. That is not being done by this 
program. It is a sedative program, if not worse. It is antigrowth. It 
is certainly a mistake, and I hope I can come up with some of these 
figures just thinking about how many of our military men and women are 
going to benefit from a tax exclusion on dividends. I think it is 
misplaced. I think the American people know it is misplaced.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Bunning). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DASCHLE. 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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