[Congressional Record (Bound Edition), Volume 149 (2003), Part 1]
[Senate]
[Pages 546-548]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              THE ECONOMY

  Mr. DOMENICI. Madam President, I note that we have a little time 
before we are hopefully going to move on to the appropriations bills. I 
am very hopeful that the appropriations leaders, under the leadership 
of our new leader and Senator Daschle, will come forward with an 
approach that will permit us to wind up the business from last year 
that we have not finished yet.
  That brings to mind the business of the year we are in, which we 
should be working on but cannot because we have not finished last 
year's work. So that is why we are doing it now.
  The President of the United States is going to speak to the American 
people a few nights from now, and what most Presidents do, and the 
Cabinet members who work for the President, is sometime before the 
State of the Union they start talking to the American people about the 
principal problems

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that our Nation has and they throw out the ideas they are considering.
  Consistent with that, everyone knows the American economy is, at 
best, a growth economy without new jobs or an American economy that has 
not come out of a recession. It looks as though it is the former rather 
than the latter, because if our method of measuring things is correct, 
we are growing. That is, the gross domestic product is getting a little 
bigger every month and in a year it will be significantly bigger.
  Let us start by defining how big is the gross domestic product. The 
sum total of all actions that are worth anything in America, that is 
the gross domestic product: $10 trillion. We cannot even understand how 
big $10 trillion is. Later in the year, we will compare it with other 
countries'. I surmise it probably is big enough so that it is bigger 
than all of Europe's. We could probably add in China, South America, 
and a couple of more countries, and it is probably still bigger than 
that.
  For about 10 years, the economy not only was growing but it was 
adding jobs. As that happened, it miraculously started producing 
substantially more revenue than we had predicted.
  Nobody has come to the floor nor have I heard anybody nationally tell 
us why it produced so much more revenue than we anticipated. Revenue is 
a substitute word for taxes, tax receipts. We did not know why, but it 
produced billions of dollars in taxes that we did not expect. So that 
is why we got a balanced budget ahead of schedule; tax revenue came in 
about $60 billion more than we expected. So we got a balanced budget 3 
years before we predicted, for which we all took credit. President 
Clinton took credit. Budget Committee Chairman Domenici took credit. 
Everybody took credit. I was chairman of the Budget Committee and we 
got four balanced budgets. Most of it came because we held expenditures 
down rather reasonably--not as much as we should have, but the revenues 
came in rather soundly on the high side.
  Then what happened was the economy went through one of the smallest 
recessions in modern times. By that I mean, how many months did the 
economy stay in the red in terms of the growth in domestic product? How 
long was it shrinking instead of growing? If it shrinks for very long, 
people go out of work, companies do not sell their product. In other 
words, things that create wealth are not happening when it is 
shrinking.
  So it was shrinking, but only for a short period of time, and then 
the measurement of the growth started going up. As a matter of fact, 
right now we are told that the economy is growing at about 3.5 or 4 
percent. But people in this economy are not being hired, so 
unemployment is not going down, it is going up slightly.
  For those who say how bad it is, obviously it is terrible when any 
American is out of work, but 6.1 or 6.2 percent unemployment is seen as 
high unemployment only in the last 12 or 15 years. Prior to that, 6, 
6.5, 7 percent was pretty good in the American economy. We have grown 
to expect better of it, but certainly it is not in a state of 
depression. People in this economy are not being hired because 
something is happening internally that is different. It may be the huge 
drop in the stock market has something to do with it.
  We cannot say that for certain. People do not want to believe that. 
Powerful thinkers say it really is not, but I think probably it does 
have something to do with it.
  In addition, investment by businesses produces wealth, so they can 
hire more people. What do I mean? A filling station owner buys another 
filling station and invests $350,000, and he hires 12 full-time people. 
That is an increase. To get there, he had to put money in it. Money is 
not being invested in new actions that cause people to be employed.
  What we have to do is take this giant economy, $10 trillion, and give 
it a kick by putting some more money into it. That will make these 
transactions start moving again. Anyone who comes to the Senate saying, 
let's have a tiny package, the President's package of $600 billion over 
10 years is too much; so, what do you want? Say, $100 billion. Of that, 
how much goes into the economy to be spent? Well, $60 billion. And you 
think $60 billion will kick the economy so it will grow $10 trillion 
with $60 billion? The economy will not even know it happened. $60 
billion is a mouse. The economy does not need a mouse giving it a kick. 
The economy needs an elephant and a donkey and some cars to run into 
it, give it a real kick. It has to have real money, not little tiny 
boxes of raisins.
  One time someone wanted to start the economy up, some president 
wanted to give everyone a bit of money and it was so small that one 
Senator said, don't bother with it. The Internal Revenue can just get 
up on top of buildings and drop $50 bills and people will pick them up. 
Sure, they will spend them. That is the real way to stimulate the 
economy. Of course, we did not do that.
  I am talking about how much. The President's numbers of $660 to $700 
billion over 10 years is said by Senators on that side to be way too 
much. Way too much for what? The deficit will get too big. Would you 
like the economy to stay like it is, in a state of neutrality where it 
is not generating any revenue? If that is the case and you want to get 
into balance, you have to cut everything 10 or 15 percent. America last 
reduced its budget in a recessionary period when Hoover was president. 
That is now known as Hooverism. Or Hoover economics. Great man. Solid 
economist. Great geologist. A great idea. Except when the economy is 
not going, you do not cut the budget, you spend on the budget or you 
cut taxes.
  We will be spending, do not worry, because we are in a war. But you 
have to put tax cuts in place so the Government puts money in the hands 
of people; money they would not otherwise get. If they are already 
going to get it, you do not give it to them because that money is 
already in the economy. So you give them money they are not going to 
otherwise get. Cut their taxes, change the marriage tax penalty so they 
keep more money, reduce the brackets so you are in a lower bracket and 
you keep more money from withholding, and if you are a businessman you 
do not spend so much.
  I urge Senators, particularly on our side of the aisle, if they want 
to express their concerns about certain items in the President's tax 
package, so be it. But clearly we ought to keep our minds open to the 
size of the package needed. Republicans should not come out of this 
Congress on the side of being cautious about stimulating the economy. 
We should come out of this session saying, if people want to be 
cautious, let it be them. If the economy does not get better, they did 
it. We should forget that and go with a big package that is apt to give 
the economy a real kick. Nobody knows the exact numbers. Nobody knows 
if $600 billion, with $150 billion in the first year, is right or too 
much. But clearly we ought to not be so cautious that we do not do 
enough. If that is the case, the tax cut will be wasted, the deficit 
will not change, and we will need more stimulus the next year.
  I say to those who want the economy not only to grow but to create 
jobs, keep your powder dry on the size of the stimulus.
  It ought to be big, not little. It ought to get into the hands of the 
maximum number of people as early as possible. If there is some way to 
generate interest, real, genuine interest, in investing on the part of 
the public, do it.
  For instance, perhaps people could depreciate equipment they bought. 
Buy a car, depreciate it in 3 years. Let consumers depreciate in one 
year, they might buy a car every year. That is a bottom line entry. 
This is in the President's package. One of them is in; accelerated 
depreciation.
  I suggest on our side if we want to get the President's package, and 
if Democrats want to stimulate the economy, to produce jobs, we should 
work with the President and with the Budget Committee. The new Budget 
Chairman is Don Nickles. I did that for 17 years and now I will try 
something else. But, I will help him do that, like a lot of other 
people.
  That blueprint picture ought to end up reflecting people in the 
Senate who are concerned about jobs for people. So much talk about rich 
versus poor. If you are not for help with jobs, I don't know who you 
are for. If you are for a packaging that does nothing to create

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new jobs, who are you for? We want to be for a package, and I hope 
everyone does, that creates jobs and maximizes opportunity to create 
activity within this gross domestic product, that will, through new 
motion, create investment and jobs.
  I yield the floor.

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