[Congressional Record (Bound Edition), Volume 149 (2003), Part 7]
[Senate]
[Pages 9389-9391]
[From the U.S. Government Publishing Office, www.gpo.gov]




                 THE BUDGET CONFERENCE AND OUR ECONOMY

  Mr. DORGAN. Mr. President, I wanted to make a comment about what I 
have been reading this afternoon and hearing most of today about a 
process by which the budget conference is going to cobble together a 
compromise and bring it to the House and the Senate, with the prospect 
of having the Senate have its arms tied behind its back procedurally in 
order to accomplish a very large tax cut.
  Now, what I do not understand is this: We have an economy that 
everyone understands is in some significant trouble. We have a fiscal 
policy that does not add up.
  About 2 years ago, the President said he wanted a fiscal policy with 
a very

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large tax cut, $1.7 trillion. Some of us said: Well, what we ought to 
do is be a little careful and be a little bit conservative because we 
don't know what is going to happen in the future.
  The President said: No. What we have are budget surpluses as far as 
the eye can see, and we ought to give that money back.
  I said: I believe we ought to provide some tax cuts, but maybe we 
ought to be a little bit conservative. Who knows what is going to 
happen in the future.
  Well, the President won the day on that, and we had the tax cuts. And 
then we ran into a couple of problems: One, a recession; two, the 
terrorist attack of 9/11, which was devastating both with respect to 
loss of life and also this country's economy.
  Then we had the largest corporate scandals in this country's history. 
We had a pancaking or a flattening of the stock market, a collapsing of 
the technology bubble in the stock market.
  All of these things came to the same intersection at the same time 
and have caused enormous problems for this country's economy.
  Some people say none of that matters. The medicine is still the same 
no matter the circumstance. I submit, when your economy is sluggish, 
and people are concerned about the future, they don't have the kind of 
confidence you would expect about the future--confidence is, after all, 
what allows this economy to grow--that you ought to take a look at the 
fiscal policy and see if you can construct a policy that adds up.
  Let me describe where we are today.
  Two years ago, we had projections that we would have budget surpluses 
for the next decade--every year, big budget surpluses.
  Well, 2 years later, guess where we are. This year, we have a 
projected $460 billion budget deficit. Under this fiscal policy, this 
Government spends almost $1.5 billion a day more than it takes in--
every single day, 7 days a week. People say it does not matter.
  We send our sons and daughters off to war. And those brave souls have 
performed in a way that make all of us proud. But are we saying to 
them: ``Go fight this war and come back and we'll allow you to bear the 
burden of the costs. We will allow you to bear the burden of paying off 
the debt''. That is what this fiscal policy does.
  Some will say the budget deficit is only $300 billion. That is not 
true. One hundred sixty billion is the Social Security trust fund. That 
belongs in the trust fund. You can't use that to counter the deficit. 
Our budget deficit right now is $460 billion.
  What is the solution? The majority party says the solution is to 
cobble together a budget that looks like Disneyland to me in its 
construct, that says what we ought to do is have larger and larger tax 
cuts. Why? Because it is a growth policy.
  The only thing that is growing in this economy is the Federal debt. 
The budget that left the Senate--I will bet not many Senators know 
this--which had the lower tax cut number in it, $350 billion over the 
next 10 years, proposed on page 6 that at the end of 10 years we would 
have a $12.9 trillion debt. I wonder if people know that.
  Will it grow the economy? No, it is not going to grow the economy. 
This fiscal policy is going to grow the Federal debt, from just over $6 
trillion to nearly $12 trillion in 10 years.
  I come from a small town, but we know how to add and subtract. That 
isn't progress, not for this country.
  What is the construction of all of this? The construction is to say, 
it is a troubled world, we need more defense spending, a lot more. Most 
Members have decided, yes, we should do that; it is a troubled world; 
we are threatened by terrorists; we need more spending to protect the 
homeland--homeland defense it is called, and most Members say yes; I 
say yes to both of those. So higher homeland security and defense 
spending, and then very large tax cuts, and then saying: Let's shrink 
the domestic discretionary spending; let's decide to shrink that.
  I was at one hearing today--one example of dozens--on shrinking 
spending: Let's cut spending for young American Indians going to tribal 
colleges to try to better themselves through education. That is what 
they propose. We will shrink spending for that. Does that make any 
sense?
  I told a story this morning about a young woman named Loretta--
someone I have been privileged to know. She grew up in a pretty 
troubled circumstance. She was shy, stuttered, had a baby out of 
wedlock, got into lots of trouble. She found her way back. This young 
woman went to a tribal college on an Indian reservation, got an 
education, had the support of an extended family for childcare and the 
kinds of things you can get support for when you are going to a tribal 
college on the Indian reservation. That young woman who started out in 
such a difficult situation is now called Doctor. She went to school. 
They called her a savage. She had a very troubled beginning. But now 
she is a Ph.D.
  Do tribal colleges work? Does it matter? Does it make sense? Is it an 
investment in life that makes sense? The answer is yes.
  So if the construct of the fiscal policy says, let's add for defense 
and homeland security, and we all agree to that, and let's have very 
big tax cuts, and then let's cut programs such as tribal colleges that 
give some of those young American Indians an opportunity, if that is 
the construct, I say this country is not investing smartly. I would 
much sooner provide an opportunity for those young kids to go to 
college than provide a tax cut, on average, which will be $80,000 a 
year for the American who earns $1 million a year in income. At a time 
when we have a $460 billion annual budget deficit--yes, it is that 
unless you take the Social Security trust fund and use it as it has 
been misused--we say we will just take this out of the hide of some 
programs that really help people. I don't think that makes any sense. 
By the way, we will have to do that in order to pay for very large tax 
cuts. That doesn't make sense either.
  I don't know what happened to conservatism. I thought being 
conservative meant that you did not want to see this runup in Federal 
budget deficits, you did not want to end up in 2013 with a $1.9 
trillion Federal debt. Yet that is where we are headed. That is on page 
6 of the budget report that enough of my colleagues voted for to send 
it on to the House. Coming back, it will be worse. Coming back, I 
guarantee you that on whatever page they list public indebtedness, it 
will be higher than $11.9 trillion, if they come out with the House 
number rather than the Senate number on tax cuts.
  I don't understand the rationale. We have Nobel laureates, some of 
the top business men and women, we have almost anybody who looks at 
this fiscal policy through a lens other than the rose-colored lens of 
politics saying: This is crazy. This doesn't make any sense. It doesn't 
add up. This fiscal policy is going to steer this country in a way that 
will prevent us from having economic growth.
  It is interesting to me that this fiscal policy is always described 
as the growth plan. Even the nonpartisan Congressional Budget Office 
says this is not going to grow the economy. The only thing it is going 
to grow is the Federal debt, doubling it from $6 trillion to $12 
trillion. I don't understand. And perhaps some will say: You don't 
understand; this is a new approach. But it is really not even new. 
Twenty years ago we did this. Then the fiscal policy was to say, let's 
double defense spending and cut taxes, and somehow it would produce 
more revenue and add up.
  The fact is, we ended up on the road to $6 trillion in additional 
indebtedness. Then, through a series of good fortunes, this country saw 
its economy begin to pick up steam once again, and we saw a whole 
series of things happen, with massive creation of new jobs and growth. 
Then we began finally to create budget surpluses.
  At that moment, very quickly eyes began to water; everybody began to 
salivate over the surpluses: What can we do with the budget surpluses? 
The President said: It is their money; it belongs to the American 
people--he is right about that--so the surplus should go back to the 
American people.
  But some said: Let's not lock in place a tax cut so large for 10 
years that it would put our economy at risk.

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  Never mind, he said.
  So now the question: What belongs to the people? The debt? At $1.5 
billion a day, every single day, $1.5 billion more that we spend every 
day than we take in.
  It is unfathomable that we have seen this juxtaposition in American 
politics that those who say they are conservatives don't worry about 
the debt. But, of course, the evidence is quite to the contrary.
  I am perhaps limited by having taught economics for a couple of 
years. I always point out that although I taught economics, I have been 
able to overcome that experience. The fact is, the study of economics 
is not a science; it is an art. But we know enough about how this 
economy works to understand it works with respect to people's 
confidence. If the American people are confident about the future with 
respect to this economy, they do the things that manifest that 
confidence, and that is the expansion side of the business cycle. They 
buy a home, take a trip, buy a car, make a purchase, and you have the 
expansion side of the American business cycle. If, however, they are 
not confident about the future, they do exactly the opposite: They 
decide not to make the purchase; they postpone the trip; they don't buy 
the car; they don't buy the house. And that is the contraction side of 
the business cycle.
  It is all about confidence. The question raised by Nobel laureates 
and many others, and op-ed pieces, in fact, in the last day or so by a 
bipartisan group of the most distinguished American thinkers, in my 
judgment, is: How can the American people be confident about the future 
of this economy until and unless they see a Congress willing to make 
the tough choices to put this economy back on track and make these 
budgets add up. The easiest political lifting in America, the easiest 
lifting for American politicians, is to say: Let me support tax cuts. A 
more difficult proposition for a politician is to say: Let us make 
tough choices to make sure our budgets add up.
  There is no way that what we are going to be confronted with tomorrow 
morning adds up. The American people know it, politicians know it, 
economists know it, and it is going to erode confidence in this country 
that will, in my judgment, stall and stutter the recovery that we 
expect, need, and deserve.
  I will have more to say tomorrow on this subject. It is a 
disappointing day to know what has happened that will bring the budget 
to the floor tomorrow in such a state that we will hardly give the 
American people confidence about our country's future.
  I yield the floor.

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