[Congressional Record (Bound Edition), Volume 150 (2004), Part 3]
[Senate]
[Pages 2906-2908]
[From the U.S. Government Publishing Office, www.gpo.gov]




                    PRESIDENT BUSH'S ECONOMIC POLICY

  Mr. CONRAD. Mr. President, I want to talk for a few moments about 
many of the subjects Senator Byrd addressed. I think this week has been 
a wake-up call to the United States, for the Senate, for the House of 
Representatives, and I hope for the White House, because this week the 
chairman of the Federal Reserve, Chairman Greenspan, as the Washington 
Post headlined from the next morning indicates: ``Fed Chief Urges Cut 
in Social Security.'' The subhead says: ``Future Benefits Must Be 
Curtailed, Greenspan Warns.''
  Chairman Greenspan is talking in this article about the 
overcommitment this country has. He said:

       I am just basically saying we are overcommitted at this 
     stage.

  Chairman Greenspan went on to suggest that he favors making permanent 
the tax cuts the President has proposed. He also says he recommends we 
cut Social Security benefits as one way of beginning to deal with these 
long-term imbalances.
  Not so long ago, the President, in his FY2002 budget, ``A Blueprint 
for New Beginnings'' said:

       None of the Social Security surplus will be used to fund 
     other spending initiatives or tax relief.

  None. Oh, how wrong the President was in that assertion because when 
we look at his budget what we find is he is going to borrow from Social 
Security $2.4 trillion over the next 10 years--$2.4 trillion--and he 
has no plan to pay it back.
  It is very interesting to look at the relationship between the money 
the President is taking from the Social Security surplus over the next 
10 years to float this boat, nearly $2.4 trillion, and to compare it to 
his tax cuts during this same period.
  Notice how similar the figures are. They are almost identical. The 
amount being borrowed from the Social Security trust fund is almost 
identical to the money going out in the tax cuts, primarily income tax 
cuts, that go overwhelmingly to the wealthiest among us, as this chart 
shows.
  This chart shows the benefits of the Bush income tax cuts. What it 
demonstrates is the top 1 percent, those with incomes of over $337,000 
a year, get 33 percent of the tax cuts. That is pretty stunning. Let me 
repeat it. Those who are in the top 1 percent, earning over $337,000 a 
year, got 33 percent of the benefits of the income tax cuts. And now we 
find out it is being financed by taking Social Security money funded by 
the payroll taxes overwhelmingly paid by middle-income Americans.
  This is an enormous wealth transfer from the many to the few. This is 
class warfare writ large. Take from the many, give to the few, and then 
have us head in a fiscal direction that leads the Chairman of the 
Federal Reserve to say, at the end of the day, cut the Social Security 
benefits that were supposed to have been financed by the payroll taxes 
of the people who paid them.
  It is very interesting to see the effect of Social Security on this 
society. Two-thirds of retirees rely on Social Security for more than 
half of their income; 31 percent of Social Security beneficiaries get 
at least 90 percent of their income from Social Security; 33 percent 
get 50 to 89 percent of their income from Social Security.
  If you put those two together, nearly two-thirds of retirees rely on 
Social Security for more than half of their income. We know Social 
Security has been the engine driving people who are Social Security 
beneficiaries out of poverty.
  This chart shows without Social Security, 48 percent of our Nation's 
seniors would be in poverty. With Social Security, only 9 percent are. 
Is anybody paying attention here? We talk about connecting the dots. We 
talk about what has happened with the fiscal policy this President has 
constructed, a fiscal policy that has led to the largest deficits in 
the history of our country, budget deficits that have no end in sight, 
that have led the Chairman of the Federal Reserve to say: Cut Social 
Security benefits but make the tax cuts permanent, and the tax cuts 
have about the same cost over the 10-year period as the amount of money 
that is being taken from the Social Security trust fund surpluses over 
that same period. If we connect the dots, it becomes very clear.
  Middle-class people are paying heavily into Social Security with 
payroll taxes on the promise they will get Social Security benefits, 
but the money is being taken and instead of being used to prepay the 
liability or to pay down the debt to prepare for their retirement, the 
money is being used to finance income tax cuts for the wealthiest among 
us.

[[Page 2907]]

  I showed a chart that demonstrated the top 1 percent, those earning 
over $337,000 a year, get a third of the tax benefits. But it is even 
much more dramatic than that. If you are earning over $1 million a 
year, those who in this country are fortunate enough to earn over $1 
million a year will get a tax cut this year of over $100,000.
  Those earning over $1 million a year will get an average income tax 
cut of over $100,000, and yet we are running deficits that are the 
biggest in the history of the country with no end in sight, so serious 
that the Chairman of the Federal Reserve board says: Cut Social 
Security benefits.
  This is all about choices. This chart shows the cost of the 
President's tax cuts over a 75-year period, $12 trillion. The Social 
Security shortfall over that same period is just under $4 trillion. It 
is a 3-to-1 ratio. The difference between the cost of the President's 
tax cuts over a 75-year period and the Social Security shortfall. The 
Chairman of the Federal Reserve looks at that shortfall and says: Cut 
benefits, but make the tax cuts permanent. That is the logic of where 
the President's budgets are leading, and nobody should be under any 
illusion that is where this is all headed because here is what is about 
to happen.
  This chart is the number of Social Security beneficiaries whose 
numbers will explode with the retirement of the baby boom generation. 
We are going to go from about 40 million in 2005, look at 2045, there 
will be 82 million people receiving Social Security. This isn't a 
projection. These people are alive. They have been born, and they are 
going to be eligible, and the President has no plan, none, to deal with 
it.
  Under the President's budget, we are spending $991,000 a minute more 
than we are taking in--$991,000 a minute. If we look at budget deficits 
and the relationship over a long period of time, from 1969 to this 
year, we can see the deficits in dollar terms are at an all-time high, 
by far the biggest budget deficit we have ever had--$100 billion more 
than last year, and last year was a record.
  Some try to minimize it, saying: As a percentage of our gross 
domestic product, these deficits are not so large. Wait just a minute, 
these deficits are huge by any measure. If you look as a percentage of 
gross domestic product on an operating basis, protecting Social 
Security as it was intended to be, what one sees is this deficit is 
only exceeded once since World War II as a percentage of gross domestic 
product, only exceeded by a deficit of 6 percent of GDP back in 1983.
  The big problem with the President's plan is he is hiding from the 
American people the true effect of his policies. I do not make that 
charge lightly. The President is hiding from the American people the 
full effect of his policies. Here is just one way. Here is what happens 
to his tax cut proposal just beyond the budget window. This dotted line 
is the end of the 5-year period.
  Here is what happens to the cost of the President's tax cut once you 
get beyond the 5-year window. It absolutely explodes. But it is not 
just his tax cut that explodes just beyond the budget window. So does 
the cost of fixing the alternative minimum tax, the old millionaires' 
tax, designed to make certain that people with high incomes paid some 
taxes. And yet that old millionaires' tax is rapidly becoming a middle-
class tax because, as we know, there will be 3 million people affected 
by it now, and at the end of the 10-year period there will be 40 
million Americans affected by the alternative minimum tax.
  The President does something about it for 1 year. He does nothing 
about it for all of the future years.
  This is the pattern of the cost increases to deal with the 
alternative minimum tax, which everybody knows has to be dealt with. 
The President has no plan to do anything about it. It is not just in 
terms of paying the $2.4 trillion he is borrowing from back Social 
Security. He has no plan there. He has no plan to deal with the 
exploding cost of the alternative minimum tax. He has no plan to pay 
the war cost, the war on terror.
  He says we are going to fight a robust battle against terror, but he 
is not going to fund it because he has zero in his budget past 
September 30 of this year. Does anybody believe the war on terror, the 
war in Iraq, the war in Afghanistan, is going to neatly end at the end 
of the fiscal year? Does anybody seriously believe that? That is what 
the President says is going to happen. He says there is going to be no 
cost past September 30, no cost for Afghanistan, no cost for the war on 
terror, no cost for the war in Iraq, none.
  When we ask him how can that be, his response is, gee, I really do 
not know what the cost is going to be. Well, the right answer is not 
zero. The right answer is not no cost.
  The Congressional Budget Office tells us the cost is going to be $280 
billion, but the President does not acknowledge that cost. It is no 
wonder that he is able to say he is going to cut the deficit in half in 
5 years. He just does not count things. He does not count the war cost. 
He does not count dealing with the alternative minimum tax crisis. He 
does not count paying back the $2.4 trillion he is taking from Social 
Security, every penny of which he has to pay back but none of which he 
has a plan to do.
  The President says he is going to cut the deficit in half in the next 
5 years. We have gone back and included the cost of his war policies, 
his tax cut proposals, and the alternative minimum tax, just those 
three areas. What emerges is a more realistic view of where the deficit 
is headed. As we can see, there is no cutting the deficit in half.
  In fact, we do not see the deficit ever getting below about $600 
billion. That is a realistic expectation, instead of what the President 
is telling the American people.
  Here is what is happening to the debt: The gross debt of the United 
States is absolutely exploding, at the very time the President promised 
us he would have maximum paydown of the debt. Remember 2001, that is 
what he told us, that he would have maximum paydown of the debt. 
Instead, the debt is exploding from some $6 trillion in 2001 to $15 
trillion by 2014.
  This chart is one of the most sobering of all. The green bars show 
the Social Security trust fund, the blue bars the Medicare trust fund, 
and the red bars show the tax cuts already enacted and those proposed 
by the President. What this shows is right now we are being buffered 
from the full effect of what the President has proposed by the 
surpluses in the trust funds.
  Look what happens when those trust funds go cash negative out in 
2016. At that very time the cost of the President's tax cut proposals 
explode, driving us right over the cliff into deficits and debt never 
before seen in this country. Do not take my word for it. Here is the 
Congressional Budget Office report on the long-term budget outlook 
showing the President's tax cuts exploding the deficit at the very time 
the baby-boomers retire. This is not just reckless and irresponsible. 
It is wildly reckless and irresponsible.
  This is what happens under the President's scenario. Where is the 
money coming from? Well, he is going to borrow $2.4 trillion from 
Social Security with no plan to pay it back, but that is not the only 
place he is borrowing. Now he is borrowing from countries all over the 
world. We are into Japan for over $500 billion and this is from 2003. 
We know this is a much higher number now because Japan is buying 
dollars at a furious pace. So is China. We are into them for over $140 
billion, and that number would be much higher if we had a current 
number. We borrowed $62 billion from Caribbean banking centers. We are 
in hock to Hong Kong for $56 billion, to Taiwan for $46 billion, but we 
have even borrowed $43 billion from South Korea.
  When I was growing up, if anybody had told me America would be having 
to borrow money from South Korea, that we would be having to be 
borrowing money from Japan and China, why nobody would have believed 
it. But that is what is happening.
  This was the President's statement just the other day in Louisville, 
KY:

       We've got plenty of money in Washington, DC, by the way.

  This is not the statement of a serious person, ``We've got plenty of 
money in

[[Page 2908]]

Washington, DC, by the way.'' That is not the statement of a serious 
person when he is running the biggest deficit in the history of the 
United States of America, with no end in sight, and his proposal is to 
dig the hole deeper, to have no more spending and cut the revenue even 
more when we already are running record deficits, right on the eve of 
the retirement of the baby boom generation.
  This President tells the American people that we have plenty of 
money? The only reason there is plenty of money is because he is 
borrowing it from every place that he can find somebody who will loan 
it to him.
  There is $2.4 trillion being borrowed from the Social Security trust 
fund with no plan to pay it back, and now Chairman Greenspan warns that 
the over commitments are so large that Social Security benefits ought 
to start being cut.
  That is the logic of the President's course, and it is a disastrous 
course. It is one that risks the economic security of this country. It 
is one that risks putting upward pressure on interest rates that will 
choke off economic growth, that will cost this Nation even more jobs, 
and force this Congress and a future President into the most 
excruciating of choices.
  This is a reckless course. This is not conservative. This is radical. 
It is reckless and it has to be stopped.
  I yield the floor, and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant journal clerk proceeded to call the roll.
  Mr. HARKIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HARKIN. Mr. President, parliamentary inquiry: Are Senators 
allotted a certain amount of time?
  The PRESIDING OFFICER. The Senate is in morning business. Under the 
previous order, there is no time limit.
  Mr. HARKIN. I thank the Presiding Officer.

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