[Congressional Record (Bound Edition), Volume 154 (2008), Part 1]
[Senate]
[Pages 467-470]
[From the U.S. Government Publishing Office, www.gpo.gov]




                 SENATE GRIDLOCK AND ECONOMIC STIMULUS

  Mr. DURBIN. Mr. President, I thank my colleague from Texas for 
speaking to a higher level of bipartisan cooperation in the Senate.
  I sensed this in returning to Illinois and out on the campaign trail 
for my colleague, Senator Obama, that this is a sentiment widely 
shared. The American people understand we have a lot of challenges in 
this country, and they also understand it is easy to gridlock the 
Senate.
  We had an all-time record number of filibusters initiated by the 
minority side of the aisle this last year. Sixty-two, I believe, was 
the final count, which eclipsed the 2-year record of 62 filibusters 
that had been prevailing. Certainly, we all know how to stop this train 
in the Senate. Minority rights are well respected by the Senate rules. 
And 15 minutes into our service in the Senate, you might hear the words 
``unanimous consent,'' and realize: Well, I will be darned. If I stand 
up and object, everything stops. And it is a fact.
  Many Senators have used that for valid and invalid reasons, but it 
has been used a lot. We have one Senator on the other side of the aisle 
who takes pride in the fact that he has singlehandedly stopped 150 
pieces of legislation from even being debated and considered on the 
Senate floor. Many of them are not even controversial.
  I hope we find a way around this. I want to respect every Senator's 
right, but if we truly want bipartisan cooperation, there are ways to 
achieve that. Using filibusters would not be that; objecting to bills 
just categorically would not be that approach either. But the one thing 
the American people certainly want us to do is to wake up and smell the 
coffee. And this morning, if you woke up and smelled the coffee, you 
also smelled something burning on Wall Street. What is burning is the 
Dow Jones Industrial Average. I do not know what it is at this moment, 
but it has been pretty awful starting this day, and it has been pretty 
awful for a long time.
  It is interesting in American politics that when I first started 
running for Congress 25 years ago, the most important information for 
most voters was how many people were unemployed. And the monthly 
reports on unemployment really kind of fueled the campaign. If a 
President had more and more people out of work, there was a downturn in 
the economy and a downturn in that President's popularity. That was 
historically the standard. But over time we have stopped talking about 
the unemployment figures as much and tend to watch the stock market a 
lot more.
  I think it has to do with many of us have our retirement savings tied 
up in mutual funds and 401(k)s and IRAs. And so what happens is the 
stock market, at least in the back of our minds, is how I am doing. If 
the stock market is not doing well, my family is not doing well. So 
when the news came out yesterday that the bottom is falling out of 
international markets, and the Dow Jones opens with a tremendous slump 
of 400 points or more, people understand something is not right.
  Last week, the Secretary of the Treasury, Mr. Paulson, called me and 
many leaders in the Senate and all but acknowledged that we need to do 
something, and do it in a hurry, if we are going to try to stop this 
economy from sliding into a recession.
  Well, I agree with him completely. If you look at what we have done 
over the past 7 years, to many of us it is no surprise where we are 
today. There were many on the Republican side who argued for years and 
years, and still continue to argue, that tax cuts for the wealthiest 
people in America are the answer to everything.
  If you have a surplus, you need a tax cut. If you have a deficit and 
need to stimulate the economy, you need a tax cut. You always need a 
tax cut. This kind of moralistic position of cutting taxes for the 
wealthiest people in America has been the basic doctrine of the 
Republicans in leadership for a long time.
  They have had their way: President Bush's tax cuts, even though they 
have generated the highest deficits in our history; a greater 
dependence on foreign countries and foreign capital than ever before; 
the fact that the President made history, in an unusual way, in calling 
for more tax cuts in the midst of a war.
  All of these things notwithstanding, our economy is slumping. There 
are a lot of reasons for that. One of the reasons, of course, is we 
have ignored the obvious. The strength of America is the strength of 
our families. And 40 percent of the families in America do not get 
close to the numbers that Republicans consider to be the right level 
for tax cuts.
  Over 40 percent of the people in this Nation struggle in an effort to 
pay their bills and really live paycheck to paycheck.
  It doesn't take much to derail that family train, whether it is the 
loss of a job or serious illness or some other catastrophe. These 
people have not been a priority of the Republican leadership in the 
Senate, the House, or the White House. Now comes the time when the 
economy is slumping, and all of a sudden this group that had been 
ignored for so long by Republicans in their tax-cutting priorities is, 
front and center, the centerpiece for saving the American economy. 
Welcome to real America, I say to my colleagues. These are the people 
who have been struggling for a long time and waiting to be 
rediscovered. They should be rediscovered.
  I am troubled to learn--at least some speculation is out there--that 
this so-called stimulus package is going to be limited so that it still 
doesn't help those in middle-income status or lower middle-income 
status, those working families who really do put up a struggle trying 
to get by. You don't have to spend much time out in the real world to 
meet them. They are not the legendary welfare kings and queens. These 
people get up and go to work every morning. They work hard. They don't 
make a lot of money. They struggle with no health insurance or health 
insurance that is virtually worthless. They struggle with trying to 
fill up a gas tank. It may be a beat-up old car, but it is their 
lifeline to get to work, to make a paycheck, to keep things going. They 
struggle with heating bills in a harsh and cold winter. They struggle 
with the dream of a college education for their kids and pray they will 
have a better life. These are the real-world struggles of real families 
who have been largely ignored in this economic debate in Washington.

[[Page 468]]

  When we get down to a discussion of an economic stimulus package, we 
ignore these families again at our peril. Any stimulus package that 
fails to acknowledge their need will fail to stimulate the economy. I 
don't know what the parameters will be. Targeted, temporary--all of 
these things make sense. But let's make sure we are doing the right 
thing for the right people.
  Many people go to work every day making a minimum income. They 
struggle to get by. At the end of the day, they pay their taxes but 
don't have a Federal income tax liability. How can that be? They are 
paying their Social Security taxes, they are paying the Medicare 
requirements, all of the things all workers have to pay. But they don't 
make enough money because of the size of the family to be liable for 
Federal income tax.
  Who are these people? I can give an example. We estimate that 40 
percent of all households may not make enough to qualify for one of the 
proposed stimulus packages. Families of four making less than $25,000 a 
year would get nothing. A family of four making $25,000 a year, if it 
isn't given a refundable tax credit, will receive nothing by way of a 
stimulus check.
  What does a family do if they are making $25,000 a year and receives 
$1,600, let's say, from the Federal Government? Well, if you are trying 
to get by on $2,000 a month, $1,600 from the Federal Government may be 
the answer to your prayers. You may finally be able to turn around and 
buy something you have put off for a long time. You may be able to 
catch up on some of your bills. Getting $1,600 when you are making 
$2,000 a month is a big deal.
  Let's look at the other end of the equation. What if you are making 
$20,000 a month and you get $1,600 more? That is nice. I am sure there 
is something you can do. Will it change your lifestyle? Will it change 
the economy? It is not as likely.
  That goes back to something I learned a long time ago from a Jesuit 
priest who taught economics at Georgetown University called the 
marginal propensity to save. For every dollar you are given, what is 
the likelihood you will spend it and the likelihood you will save it? 
Economists look at that, and they know that if you are in a lower 
income group, you are less likely to save, more likely to spend, 
because you are living paycheck to paycheck. If you have a lot of 
money, you are more likely to save and less likely to spend because you 
are meeting your needs each paycheck. So when we devise a stimulus 
package, let's make sure we keep that fundamental rule of economics in 
mind. Let's make sure struggling families at lower incomes aren't left 
behind. The fact that they don't pay income tax doesn't mean they are 
tax free. They do pay taxes for Social Security, for Medicare, other 
things--sales tax, for example. This is the targeted group when it 
comes to a real stimulus.
  I ask unanimous consent to have printed in the Record a letter sent 
to all Members in leadership on January 18 from John Sweeney. John is 
president of the American Federation of Labor and Congress of 
Industrial Organizations, the AFL-CIO. John lays out his priorities, 
the priorities of his organization when it comes to a stimulus package, 
a short-term stimulus.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

         American Federation of Labor and Congress of Industrial 
           Organizations,
                                 Washington, DC, January 18, 2008.
     Hon. Nancy Pelosi,
     Speaker of the House of Representatives, Washington, DC.
     Hon. Harry Reid,
     Senate Majority Leader, Washington, DC.
       Dear Speaker Pelosi and Majority Leader Reid: As Congress 
     considers legislative responses to current and anticipated 
     weakness in the U.S. economy, the AFL-CIO urges you (1) to 
     include in a short-term stimulus package measures that will 
     have the most impact on the economy and get the ``biggest 
     bang for the buck'': and (2) to address the underlying causes 
     of current economic weakness.


                          Short-Term Stimulus

       It is encouraging that President Bush has recognized the 
     immediate need for an economic stimulus package. Judging from 
     initial reports, however, it appears that President Bush's 
     proposals are too heavily weighted towards tax cuts over 
     much-needed spending, do not address crucial problems facing 
     working families, and do not target tax benefits to those 
     families who need them most and will spend them fastest.
       In particular, we are concerned that the President's income 
     tax cut proposal would not be sufficiently stimulative 
     because it fails to target lower-income and middle-income 
     households who, as the Congressional Budget Office (CBO) 
     wrote last week, are likely to spend a larger share of any 
     tax benefit they receive. We are also concerned that the 
     President's proposal to cut business taxes would not be 
     sufficiently timely and, because of the linkages between 
     federal and state tax codes, could trigger economically 
     depressing budget cuts and tax increases by state 
     governments.
       While we understand that compromise will be necessary to 
     enact a stimulus package within the next month, we urge you 
     to insist on legislative measures that will have the greatest 
     stimulative impact on the economy and would not lead to 
     economically depressing budget cuts and tax increases at the 
     state and local level.
       (1) Extension of unemployment benefits. The Congressional 
     Budget Office (CBO) and Mark Zandi of Moody's Economy.com 
     rank unemployment benefits at the top of the list of possible 
     stimulus choices, increasing economic demand by $1.73 to 
     $2.15 for each dollar spent. We urge you to enact a one-year 
     federal unemployment compensation program that provides 20 
     weeks of extended unemployment benefits in all states; 13 
     additional weeks in ``high unemployment'' states with an 
     unemployment rate of 6.0% or more; a $50 per week benefit 
     increase; and additional administrative funding. We also urge 
     Congress to provide federal financing for states to expand 
     eligibility to lower-income workers, part-time workers, and 
     workers who leave their jobs for compelling family reasons.
       (2) Increase in food stamp benefits. Many food stamp 
     recipients are not tax filers and do not receive unemployment 
     benefits, so they would not benefit from a tax rebate or 
     unemployment benefit extension. An increase in food stamp 
     benefits would be one of the most effective forms of economic 
     stimulus, since it would almost certainly be spent in its 
     entirety very quickly, boosting demand for goods and services 
     in the short term.
       (3) Tax rebate targeted towards middle-income and lower 
     income taxpayers. The individual income tax rebates proposed 
     by President Bush should be retargeted towards middle-income 
     and lower-income taxpayers, who are most likely to spend the 
     money and thereby stimulate economic activity, by making them 
     available to taxpayers who pay payroll taxes but not income 
     taxes. According to Mark Zandi, a one-time uniform tax rebate 
     would increase demand by $1.19 for every dollar spent.
       (4) Fiscal relief for state and local governments to avoid 
     the economically depressing effect of tax increases and 
     budget cuts. State and local governments are experiencing 
     lower property and sales tax revenues, due to the slumping 
     housing market and slowing economic activity. Tax collections 
     are down in 24 states, and at least 20 states are expected to 
     have budget deficits this year. Since many states have 
     balanced budget requirements, a decrease in revenues can lead 
     to budget cuts or tax increases, both of which intensify the 
     impact of an economic downturn. Congress should provide at 
     least $30 billion in aid to the states in the form of 
     revenue-sharing grants and increases in the Medicaid match. 
     According to Mark Zandi, state fiscal relief would increase 
     demand by $1.24 for every dollar spent.
       (5) Acceleration of ready-to-go construction projects. 
     Putting Americans to work directly in construction and repair 
     projects is an obvious response to rising unemployment, and 
     would directly create additional demand. Unlike tax rebates, 
     all of this investment would be spent to increase domestic 
     economic activity, none would be spent on imports, and none 
     would be saved.
       Furthermore, we believe public investment in infrastructure 
     can be targeted and timely. For example, there is a backlog 
     of at least $100 billion in needed repairs to U.S. schools. 
     There are 6,000 bridges that have been declared unsafe, and 
     many of these projects are ready for work to begin 
     immediately.
       We urge Congress to provide $40 billion for public 
     investment in infrastructure, including school, bridge, and 
     sewage treatment repair.


         addressing the longer-term causes of economic weakness

       We are hopeful that Congress and President Bush can enact a 
     short-term stimulus within the next month. However, given the 
     nature of legislative compromise, any stimulus package 
     enacted within that time frame is likely to be only a down 
     payment on what is necessary to address this country's 
     economic problems-even in the short term. Congress may even 
     need to consider a second stimulus package later in the year.
       Congress must also begin focusing today on the most 
     fundamental underlying causes of our current economic 
     weakness. While it is appropriate for Congress to focus on 
     measures that have an immediate economic impact as it crafts 
     a short-term stimulus package, this is no excuse to put our 
     heads in the

[[Page 469]]

     sand and do nothing about the underlying longer-term problems 
     afflicting our economy.
       One of the underlying causes of our current economic 
     weakness is the stagnation of ordinary Americans' incomes. 
     This will probably be the first business cycle in which the 
     typical family will have lower incomes at the end of the 
     recovery than they did at the beginning of the last 
     recession. Wage stagnation, which began in the 1970s, has led 
     to longer working hours, higher consumer debt, and increasing 
     reliance on home equities. But today home values are 
     plummeting, home foreclosures are on the rise, consumer debt 
     is reaching unsustainable levels, and prices for energy, 
     health care, and education are soaring out of reach for many 
     working families.
       There are various long-term solutions to the underlying 
     problem of wage stagnation, They include fixing our broken 
     labor laws so that workers who want to form a union can 
     bargain with their employers for better wages and benefits; 
     ensuring affordable health care and retirement security; 
     fixing our flawed trade policies; and reactivating the 
     historically successful fiscal and monetary policies that 
     place a higher priority on full employment. Near-term energy 
     investments in the greening of our energy base would also 
     offer both environmental and economic payoffs in the form of 
     good jobs and improved competitiveness.
       Another underlying cause of our current economic weakness 
     is deregulation of the financial sector. The absence of 
     transparency and effective regulation of the mortgage and 
     financial services industries cries out for urgent attention.
       Speaker Pelosi and Majority Leader Reid: though we have 
     framed this discussion in the rather dry and impersonal 
     language of stimulus and macroeconomic impacts, there is a 
     human dimension to this story we can never lose sight of. 
     Many, many working families all over this country are barely 
     hanging on and are deeply worried that the steep economic 
     downdraft will pull them off their perilous perch. The real 
     test for any economic proposal considered by Congress in the 
     coming weeks and months should be: what does it mean for 
     them?
       Thank you in advance for your consideration of our 
     concerns.
           Sincerely,
                                                  John J. Sweeney,
                                                        President.

  Mr. DURBIN. If Members look at the list of things John Sweeney has 
highlighted, he understands what I have just described: the rules of 
economics, the fact that a lot of working families have not been part 
of the grand bargain in Washington for a long time. John Sweeney says: 
Let's extend unemployment benefits. That certainly is something on 
which money is well spent. Every dollar you put into unemployment 
benefits increases economic activity by $1.73, up to $2.15. It is a 
terrific boost to the economy, plus it goes to the people who need it 
the most, the ones who are out of work.
  Mr. Sweeney also calls for an increase in food stamp benefits. Many 
of these people are not tax filers and don't receive unemployment 
benefits, so they would benefit. They are struggling with their jobs, 
trying to get by, and many of them still qualify for food stamps.
  He also talks about a tax rebate targeted toward middle and lower 
income taxpayers. He talks about acceleration of construction projects. 
That is money well spent too. It isn't just the Tax Code we should be 
looking at. There are other ways to move the economy and do the right 
thing for America.
  One of the things Mr. Sweeney notes in his letter is that there is a 
backlog of $100 billion in needed repairs to American schools. He also 
says there are 6,000 bridges that have been declared unsafe. The 
Presiding Officer certainly knows that issue well, as chair of the 
Transportation Appropriations Subcommittee. There is a lot we can do to 
improve the economy of America by improving the infrastructure. I don't 
have to remind people what happened in Minnesota not long ago when a 
bridge failed. People died. It is an indication to all of us that we 
have to be aware of that need.
  This letter I commend to all colleagues because it is a good starting 
point when we discuss what we can do to this economy to make a 
difference, a real stimulus package.
  This package should be funded at appropriate levels to have an impact 
on our gross domestic product. The money should go by way of help to 
taxpayers and their families who truly are struggling. I just have to 
tell you, if you are making a quarter million a year, the notion that 
the Federal Government is going to send a rebate check to Members of 
Congress and people who make dramatically more money--wait a minute; 
what is this all about? Doesn't it make more sense for us to focus on 
those folks who are struggling who will spend it, who will energize the 
economy, than maybe giving enough money for families so that they can 
put a little extra coat of varnish on their yacht? Is that really an 
economic stimulus? I don't think so.
  I hope we will be able to help those businesses that will create 
good-paying jobs in America. That is critically important. I hope we 
will do this in a way mindful of the need for unemployment insurance 
and food stamps for those who are truly at the bottom and trying to 
move on with their lives and make a new life for their families.
  The Center on Budget and Policy Priorities issued a statement and 
said that the stimulus plan that some have suggested may fail a test of 
being effective if it doesn't help families making under $40,000 a 
year. Keep in mind that if you are being paid the minimum wage in 
America, you are making a little over $20,000 a year. So even people 
making twice the minimum wage and more would receive no help from some 
of proposals made already. We don't need to bypass 45 percent of 
households, 65 million of them with modest incomes. If a family of four 
has an income below $41,000 a year, under some of the proposals being 
discussed, they receive no help at all. We have to make sure they are 
included. We have to make certain the economic stimulus package really 
reaches those who have been left behind by the tax cuts for wealthy 
people that have been in vogue for so long in Washington.
  These families are the strength of our country. These are the people 
who get up every morning and go to work, raise the kids, and make the 
neighborhoods and towns that make America strong. It is time for us to 
try to come together on a bipartisan basis, get an economy moving 
forward which helps all of us by making certain we don't leave behind 
those families at the end of the economic ladder who have been ignored 
for so long.
  During the course of this break, I visited with a lot of families. It 
is hard to imagine sometimes, for those of us who are lucky enough to 
make a good living and have good health insurance, what these poor 
families put up with in trying every single month to keep it together. 
It is a lot of stress and strain. There is no stimulus package we will 
pass that will wave a magic wand and make their lives miraculously 
better. But woe to us if we pass a stimulus package which ignores the 
reality of economic sacrifice and struggle in America. Woe to us if we 
pass a stimulus package which ends up putting money in the hands of 
those who, frankly, don't need it as much as others. And woe to us if, 
at the end of the day, we stay hidebound to some old theories that have 
not worked and find our Nation sliding into a recession where we will 
all suffer.
  I yield the floor.
  The PRESIDING OFFICER (Mrs. Murray). The Senator from Montana.
  Mr. BAUCUS. Madam President, is the Senate in morning business?
  The PRESIDING OFFICER. The Senator is correct.
  Mr. BAUCUS. I rise to speak for less than 10 minutes.
  The PRESIDING OFFICER. The Senator from Montana has 12\1/2\ minutes 
remaining on the Democratic side.
  Mr. BAUCUS. I thank the Chair.
  I would like to make two points. First, the Finance Committee held a 
hearing this morning--in fact, it is going on right now--on an economic 
stimulus package, pressing the Director of the Congressional Budget 
Office, Peter Orszag, on various options that will stimulate the 
economy the most and what options will help people who need their money 
the most. That is not just all Americans who pay income taxes but 
people who don't pay income taxes, people who don't pay payroll taxes 
but file because they think, as good Americans, they should--they have 
no income tax liability and no payroll tax liability--and also some 
senior citizens who file income tax returns but who do not have any 
significant income tax liability. The fact is,

[[Page 470]]

if the rebate alone were to be given to anybody who files an income tax 
return, which was not the case with the 2001 rebate program--that 
applied only to people who paid income taxes--if a rebate were to apply 
to all filers irrespective of whether they paid income tax, that would 
reach 90-plus percent of all Americans. Add to that extending 
unemployment insurance benefits and food stamp benefits, I think that 
package would really help people who need it the most.
  There are various ways to put this together. I even suggested as a 
possibility, so as not to spend more than we should on a total package, 
that whereas the President is suggesting an $800 rebate for individual 
filers and a $1,600 rebate for couples, that could be significantly cut 
down, but give a bonus to households that have children so that a 
couple with two or three children would get an additional, say, $400 
bonus per child in addition to the, say, $400 or $500 payment an 
individual would get or, say, an $800 check that a couple would get.
  My point is, the Finance Committee is exploring different ways to 
make sure we do what is best. Of course, it will depend on some 
negotiation with the White House and both Houses of Congress. But I 
want to make the point clearly that we in the Finance Committee are 
doing our level best to try to find what works best, to get the 
greatest bang for the buck, with a view toward getting a stimulus 
package passed quickly, not loading it up with measures that are going 
to bog it down and prevent passage.

                          ____________________