[Congressional Record (Bound Edition), Volume 154 (2008), Part 1]
[Senate]
[Pages 871-873]
[From the U.S. Government Publishing Office, www.gpo.gov]




                               RECESSION

  Mr. CASEY. Madam President, I commend our colleague from North Dakota 
for highlighting some of the challenges we face economically. He did it 
in a very compelling way, as he always does. We are grateful for his 
leadership on these issues.
  I stood before the Senate a couple of days ago and talked about the 
fact that

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we have a war in Iraq that we cannot forget about. In fact, if you 
listen to some of the news, you would think there are only one or two 
issues we have to worry about, but the war continues to be a central 
issue for the American people. We also have to be very concerned, as 
Senator Dorgan and others have reminded us, about the economy.
  I was asked recently by a reporter--a couple of different reporters, 
actually--who said to me very simply--or asked me, I should say, very 
simply the question: Are we in recession? I answered them without 
blinking, without even stopping to think, because I know it is the 
truth, and the answer is yes, we are in a recession. I don't care 
about, nor do I need to wait, for some academic dissertation or some 
economist to tell us what is the textbook definition of a recession. We 
are in a recession. We have to do something about it. I think it is as 
plain as could be.
  So what do we do about this recession? How do we respond to it? Thank 
goodness, there is a lot of bipartisanship on this issue, both parties 
coming together to try to do something about it. But I think we have to 
describe for people in Washington what this means for real people. I 
will talk about it in the context of Pennsylvania and Pennsylvania 
families, by way of highlighting this issue. I ask unanimous consent to 
have printed in the Record two pages I am going to be referring to from 
the Joint Economic Committee, Pennsylvania Economic Snapshot, dated 
January 23, 2008.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       Over the past seven years, the Bush economy has made it 
     more difficult for most Americans to get ahead. Under the 
     current Administration, the basic goals of the American 
     dream--raising a family, owning a home, paying for college, 
     saving for retirement--have become intimidating hurdles for 
     hardworking people. Slow growth in families' wages has been 
     compounded by double-digit cost increases for health care, 
     energy, and college tuition. Democrats are fighting for a new 
     direction in economic policy, aimed at restoring broad-based 
     growth, reducing the high costs of health care and energy, 
     improving retirement security, and increasing prosperity for 
     all Americans.


   Real Household Income Has Stagnated; Job Creation Has Been Abysmal

       Pennsylvania's Median Household Income Increased By Only 
     1.3 Percent Since 2000. In Pennsylvania, real median 
     household income averaged $48,148 over the 2005-2006 period, 
     compared with $47,524 over the 1999-2000 period. Despite 
     strong gains in productivity, workers' wages are only 
     marginally higher than they were 25 years ago, and 
     nationally, the inflation-adjusted income of a typical 
     American household fell by $962, or 2.0 percent, to $48,201 
     between 2000 and 2006.
       Pennsylvania's Job Growth Under the Current Administration 
     Lags Far Behind Previous Presidents. The current president is 
     competing with his father for the worst job creation record 
     of any president since Herbert Hoover. Since taking office in 
     January 2001, only 6 million jobs have been created, as 
     compared with 20.8 million new jobs created during the 
     Clinton administration at the same point in time. In 
     Pennsylvania, only 101,900 new jobs have been created since 
     Bush took office--or 1,200 new jobs per month--as compared 
     with a total of 528,900 new jobs under Clinton--or 6,400 per 
     month. In particular, the manufacturing sector has been hit 
     hard by the economy under the current Administration, with 
     payrolls nationwide declining by 3.2 million jobs between 
     January 2001 and December 2007, and by 202,000 in 
     Pennsylvania over the same period.


          Families Are Feeling the Squeeze of Rising Expenses

       Rising Energy Costs Lead to Higher Gas and Home Heating 
     Prices for Pennsylvania Residents. Rising energy costs are 
     making it more difficult for Pennsylvania families to stretch 
     their household budgets. In January 2001, the average retail 
     price per gallon of gasoline in Pennsylvania was $1.43. The 
     average gas price per gallon is $3.15 as of January 18, 2008. 
     When adjusted for inflation, this represents an increase of 
     86 percent. At the same time, this winter is expected to hit 
     Pennsylvania families hard, as average home heating costs 
     have risen by 18.9 percent per household from $1,216 to 
     $1,447 in the past year.
       Health Care Premiums Rose 45.8 Percent in Pennsylvania 
     Since 2000. In 2005, the average inflation-adjusted health 
     care premium for family coverage in Pennsylvania was $11,470, 
     a 45.8 percent increase from 2000, while the average premium 
     for individual coverage was $4,332, an increase of 50.0 
     percent since 2000. Nationwide, the inflation-adjusted 
     average monthly premium for family health coverage in the 
     United States rose by 39.7 percent from 2000 to 2005, even as 
     real median household income declined by 2.7 percent over the 
     same period.
       Pennsylvania College Tuition Rose 32.5 Percent Since 1999. 
     Pennsylvania parents of college age students have also been 
     hard hit under the current Administration, as inflation-
     adjusted tuition for Pennsylvania's four-year public colleges 
     increased 32.5 percent between the 1999-2000 and 2005-2006 
     school years to $8,994 per year. With that $2,208 increase 
     over just six years, Pennsylvania families are finding it 
     more and more difficult to afford to send their children to 
     college, and they are not alone. Nationally, public college 
     tuition has risen at more than double the rate of inflation 
     in recent years. Between the 1999-2000 and 2005-2006 academic 
     years, average inflation-adjusted tuition and fees at U.S. 
     public colleges and universities increased by 36.3 percent.
       Child Care Costs For Two-Child Families Averaged $1,273 Per 
     Month in Pennsylvania. Child care continues to be a hefty 
     burden on the budgets of Pennsylvania parents, with 
     inflation-adjusted monthly care for an infant averaging $689, 
     and monthly care for two children averaging $1,273.


 The Housing Crisis Is Eroding Home Wealth, Hurting the Broader Economy

       The Subprime Mortgage Crisis Is Impacting All Pennsylvania 
     Homeowners. Under the Bush administration's watch, 
     unregulated mortgage originators were given financial 
     incentives to sell risky, unaffordable subprime mortgages to 
     vulnerable borrowers. As these adjustable rate mortgages 
     reset to higher rates, the number of families unable to 
     afford their payments and threatened with foreclosure is 
     skyrocketing. In Pennsylvania, mortgages in delinquency have 
     increased from 81,900 in the third quarter of 2005 to 121,100 
     in the third quarter of 2007. According to a recent report 
     published by the Joint Economic Committee (JEC), the number 
     of subprime foreclosures in Pennsylvania will total 45,500 
     between third quarter 2007 and the end of 2009.
       High Foreclosure Rates Drag Down Neighboring Property 
     Values and Household Wealth. The mortgage foreclosure crisis 
     will have severe costs for Pennsylvania homeowners, not only 
     in direct costs, but in its effect on home values and 
     declining property taxes. According to the JEC, subprime 
     mortgage-related foreclosures will cost Pennsylvania $2.46 
     billion over the second half of 2007 through the end of 2009. 
     Nationally, the expected economic costs of forecast 
     foreclosures total nearly $104 billion. Moreover, these 
     numbers do not include the larger effects that the 
     foreclosure crisis may have on the economy. Home prices, 
     which drove up consumer spending when they rose earlier this 
     decade, are in decline now, and consumers may begin to draw 
     back on spending, negatively impacting GDP growth.


            The Economic Cost of the Iraq War Is Staggering

       The Iraq War Will Cost $36,900 Per Pennsylvania Household. 
     According to the JEC's recent report, the direct and indirect 
     costs of the Iraq War will be massive, especially if the Bush 
     administration continues to keep large numbers of troops 
     there. Even assuming significant force reductions, the cost 
     of the Iraq War will total $107 billion for Pennsylvania 
     taxpayers by 2017; the total cost to the country will be an 
     estimated $2.8 trillion.


                   Poverty Remains Persistently High

       In Pennsylvania, 1.4 million Residents Were Living in 
     Poverty Over Last Two Years. In Pennsylvania, 1.4 million 
     residents were living below the poverty line during the 2005-
     2006 period, an increase of 28.8 percent over the 1999-2000 
     period. Unfortunately, this problem is not confined to the 
     adult population as 17 percent of Pennsylvania's children are 
     living below the poverty line. Nationally, 12.3 percent of 
     Americans were living in poverty as of 2006.


              The Ranks of the Uninsured Continue to Grow

       Over Last Two Years, 1.2 million Pennsylvania Residents Had 
     No Health Insurance. A growing number of Pennsylvania 
     residents are living without health insurance. During the 
     2005-2006 period, an average of 1.2 million Pennsylvania 
     residents--9.9 percent of the state's population--had no 
     health insurance; this was 274,000 more than during the 1999-
     2000 period. Furthermore, 7.4 percent of Pennsylvania's 
     children had no health insurance. Across the country, the 
     number of Americans without health insurance totals 47 
     million, up 8.6 million since the current Administration took 
     office.

  Mr. CASEY. Madam President, I want you to know I will not read these 
two pages, but I want to highlight a couple of data points in this 
summary--two pages, four or five highlights.
  First, delinquencies, mortgage delinquencies, are up from the third 
quarter of 2005 to the third quarter of 2007, up by some 40,000 
mortgages, just in Pennsylvania. Then, stretching back over a couple of 
years, we look at gas prices. From January of 2001 forward, up 86 
percent, gas prices in Pennsylvania;

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home heating costs, in 1 year--1 year--up 18.9 percent; health 
insurance for families. If you look at it over a 5-year period, 2000 to 
2005, health care premiums for families are up 45.8 percent. And one 
more: Childcare costs per month for two children, which is the case for 
a lot of families, childcare costs per month for two children is 
averaging $1,273.
  That is just in one State and a couple of highlights. We could go on 
and on, but I won't.
  There are the economic realities for Pennsylvania families, and we 
could add more to that list. So when a reporter or anyone else asks me, 
Are we in a recession, my answer is, You bet we are. A lot of families 
in Pennsylvania and across the country think we have been in a 
recession, or their families have been in a kind of recession for years 
now--not just since the holidays, not just in the last year, but for 
many years. So I think the data is compelling and overwhelming and 
irrefutable.
  But let's think about it even more broadly. In terms of health care, 
Families USA did a report this past November--again, just in 
Pennsylvania--and they have done it for a lot of States, but 
Pennsylvania was the first one they announced. I will read one sentence 
from a long report, one sentence from this report by Families USA on 
the issue of health care. I think one sentence tells the story. During 
this same period that they referred to earlier in the report, meaning 
2000 to 2007, during that 7-year period:

       The average worker's share of annual family premiums rose 
     from $1,656 to $3,281, an increase of more than 98 percent.

  What they are saying in that one sentence is that in the State of 
Pennsylvania, over that 7-year period of time, the workers' share of 
annual family premiums went up 98 percent--98 percent in one State, the 
workers' share on health care. I don't even need to refer to the rest 
of the report. That tells the story.
  So that is all the information. That is all the data. But what do we 
do with it? We saw in the news today and yesterday that there has been 
an agreement of sorts that has been brought about on the economy, and I 
think we should all be encouraged by the fact that the President and 
the Congress are working together on a stimulus package. But what does 
that mean, and what are the elements of it? I won't go into all of it, 
but I think one thing we have to be guided by--and we have heard over 
and over again this sound bite in Washington, but we should say it 
again. These are not my words. We have all quoted these, but they 
summarize it pretty well: Whatever stimulus package we have in place 
for the American people has to be timely, has to be temporary, and has 
to be targeted. Another way to say that is we have to put in place 
policies for the stimulus that we know will work.
  I want to refer to a chart here that tells that story pretty well. We 
have seen this chart before, but it bears repeating. Other Members of 
the Senate have used it. The targeted stimulus proposals, the ones that 
deliver far more bang for the buck. It is very simple: What do you get 
for a buck in stimulus expenditure?
  We know this from the data. This isn't some Democratic operative; 
this is what Mark Zandi from economy.com put forth: food stamps, spend 
a dollar and get $1.73 back; unemployment, spend a dollar in stimulus, 
get $1.64 back. States are in a fiscal mess. We won't go into that, but 
if you spend a dollar, you get $1.36 back in return. Then it goes down 
from pay, with payroll tax rebates and temporary income tax. We know 
that expending tax cuts for the wealthy, which is on the table right 
now, doesn't work. We know what works.
  We have to make sure, in my judgment, that if we put together a 
bipartisan stimulus package--and we still have to work on this in the 
Senate--that we invest in strategies that will work, not what we would 
like to do or hope to do or not what one side or the other believes is 
a good idea. We have to invest in strategies that work: Food stamps, 
not just because it helps individual Americans and their families, but 
we know by investing in that strategy, they will spend the money 
quickly. We need people to spend money very rapidly to dig us out of 
the hole we are in. Food stamps, unemployment benefits, and aid to the 
States--we have to provide investments in strategies that will work.
  Another thing we have to do is make sure that when we are dealing 
with the housing crisis, we spend dollars and have strategies that lead 
to help in the short run. I was one of three Senators who put in the 
budget $180 million for counseling. It is not some far-reaching plan to 
deal with the subprime crisis; it is dollars right now. In fact, the 
dollars for counseling would get dollars into the hands of nonprofit 
groups in the country to help families out of this next month, so to 
speak. Those dollars--$180 million--will begin being spent in March. 
That will work. Those counselors are experts. They are certified, and 
they know how to work with families. We have to invest in that.
  I will conclude with this thought. If you walked through the streets 
of New Orleans after Hurricane Katrina, I don't think many people would 
be scratching their heads and wondering whether that was a category 5 
hurricane or a category 4. It didn't matter; it was devastating. I 
don't think we ought to wonder whether an economist tells us we are in 
a recession. We are in a recession.
  We know something about the aftermath of Hurricane Katrina. When all 
of the reporting was done, when that horrific nightmare engulfed so 
many families, who were washed out of their homes and their hopes and 
dreams were gone, I think we learned a lot from what didn't happen 
before the hurricane.
  We know as Americans that devastation doesn't always come with the 
awful swiftness of a hurricane. Sometimes it happens much more 
gradually, over time, when you don't make the right decision and 
prioritize and when you don't make the right investments. We are not 
doing that right now. We are not making the investments we should make 
in children in the dawn of their lives. We are not making an investment 
in fiscal responsibility to the extent we should. We are not investing 
in our infrastructure. Maybe all of those decisions can lead to a kind 
of slower moving Katrina or slower moving hurricane, which is an 
economic hurricane, or a devastating hurricane that dashes the hopes 
and dreams of children and their families.
  So when we make a decision about what will be in the stimulus package 
to help people in the short run, we also have to get to work on a long-
term strategy for economic growth, investing in our children, and 
making sure families can grow. I am concerned about how we are doing 
that or not doing it in Washington. We should learn from the horrific 
nightmare that was Hurricane Katrina. We should learn from, frankly, 
information such as this that tells us what will work in the short run 
to get us out of this mess and stimulate the economy and get dollars in 
the hands of Americans who will spend the dollars, which will jump-
start or jolt our economy. I think we can come together and do that. I 
don't think what we have seen so far gets us to that point.
  I am grateful for the opportunity to talk about these issues. I know 
they are central not just to Pennsylvania and our families but in 
States such as Minnesota and other States across this country. We have 
a lot more work to do to get the stimulus package right to help our 
economy.

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