[Congressional Record (Bound Edition), Volume 156 (2010), Part 12]
[Senate]
[Pages 16525-16526]
[From the U.S. Government Publishing Office, www.gpo.gov]




                     FISCAL AND ECONOMIC CHALLENGES

  Mr. KAUFMAN. Mr. President, although we have come a very long way 
since January 2009, our Nation faces profound short-term and long-term 
fiscal and economic challenges. In the short term, we need to do more 
so our economy will grow significantly again. This should include the 
small business jobs bill, the extension of middle-class tax cuts, and 
additional spending on infrastructure, as the President has proposed. 
In the longer term, we need to shore up our fiscal balance sheet and 
develop policies, including investment in innovation, research and 
development, clean energy and science, technology, engineering and 
math--STEM education--that promote sustainable growth and job creation.
  Unfortunately, instead of distinguishing between our distinct short-
term and long-term problems, we have conflated them, focusing most of 
our attention on our immediate fiscal deficits.
  Sometimes overlooked is that these deficits are, in a large part, 
legacies of unpaid-for policies of the previous administration, whether 
they be the wars in Iraq and Afghanistan, not paid for, tax cuts for 
the wealthy, which were passed and not paid for, or Medicare Part D, 
which was passed and not paid for. In addition, the economic fallout 
from the financial crisis, a primary driver of our current fiscal 
deficits, was itself a product, as you well know, Mr. President, of 
governmentwide deregulation.
  While we all support cutting wasteful government spending, it is not, 
by itself, a solution to our fiscal woes. Indeed, if we were to 
eliminate all nondefense discretionary spending in the next fiscal 
year--Department of Justice, Department of Education, Department of 
Energy--we would still have a deficit of more than $700 billion; that 
is, if we eliminate all of them. We hear people coming to the floor and 
talking about cutting that, that is going to save us. If we eliminate 
the whole thing, go down Constitution Avenue and close down every 
building, we would still have a deficit of more than $700 billion.
  This focus on Federal Government spending is shortsighted and even 
counterproductive, since it distracts us from the real problem of 
addressing our weak economic fundamentals.
  All too many Americans are painfully aware of the current economic 
conditions in which we find ourselves. It is clear these conditions 
would even be worse if not for the Recovery Act. It saved us from 
another full-blown depression and allowed us to rebuild our economy and 
add jobs. The nonpartisan Congressional Budget Office concluded that 
the American Recovery and Reinvestment Act resulted in anywhere between 
1.8 million and 4.1 million more jobs.
  The CBO also estimated that our gross domestic product was 1.7 
percent to 4.2 percent higher in the first quarter of 2010. Other 
economic indicators show similarly strong results, following the 
passage of the Recovery Act. After the passage of the Recovery Act, the 
markets hit bottom, with the Dow 6,547, on March 9, 2009, just about 
the time we passed the Recovery Act. Since we passed the Recovery Act, 
the Dow has risen dramatically, climbing above 11,000 early this year, 
even remaining above 10,000 amidst recent market turmoil, and most 
recently spurting higher by more than 7 percent in the month of 
September alone. All that happened after we passed the Recovery Act.
  The Purchasing Managers Index, a leading indicator of business 
confidence, has also been generally trending upward since the passage 
of the Recovery Act. That we are not where we want to be is testament 
to the magnitude of the problems inherited by the President and this 
Congress. Indeed, millions of Americans are without jobs and 
overburdened with debt. Although large corporate balance sheets are 
generally strong, many small businesses have limited access to credit, 
a condition which will be helped with the small business jobs bill, 
which the President signs today.
  What is more, many businesses will simply not invest without consumer 
confidence. In such an environment, where consumer and business 
confidence is low, there are obviously limits to the effectiveness of 
monetary policy, irrespective of the creativity of the economists and 
policymakers at the Federal Reserve.
  Fiscal policy, whether through direct government spending or through 
tax or other incentives, is the one lever we have to spur growth. As 
Olivier Blanchard recently stated: ``If fiscal stimulus helps reduce 
unemployment and thus avoid an increase in structural unemployment, it 
may actually largely pay for itself and lead to only a small increase 
in debt relative to the alternative of doing nothing.''
  Conversely, policies aimed at an immediate spending cut and a 
tightening of the proverbial fiscal belt could actually harm our 
economy. Therefore, it is critical we extend middle-class tax cuts and 
expand, not contract, stimulus measures.
  In addition, the President's $50 billion of infrastructure investment 
is a good way to put more Americans back to work, to make a downpayment 
on rebuilding our infrastructure.
  Of course, our need to promote economic growth in the short term does 
not make the need to address long-term fiscal problems any less urgent.
  Former OMB Director Peter Orszag said in late July:

       It would be foolish to dramatically reduce the deficit 
     immediately, because that would choke off the nascent 
     economic recovery. But it would be equally foolish not to 
     reduce the deficit significantly by, say, 2015, because that 
     would imperil continued economic growth at that point.

  Accordingly, while we should not be raising taxes on middle-class 
families in the midst of a recession, we should also not make permanent 
the Bush tax cuts on the top 2 percent of Americans. Doing so would 
cost close to $700 billion over the next 10 years. That is not a policy 
of fiscal discipline.
  The path to fiscal sustainability will require tough choices and 
tradeoffs. We, therefore, need to be supportive of efforts and 
decisions of the new bipartisan debt commission. But as important as it 
is to put our fiscal house in order, our Nation's future prosperity 
will not be determined by accountants in green eyeshades. If we hope to 
promote sustainable economic growth and job creation, it is critical 
that we seize the initiative on clean energy and that we support 
science, technology, engineering, and mathematics fields.
  If we want to get the most bang for our buck now and long into the 
future, we should invest in clean energy. Studies show that a $1 
million investment in clean energy will create more than three times 
the number of jobs than if those dollars were invested in fossil fuel-
based energy projects.
  The truth is that clean energy is the future of the global economy, 
and we should be investing in it today. Since 2005, global investment 
in clean energy has exploded, growing by 230 percent. But the United 
States is not keeping up with the global clean energy revolution. Last 
year, 10 G20 countries invested a higher percentage of gross domestic 
product in clean energy technology than the United States did. These 
investments created many jobs--over 1 million jobs in China alone. This 
growth is a direct result of policy decisions that commit to a clean 
energy future. The United States has failed to make a significant 
commitment to clean energy. Over the recess, Ernst & Young announced 
that for the first time, China had overtaken the United States as the 
most attractive country for renewable energy projects.

[[Page 16526]]

  We need to provide certainty in the energy market for investors, 
businesses, and industries. They tell us that none of this will happen 
without a price on carbon. Pricing carbon will reflect the true cost of 
our energy sources and enable market forces to drive American ingenuity 
to develop clean energy technologies that will create jobs, enhance 
U.S. competitiveness, and establish the long-term economic security we 
need. Pricing carbon is the most effective policy tool available to 
transition the Nation away from dirty fossil fuels. It will create 
incentives for businesses and industries to find the lowest cost 
solutions to reducing carbon pollution. Again, this is a market-driven 
solution. Leave it to the private sector. Give them the incentives to 
do the right thing and develop clean energy.
  In addition to investing in clean energy, we need to promote STEM--
science, technology, engineering, and math--education. STEM jobs will 
be the jobs of the future. Whether it is energy independence, global 
health, homeland security, or infrastructure challenges, STEM 
professionals will be at the forefront of the most important issues of 
our time. In fact, according to a new study released by Georgetown 
University's Center on Education and the Workforce, by 2018 STEM 
occupations are projected to provide 2.8 million new hires. This 
includes over 500,000 engineering-related jobs.
  We must also continue to support research and development--a 
challenge that requires significant Federal as well as private 
investment. In our current economy, it is often hard to imagine 
investing more in anything, but more research and development funding 
is fundamental to high-tech job creation. A recent report from the 
Science Coalition features 100 companies that can be directly traced to 
influential research conducted at a university and sponsored by a 
Federal agency. Examples include Google, Cisco Systems, and SAS.
  It is imperative that we get our economy growing again so that we are 
in a strong position to tackle the very real challenges of the future. 
In the long term, our task will not be simply to get our government's 
finances under control. As important as that is, it will also involve 
making the needed investment in areas such as clean energy and STEM 
that will ensure long-term growth and job creation. We face complex 
challenges in the 21st century. They include harnessing eco-friendly 
sources of energy and providing efficient and effective health care for 
an aging population. By making these investments in our future, I am 
confident we can foster the innovation necessary to successfully 
address these problems and reestablish our leadership in an 
increasingly competitive global economy.
  Finally, Americans always had the ingredients for success, and I am 
confident that in the coming months and years, the American ethic of 
innovation and hard work will once again return our economy to the path 
toward prosperity.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Arizona is 
recognized.
  Mr. KYL. Mr. President, I ask unanimous consent to speak for 15 
minutes.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.

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