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Congressional Budget for the United States Government for Fiscal Year 2005

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Location: Washington, DC

CONGRESSIONAL BUDGET FOR THE UNITED STATES GOVERNMENT FOR FISCAL YEAR 2005

Ms. STABENOW. Mr. President, I rise to speak about the budget. I first commend my ranking member, the Senator from North Dakota, for his incredible leadership and the way in which he has presented all of these issues and the challenges facing our country. There is no question that a huge hole has been dug with deficits as far as the eye can see.

I remember coming onto the Budget Committee as a new Member of the Senate in 2001, when the debate was what to do with the largest surplus in the history of the country. I remember when the Senator from North Dakota was talking about the baby boomers retiring and the need to put money aside to meet our obligations under Social Security and Medicare, and the need to look to the future.

Unfortunately, instead, what we saw were very short-term decisions that turned the largest budget surplus in the history of the country into the largest budget deficit in the history of the country, in only 3 years. It is astounding to see what has happened in the last 3 years.

But I thank him for his courage and his willingness to fight for what is important to my family and the people of Michigan and the people of North Dakota and people all across the country, for fighting for the right priorities for the future of our country.

I also want to take a moment to thank our chairman, who convened his last budget hearing and budget resolution markup this year. I appreciate the fact that he conducted a fair markup, as he has done since being chairman. We came to the conclusion and voted on a budget resolution that now is in front of us. He did it in a very fair way.

I also commend him for a couple of tough decisions he made that the administration was not willing to make. Chairman Nickles, unlike the administration, put funding in the budget for ongoing activities in Iraq. He put in a reserve fund of $30 billion. While I am concerned that is not enough to meet the request that will come back to us, I commend him for his leadership in understanding the number certainly is not zero, that there needs to be an amount that is put aside into a reserve fund.

But this budget is so flawed in the end analysis, I am not sure where to begin in talking about it. It reminds me of Yogi Berra when he said: This is deja vu all over again. Because that is exactly where we are, given the direction we have gone in the last 3 years. Once again, we see a budget that is skewed to a privileged few while leaving middle-income families behind. It fails the credibility test, and it does not reflect our Nation's values and priorities. I hope the Senate will decide to reject it and go back to the drawing board and get it right.

Our Nation's budget is our chief economic tool. This is the fourth time President Bush has submitted a budget to Congress containing his economic plan for the Nation. Unfortunately, the President's last three budgets have led to major job loss, soaring deficits, rising debt, the looting of the Social Security and Medicare trust funds, and have failed to provide the necessary resources for our domestic priorities.

It seems every day we hear more and more economic bad news. Certainly in the State of Michigan every day there are headlines of job loss.

On Friday, the Labor Department said there were only 21,000 jobs created in February. This is anemic, according to many economists, and 285,000 jobs short of what the President said would happen just a couple of months ago. At this rate, it will take 9 years to recover all of the jobs lost under President Bush.

Unfortunately, the people of the State of Michigan can't wait that long. Our people need jobs now. Under the Bush Presidency, we have lost 2.8 million manufacturing jobs, many of them in the State of Michigan. Our manufacturing sector is in crisis. Every day we hear about another company shipping its jobs overseas to China or India or Mexico. In fact, the State of Michigan had the highest number of jobs lost last year.

Just last Friday, our Democratic Policy Committee held a hearing on the topic of shipping jobs overseas. At that hearing we heard testimony from Dave Doolittle who works at the Electrolux Refrigerator plant, Greenville, MI. They announced they were going to close and export 2,700 jobs to Mexico.

Despite major concessions offered by the workers and over $70 million in economic incentives from the State and the community-the community did everything right; the workers did everything right-Electrolux announced it will close next year, and 2,700 workers will be out of a job. That means 2,700 families will be without a breadwinner in a town of 9,000 people; 2,700 people losing their jobs out of 9,000. This type of job loss is devastating to these families.

In addition to that, when we look at the ripple effect and the suppliers involved and others, this can reach as high as 8,000 good-paying jobs with health care and pension plans throughout the entire region. This type of job loss is devastating for our families, and it is devastating to Dave Doolittle.

Mr. Doolittle has worked at the plant for over 23 years. He has a pension. He has health benefits. He has one child in college and two in high school. The plant closing will devastate his family. He asked us, who will pay for his two high school children to go to college? What is he going to do about health care for his family? Will they be able to keep their home?

To add insult to injury, Dave Doolittle and other employees will be working on an assembly line that has just received major investments of $100 million to improve it so the company can see what problems it has so they can then rebuild that and take it to Mexico. This highly productive, highly skilled workforce is working out all the kinks in the equipment that they will then pack up and send to Mexico.

Unfortunately, the President's budget and the budget before us will do nothing for Dave Doolittle and his family. He is a one of a growing number of hard-working families making up a part of another America. The other America includes not only the unemployed but millions of workers who have simply given up trying to find a job. If you include them in the unemployment rate, these discouraged workers push the unemployment numbers up to 9.6 percent, almost 1 in 10 of our workers.

People such as Dave Doolittle are not interested in a handout. This is a hard-working, skilled individual. What he is looking for is a good job and a chance to give his children and his grandchildren-to-be a better future. They want to provide their children with health care and an education so they can live the American dream. Isn't that what we all want for ourselves and for our children? They want the country to be strong and safe from terrorist attacks. They are counting on us to do what is right at home and abroad.

Unfortunately, the Bush economic policies have failed Dave Doolittle and his family on all counts. The President's budget has no plan to create jobs. It does nothing to help the uninsured and make health care more affordable. It contains proposed cuts for our schools, our police officers, our firefighters who are trying to protect us on the front lines against terrorist attacks.

On these priorities and more, Democrats tried to improve this budget in committee but were voted down on a party-line vote every time.

This budget also lacks credibility. For the last 3 years we were told one thing; yet something very different has happened over and over. The first tax cut produced massive deficits and harmed our economy. Despite all that, the President continues to push the same trickle-down economics that have failed. If these tax cuts were done by trial and error, they were an error.

Consider everything that was said and what actually has happened. We were told that the administration's tax cuts in 2001 and 2003 would create jobs, but we have lost jobs, almost 3 million. We were told we would have a surplus, but we now have the largest deficit in the history of the country. We were told we would pay off the national debt, but now our national debt is higher than when President Bush took office. We were told the President's budget would not use Social Security trust funds, but now we are using every penny of the Social Security surplus to pay for tax cuts for the privileged few. We were told we needed to modernize Medicare and add a prescription drug benefit, with which I agree, but now we have a law that will privatize Medicare, hurt one in four seniors on Medicare, and cause them to lose their private insurance. It does little to help seniors purchase prescription drugs and does nothing to lower prices for all Americans.

We were told we would fund Leave No Child Behind and special education, but now we have failed to fully fund them. School districts are making cuts, shortening their school years, and laying off teachers. We were told we would have a new Department of Homeland Security that would help protect us, but in only the second budget cycle for this agency, we are already seeing budget cuts from last year, and we are falling far short of what is needed to protect our country.

We tried to make some changes to this budget in committee to have it better reflect our Nation's values and priorities. Unfortunately, we were unsuccessful. We tried to add fiscal discipline and reduce the deficit, but we lost on a party-line vote. We tried to fully fund Leave No Child Behind, but we lost on a party-line vote. We tried to restore the cuts to our firefighters, but we lost on a party-line vote.

Unfortunately, the Democrats were not the real losers, though. The American people were the losers by those votes.

We are in this budget and economic mess because this administration has valued wealth over work and the privileged few over our children's future. For the privileged few, this administration has given so much: most of the tax breaks, subsidies for insurance companies and HMOs, and $139 billion in profit for the pharmaceutical industry. For working families there has been very little. In fact, working men and women and their families are worse off than they were 3 years ago.

Three million workers have lost their jobs. As of the end of January, we have over 400,000 people who have lost their jobs who have been cut off of unemployment insurance. Eight million will see their pay cut because of new overtime regulations. Seven million people who work for the minimum wage have seen their pay eroded, and 12 million children were too poor to get the child tax credit.

Three years ago, Federal Reserve Chairman Alan Greenspan gave the go-ahead for massive tax cuts for the top 1 percent, and this Congress, in conjunction with the President, enacted them, and now we have the largest deficits in history.

Unfortunately, now Chairman Greenspan is urging Congress and the President to make cuts in Social Security because we have these deficits. This means tax cuts for the privileged few are paving the way for cuts in Social Security for middle-income families. This is wrong.

How can we ask people who have worked their entire lives to have their Social Security cut to pay for tax cuts for our privileged few?

I mentioned earlier that budgets are all about values and priorities, and I truly believe that. We have to decide, do we want more tax cuts for the privileged few or do we want all Americans to be safe by providing full funding for firefighters, police officers, and other first responders?

Do we want more tax cuts for the privileged few or do we want a real comprehensive Medicare prescription drug benefit and lower prescription drug prices for everyone?

Do we want more tax cuts for the privileged few or quality schools with highly educated teachers and small class sizes and state-of-the-art technology for all of our children?

More tax cuts or quality education? More tax cuts or quality health care for our veterans who have served us and continue to serve us today? More tax cuts or hundreds of thousands of new jobs, rebuilding our Nation's highways?

We need a new vision. We need new priorities for America. We need a positive budget that will help all Americans raise their families, get access to health care, and enjoy their lives and their retirement. We need to restore our fiscal discipline, make critical investments to create jobs, and strengthen Medicare and Social Security. In short, we need to make the needs of American families our top priority again.

I will be supporting a number of amendments that will do that in this budget debate. I am hopeful we will be able to get bipartisan support to be able to do those things that American families are asking us to do, so at the end of the day we will have a budget that reflects what is important to the people we represent.

I yield the floor.

Ms. STABENOW. Mr. President, if I might respond to my colleague's comments, we certainly have heard similar comments before. There are a couple of concerns that I have. Like everything, it depends on how you look at the numbers and how you look at what is happening in terms of tax burden. The debate that has gone on relates to the income tax. It has nothing to do, first, with all of the taxes.

In this debate, there is always a conscious desire not to look at the payroll tax, which everybody pays and, in fact, it is skewed more to lower and middle-income people, because above a certain income you don't pay the payroll tax anymore.

So let's look at who is paying the payroll tax. Let's look at who pays sales tax, which is based on what you buy. It has no relationship to your income specifically, in terms of what the sales tax burden is. We know it falls more on low- and moderate-income individuals.

We can also look at property taxes. We look at a wide array of taxes in this country and we see that low- and middle-income people have a huge burden. When taxes get cut, it is not on the things they are paying; it is on those taxes-in this case, the income tax-which is paid by those who make higher incomes, higher percentages.

When we look at the total tax burden, we see that it is the middle-income people in this country who get squeezed on all sides. We should not add to that by extending a tax cut that continues to do that.

Let us look at the numbers, how the tax breaks stack up. The combined effect of the tax cuts of 2001 and 2003, if you make over $1 million a year-that is in a year and a half-if you make over $1 million a year, your combined tax cut is $140,369. The average middle-income-tax payer will get a tax cut of $566. Look at these numbers. This is more than the majority of people in the country earn working hard every single year for their family. They work hard, they play by the rules, they are struggling with sending their kids to college and making sure they can buy their homes and pay the property taxes, and all of the other pressures on them. They are worried about losing their job now to overseas competition. Instead of selling products overseas, they are worried their jobs are going to go overseas.

We have individuals who work hard every day, play by the rules, and the vast majority of them are earning less per year than what one person is going to get in an income tax cut who earns over $1 million a year. I do not begrudge in any way someone who earns over $1 million a year. That is not the point. The point is we are looking at this kind of a tax cut of $140,000 versus $566. There is a major issue of who is getting the tax benefit and who drives the economy, from where does the economic growth come. We know it is from middle-income-tax payers who are as consumers purchasing in the economy, but more broadly we look at this in terms of choices.

We know if we were to give them two-thirds of their tax cut this year instead of all of it, we could fully fund what has been reported is needed to keep us safe with homeland security-every single penny. It is a large number. We are told by Warren Rudman and the members who came together to look at all of our homeland security needs-not only police and fire and bioterrorism, borders and ports and chemical plants, but all of it-it will cost $15 billion, which is one-third of what those at the top are going to get back this year in a tax cut.

Would folks be willing to take a little bit less to know they are safe, that their family is safe, that the borders are safe, that the ports are safe, that they can call 9-1-1 and know they can get a first responder at their home if there is an emergency, or that the community can respond, that police and firefighters can talk to each other on the radio, have interoperability, which they do not have now?

All across Michigan, we do not have one system where everybody can talk to each other in case of an emergency. I think most of the people who do very well in this country would say, yes, that is important for my family, and that is a tradeoff I am willing to make; that is a choice I am willing to make.

This is about choices. It is not about class warfare. There are huge differences in what people will be getting back. It is not about penalizing or in any way demonizing people who make over $1 million a year. This is about choices. When we see red for as far as the eye can see, when we see that this year's projected deficit, just this year's deficit of $521 billion is more than the entire investments outside defense-take defense away-all of our domestic investments, all of our domestic budget: homeland security, education, health care, law enforcement, protecting the environment, parks-we could wipe out the entire domestic budget, except for defense, and not equal the deficit hole that the administration has put us in just this year.

It is a matter of choices and saying to someone who is doing very well: We need you to help. We need you to be willing to make sacrifices just as every family is, just as our men and women in the armed services are making in Iraq and Afghanistan. It is about choices. If the choice is keeping every American safe, making sure we can protect ourselves from terrorist attacks across this country, and asking those doing very well, who have reaped the benefits of this country, to help share in paying for that, I think the majority of them would say yes. That is something we all are willing to do.

This is always a question of choices. It is a question of priorities. It is a question of values.

As the chart shows, it is also a question of fairness for people. If we look at the difference in the average middle-income-tax payer and the cut they will get in 2006, and those with incomes over $1 million and the cut they will get, we see that in addition to this disparity, this middle-income-tax payer is paying a payroll tax, sales taxes, property taxes, and contributing greatly to the payment of services in their community.

This budget is about what is fair for everybody, what is the right thing to do to keep us strong fiscally, how do we put ourselves on a path of not asking our children to pay the burden of the debt that is being accumulated, how do we make sure we are smart in terms of our investments in the economy to grow jobs, put money in the pockets of middle-income people, small businesses that drive the economy-the majority of new jobs are coming from small business-how do we make sure that is a priority for us, and how do we make sure we are creating a set of priorities and a vision for the future that our families are asking us to do?

Thank you, Mr. President.

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