Budget Plan Speech at Georgetown University

April 07, 2004

Washington, DC

Before we begin today, I want to honor the sacrifice made by the brave American soldiers who gave their lives in Iraq over these last difficult days. Our prayers and our thoughts are with their families, and we will never forget their service for the country we love.

No matter our disagreements over how to approach policy in Iraq, we are all united as a nation in supporting our troops and ultimately in our goal of a stable Iraq.

When William Gaston, after whom this hall is named and this college's first student, arrived here in 1791, America was a young nation with a people yearning for freedom and opportunity. The promise of America was that the paths to a better life would be open to those who worked hard and planned for the future.

That is still the promise of the America we believe in and the America we must reclaim. And building an America in which middle class incomes are rising, good jobs are being created, and working people can build a better life for their families is what this election is all about.

There is a fundamental difference in this election: President Bush has no real economic plan for long term prosperity and higher standards of living. I do - and at its heart is a strategy to create 10 million new jobs in the first term of a Kerry Administration.

This President, whose tax cuts for the wealthiest Americans have left America 7 million jobs behind what he promised, now seems to think that one month when unemployment actually increased can make up for three years of massive job losses. He doesn't seem to know - or acknowledge - that the industries that are expanding pay an average of $9,000 less than ones that are contracting.

George Bush talks about a recovery, but doesn't seem to realize that today we have a wage recession in America - with average Americans workers making $1,200 less a year; with millions of families struggling to pay higher health care costs, higher property taxes, and higher college tuitions - all of it out of lower incomes. While Americans are becoming more and more productive, they are increasingly working at lower wage jobs.

President Bush praises the productivity of our workers, but never mentions the unfairness which denies them the gains of their own labor.

Due to George Bush's tax cuts for the wealthiest Americans, the average worker now pays more in taxes at the local level. The burden for most Americans has gone up while wages have gone down.

By almost every measure of real life in the real America, George W. Bush just doesn't seem to understand what's happening to hard-working families.

So the great issue in this election is how to move America in a new direction.

And a strong America begins at home - with the state of our economy.

But instead of a credible economic plan and an honest debate, our present leadership has given us the old politics of false and simplistic negative attacks. I am committed to a different course.

Two weeks ago, in the first of a series of speeches, I set out my proposal to end tax benefits that encourage outsourcing and actually reward American companies for moving jobs overseas. Outsourcing will occur, but a company that stays here should not be put at a competitive disadvantage because a company that leaves can defer paying its taxes - perhaps forever. That's the law today; in fact, our taxpayers even spend $12 billion a year to subsidize the export of jobs. If I am President, I will fight to change that law - first, as a matter of simple equity: American workers should not be paying for the destruction of their own livelihoods.

Second, I will invest the savings from reform in new incentives to create new, good paying jobs here - and to lower corporate taxes by 5% to make all our companies more competitive. Let me be clear: under my plan, 99 percent of American businesses and 98 percent of Americans will get a tax cut.

In coming weeks, I will focus on the health care costs that today burden American enterprise and - for example - make it $1700 more expensive to produce the same car here than it costs in Canada. And I will discuss how America, by investing in new technology, in broadband, and in the great imperative of energy independence can lead the world in the jobs of the future.

Today, I turn to an issue that is essential to all the others because it is the foundation of confidence in our economic future. In the last three years, the federal budget has gone from record surpluses to record deficits - which, if left unchecked, can become a fiscal cancer that will erode any recovery and threaten the prospect of a lasting prosperity. Ultimately, as deficits drive up long term interest rates, they will dry up investment and undermine the belief, at home and overseas, that America is worth investing in.

George Bush now promises to reduce the deficit - the same promise of fiscal responsibility he has made and broken in every year, every budget, and every State of the Union message. The record is clear: a deficit reduction promise from George W. Bush is not exactly a gilt edged bond; and if he continued in the Presidency and performed as he has in the past, a third Bush term could mean a third Bush recession.

When it comes to the federal budget, I will move America in a new direction - by cutting the deficit in half in four years while making health care affordable; by paying for every program I propose; and by rolling back the Bush tax cut for the wealthiest Americans while expanding tax cuts for the middle class.

This will not be easy. It will require tough decisions - not just for one budget or one campaign, but for years to come and often in the face of unforeseen circumstances. But I know we can take this course and stay this course - because we've done it before.

And that is why Americans can trust what I am saying: I have a voting record that, on the most critical budget votes of the last 20 years, helped balance our budget and pay down our debt.

When I first came to the Senate in 1985, the federal deficit was soaring- as it is today.

In the 1980's, the national debt clock in New York City became a symbol for a federal deficit and debt that were out-of-control. Back then, many Democrats thought we could spend and spend without having to pay the bill. And back then, most Republicans even claimed that if you gave huge tax cuts to the wealthy, they would somehow pay for themselves. I guess that's what they mean by "an elephant never forgets."

At that the time, I joined together with a group of reformers from both parties - like Republican Senator Warren Rudman and Democratic Senator Fritz Hollings - to push for a deficit reduction plan with real teeth. What we got was real grief from leaders in both parties - and by the early 90s, the deficit was increasing so fast that the debt clock would sometimes breakdown because it couldn't keep up.

We made tough choices in 1993 - when a new President challenged the Congress to return to fiscal sanity. And the choice really was tough; fiscal sanity won by exactly one vote. I was proud to cast a deciding vote in the Senate to bring the deficit under control. In 1997, we finished the job by passing an historic bipartisan balanced budget agreement - which not only balanced the budget for the first time since 1969, but extended the life of Medicare, expanded health care for children, and cut taxes for middle class Americans.

By 2000, we were on the road to saving Social Security and we were paying down our national debt for the first time since Andrew Jackson was president - 170 years ago. The numbers on the national debt clock were spinning backwards.

Just before George Bush took office, the clock was taken down. Talk about wishful thinking.

The new President, who had promised to change the partisan tone in Washington, promptly turned his back on the bipartisan balanced budget consensus of the 1990s. Instead of short term decisions to stimulate the economy, he made long term mistakes that exploded the deficit.

He lavished tax cuts we couldn't afford on those who didn't need them. He made a clear choice: to pass the bucks to the privileged while passing the buck to our children. Because of this President's decisions, a child born today will inherit at $20,000 debt - a "Birth Tax" that he or she had no part in creating.

In New York, the national debt clock has been turned back on - with the numbers rising faster than the human eye can see.

In a blink of history's eye, trillions in budget surpluses have been transformed into trillions in deficits over the next decade. From missions to Mars to tax cuts for the wealthy to a Medicare bill that benefits drug companies and burdens seniors, the Bush Administration has failed to pay for what it has proposed. This President has proposed or passed $6 trillion in initiatives in the next ten years alone that he has no plan to pay for.

His record shows that we can't trust what he says. And no matter what he says now, the Bush policies will not reduce the deficit but worsen it.

Instead of facing that reality, George Bush stubbornly refuses to change course. When false promises don't work, he tries excuses. Blaming everyone from Bill Clinton to Ken Lay to Saddam Hussein.

But that is not the reason for our own budget crisis. The independent, non-partisan Congressional Budget Office reported last month that 94 percent of the $500 billion deficit for next year is due to George Bush's excessive spending and ineffective tax giveaways for the wealthiest Americans. In fact, his tax cuts alone account for most of the long-term deficit increase.

And the price is being paid in many ways.

This Administration has squandered the historic opportunity to use the surpluses to save Social Security. Job creation is slowed by increased uncertainty about our economic future. And we are weakened abroad as well as at home. With our national debt increasingly owned by foreign governments, we devalue our own bargaining power with countries like China when they manipulate their currency to inflate their exports, depress ours, and in effect destroy American jobs.

So the deficit is not just about the numbers and statistics - although they are a damning indictment of the Bush record. The issue of fiscal responsibility will shape our entire economic future. My pledge is to restore fiscal discipline - and my budget plan is built on three economic principles.

First, we will not raise taxes on middle class Americans; we will lower them.

The Bush Administration has engineered the greatest tax shift in American history. Middle class Americans are now paying more of the national budget; wealthy Americans are paying less. Our present national leadership has transferred the tax burden from wealth to work. We will restore tax fairness. We will expand middle class tax cuts for families with children and married couples and pass new tax cuts to make education and health care more affordable while cutting our deficit in half.

But for Americans making more than $200,000, we will simply roll back the Bush tax rates to the level they were under Bill Clinton to pay for education and health care. With these resources, we can expand health care for all of our children and cover virtually all Americans while lowering the health care premiums that are squeezing families and hurting job creation.

I realize that honorable people can disagree about whether it makes sense to repeal the recent tax cuts for Americans making more than $200,000 so we can afford to invest in health care and education. I am willing to debate that disagreement at any time or place. It is a fundamental choice about our future and a central choice in this election.

But rather than debating real differences, the Bush campaign is engaged in the politics of deceit and distortion.

They are spending millions of dollars trying to mislead Americans about the basic facts: If you make less than $200,000, you'll get a tax cut under my plan. If you make more than $200,000 a year, you will go back to paying the same tax rates you did with President Clinton and our country will get health care and education. The top 2% will pay more than they do now. Everyone else will get a tax cut under a Kerry Administration.

Let me repeat: 98% of individuals - and 99% of companies and small businesses - will pay lower taxes under my plan.

Second, we will impose spending restraints so no one can propose or pass a new program without a way to pay for it. And we'll enforce budget discipline with spending caps. During the 1990s, we had spending caps. We cut the deficit in half and then balanced the budget. And along the way, we created 23 million new jobs, increased family income across the board, and gave middle class families a tax cut. Because we limited the growth of government's budget, family budgets were able to grow.

So my budget plan pays for my proposals. In contrast to George Bush's $6 trillion in unpaid-for spending, my plan returns to a concept known as 'pay-as-you-go.'

And in the months ahead, as I put forward new ideas for a stronger, better, more prosperous America, I will state, in specific terms, how to finance them without raising the deficit or middle class taxes.

I have already shown how we can pay for my health care plan and education. But we can and will do more by reducing or eliminating government programs that don't work.

For example, we'll freeze the federal travel budget, reduce oil royalty exemptions for drilling on federal lands, and cut 100,000 contractors now employed by the federal government. We'll streamline government agencies and commissions and reduce out-of-control administrative costs by five percent. And when we're done, the federal government will be smaller but smarter, more effective and less expensive.

The strong spending caps in my plan will insure that spending doesn't grow faster than inflation. If Congress fails to keep spending in line, the budget caps will mean across the board cuts in every area except security and education and mandatory spending programs like health care, Social Security and Medicare.

So when I say a cap on spending, I mean it. We will have to make real choices - and that includes priorities of my own.

Let me give you a couple of examples. I've proposed a major expansion of national service programs to strengthen the values of patriotism, community and citizenship. And I believe we need to make pre-school universal so that every child in America gets the best possible start in life. But with the deficit worsening each and every day of the Bush Administration, we may have to slow both initiatives down or phase them in over a longer period. I don't like that. But those are the hard calls a President has to make.

Third, we will free resources and reduce the deficit by taking on corporate welfare. John McCain and I have introduced legislation to end corporate welfare as we know it. In a Kerry Administration, we will fight for that bill; we will take our case to the public if we have to - and we will pass it. Today, mining companies buy up public lands for five dollars an acre.

And Dick Cheney's old company Halliburton dodges taxes with offshore havens while it gets billions from no-bid government contracts. If I'm elected President, those days will come to an end.

By going after corporate welfare, as John McCain says, we can save tens of billions of dollars a year. Our bill calls for a Corporate Subsidy Reform Commission to recommend cuts and submit them to Congress for an up or down vote - with no amendments.

John McCain can't get anyone in the Bush White House to listen to our proposal. If I'm President, John McCain will get the first pen when I sign this bill into law.

We can't restore fiscal responsibility unless we have a President willing to bring our divided parties together - and ready to be straight with the public about what we can and can't afford.

We can cut the deficit in half in four years, expand health care coverage, and make it more affordable for the families who already have it. We can invest in education, restore pay as you go rules, and impose spending caps. We can rollback the Bush tax cuts for those at the top - and cut taxes for middle class Americans.

We can do all this if we set clear national priorities - and make the tough decisions - not just about the programs of others, but about our own proposals.

And we have to do this - because it is critical to any credible economic plan and the creation of new, good-paying jobs. An America that ignores the deficit will be an America that invites inflation and recession.

An America that pays for new initiatives and follows real budget rules will be able to build a new era of prosperity.

We know how to do this. We did it in the 1990s. Now it's time to return our government to fiscal responsibility - and our country to investment in the future, to job creation and rising standards of living.

And if I am President, that is the new direction I will set for our budget and our economy.

None of these choices are about numbers or dollars alone. They are the choices we make that build the fiber of our nation. They are the responsibility our generation has been handed and the legacy that we hand to the generations to come. This is the course we must choose. This is the course we will chart together.

Thank you.