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Public Statements

The Federal Deficit

Floor Speech

Location: Washington, DC

Mr. MENENDEZ. Mr. President, as someone who voted to freeze salaries, to end earmarks in this budget process, as someone who has already voted to cut $45 billion from the budget, I rise today in recognition that business as usual cannot continue. I recognize the critical importance of addressing our Federal deficit--a deficit, I would add, inherited by this administration, a deficit driven by two wars, both unpaid for, and the unprecedented need for governmental action to mitigate the wild excesses of Wall Street and American financial markets, excesses that were effectively condoned by the last administration, whose policies took this Nation to the brink of a second Great Depression and cost millions of American jobs.

I never forget that time in late 2008 when Chairman Bernanke, the Chairman of the Federal Reserve, came before members of the Banking Committee and members of the leadership and described the circumstances that were unfolding in the country in which a series of financial institutions, according to Chairman Bernanke and then-Secretary Paulson, the Secretary of the Treasury--they said: We are going to have a series of financial institutions collapse, and if they collapse, they will create systemic risk to the entire country's economy, and every American will feel the consequences of that collapse. I remember how hushed that room was.

I remember also the question being put to Chairman Bernanke: Surely you must have enough tools at the Federal Reserve to get us through this period of time. I remember the response to that question, which was basically: Senator, if you and your colleagues do not act in a matter of days, maybe a week, we will have a global financial meltdown, which really meant a new depression.

Chairman Bernanke is an academician. His expertise is in depression-era economics, how this Nation got into the last depression, how Roosevelt got us out of it. So when he made that statement, it was all the more chilling. It is from that moment in 2008, before this President took office and Democrats were in full control here, that, in fact, we were facing the challenges we are today.

Those of us who believe in a free market also know you cannot have a free-for-all market. We had economic policies for the Bush 8 years, two wars raging abroad, an unregulated market that allowed for the free-for-all that brought us on the brink of a new depression, and that is what we are meeting the challenges of today.

Those choices then and the choices we make, what we choose to cut and what we determine is in our interest, will speak volumes about our values, our priorities as a people and as a Nation.

Mr. President, I favor smart cuts, not dangerous ones. In an independent analysis of H.R. 1, which we are going to be voting on tomorrow--the Republican vision of where we should take the country--shows we are losing about 700,000 jobs. But we are trying to grow jobs in America. We have finally gotten into positive gross domestic product of our Nation's economy. We are seeing job growth. I would like to see it be even more robust, but H.R. 1 takes us back the opposite way and threatens the very essence of this economic recovery--700,000 jobs.

Don't believe what I say because I say it is so, but because those in the know say it--Ben Bernanke: ``The GOP's plan will cut jobs.'' Economist Mark Zandi: ``The GOP plan would cost 700,000 jobs.'' Here is another analysis: House spending cuts will hurt economic growth. So what we have is economist after economist telling us that H.R. 1 is a recipe for disaster when it comes to the question of jobs in America.

That analysis which says we would slash 700,000 jobs directly impacts the lives of middle-class and working families struggling to get back on their feet. They are severe cuts that run roughshod over the green shoots of economic recovery just to satisfy a political agenda. I favor smart commonsense cuts--cuts made with a surgeon's knife not a meat ax; cuts that are thoughtful, surgically precise cuts that actually reduce the deficit, not cuts that eliminate jobs and disinvest in educational opportunities for millions of promising young Americans, not cuts that hurt middle-class families struggling to make ends meet, make our workforce less competitive, our communities less safe, and strip away basic protections Americans have come to take for granted.

In my view, we can preserve our values and invest in the future, invest in out-educating, out-innovating, out-greening, and out-growing the world and still cut the deficit. To begin with, Secretary Gates of the Department of Defense has identified $78 billion in defense spending cuts alone. He has identified $178 billion in program reductions over 5 years, including delaying or terminating high-profile weapon systems.

I agree with Secretary Gates that we can live without the Marine Corps variant of the F-35 Joint Strike Fighter as well as the Marine Corps Expeditionary Fighting Vehicle. The Secretary has identified $54 billion in cuts in overhead costs and improved efficiency across defense agencies and the civilian bureaucracy by reducing the number of defense contractors and wholly redundant intelligence organizations, among other improvements. Again, these are smart decisions that do not burden military families or affect our defensive capabilities.

I would add to that list of smart defense cuts the elimination of $1.75 billion for the F-22 aircraft and $439 million for an alternative engine for the F-35 Joint Strike Fighter Program, a cut for which I voted. These, among others, are smart cuts. But I think it is a mistake to pursue a budget-cutting strategy that costs this Nation 700,000 jobs through 2012, as the Republican plan will do--20,000 of those jobs from my home State of New Jersey, including more than 3,000 community health center jobs and 3,400 transportation and infrastructure jobs.

Another smart cut would be to do away with corporate subsidies that do nothing but pad the profits of companies that do not need them to be profitable and grow. We can repeal, for example, oil subsidies, as I have proposed, that would save $33 billion over 10 years on a windfall giveaway program to big oil that hardly needs a government handout. Over the past decade, BP, Exxon, Chevron, Shell, and Conoco have had combined profits of just under $1 trillion. Yet we have a system that provides them billions in subsidies every year. That is simply outrageous.

Even traditional oil industry supporters, such as former President George W. Bush and Shell's former CEO, have admitted when oil prices are this high oil companies do not need subsidies. They have the economic incentive they need to explore and drill. In 2010 alone, last year, they made over $75 billion, and that includes the $41 billion BP has spent trying to clean up the spill in the gulf--cleaning up the environment and paying for the economic damage they caused.

The fact is, cutting unnecessary defense programs and cutting oil subsidies are among the smart cuts that will save money while doing no harm to middle-class families. But the Republican plan, on the other hand, will take money away from the one thing that will allow millions of young people to reach their goals and prepare them to help America meet its competitive future; namely, a good education. That is a terrible mistake.

It is a mistake to cut the average New Jersey undergraduate's Pell grant by more than $845, an 11-percent cut. It is a mistake to take $115 million in Pell grants from 183,000 promising students in my State, as the Republican cuts would do. It is a mistake to cut funding to 18,000 students in Union County, NJ, or 16,500 in Middlesex County and 15,500 in Essex County, and to continue to cut Pell grants by $56 billion over the next 10 years. It is simply a mistake not to invest in education.

We are globally challenged for human capital in the delivery of a service or the production of a product. The boundaries of mankind have largely been erased in pursuit of that human capital so that an engineer's report is done in India and sent back to the United States for a fraction of its cost, a radiologist's report is done in Northern Ireland and read to your local hospital by your doctor, or if you have a problem with your credit card--as I recently did because there was a charge that wasn't mine--you end up with a call center in South Africa.

In the pursuit of human capital for the delivery of a service or a product we are globally challenged, which means for the Nation to continue to be a global economic leader it needs to be, at the apex of the curve of intellect, the most highly educated generation of Americans the Nation has ever had. That is how we will grow this economy and prosper and compete in the world. Yet the Republican budget moves us exactly the opposite way.

It is wrong to leave 4,000 New Jersey children without access to Head Start while at the same time continuing tax cuts for millionaires and multimillionaires. It is shortsighted to cut job training.

I went to a job training site in one of our counties. The place was packed--packed with individuals who have worked in the past but are unemployed now and looking to get the additional training that will make them competitive in a tough job market. So instead of helping our fellow Americans be as competitive as they can be for the job opportunities that may exist, we are going to cut job training for 70,000 New Jerseyans rather than seriously look at cutting farm subsidies. We need to be smarter about the cuts we make.

I think we would all agree that there are certain farm subsidies that are no longer needed, and we could certainly make smart cuts in some of those programs. We are all well aware that farm subsidies are not about the small American farm. I want to nurture that small American farm, including back home in New Jersey. We call New Jersey the Garden State. We are proud we are No. 2 in blueberries, No. 4 in asparagus. If you had cranberry for Thanksgiving last year, it probably came from the pine barrens of New Jersey with cranberry bogs. But that small farmer is not who we are talking about. This is about systematic efforts to move land from small farms to large corporate farms that mass-produce commodity crops such as cotton.

We pay out billions in agricultural subsidies every year that have created problems such as the ones we saw in Brazil earlier this year. Brazil went to the World Trade Organization and complained that what we were doing was an unfair trade practice, and the World Trade Organization agreed. So to avoid retaliatory tariffs--in essence, taxes against our products by Brazil--the United States agreed to pay $147 million in assistance to Brazilian producers. Yes, you heard me right--$147 million that American taxpayers are now paying to subsidize not American farmers but, because of our unfair trade practice, we are now subsidizing Brazilian farmers with our tax dollars. Something is wrong about that process.

We need to put an end to such ridiculous policies and save taxpayers billions of dollars. But instead of saving billions in smart cuts like that, the Republican plan under H.R. 1 goes after homeland security funding. That bill will cut homeland security investments by $3 million in my home State of New Jersey alone--home, according to the FBI, of the two most dangerous miles in America because of the chemical causeway along the Hudson waterfront that creates a real challenge--directly affecting the budgets of first responders such as the courageous men and women who responded on September 11. It is dangerous to cut more than $22 million in port security grants and more than $16 million in transit security grants from the Port Authority of New York and New Jersey.

I have worked hard, from implementing the 9/11 recommendations to fighting for port cargo screening. We don't need a nuclear or biological weapon coming into our ports or a threat like we saw from the terrorists in Mumbai in our transit systems that would result in a devastating attack and then further threaten our economy. Yet that is exactly what the Republican budget does.

I believe it is dangerous to cut $4.5 million in transit security grants for northern New Jersey, more than $3.5 million from the Philadelphia area and southern New Jersey, leaving families in my State and throughout that corridor who travel between States less safe.

I have a different take than my Republican colleagues on how we achieve deficit reduction. Quite simply, it comes down to one truism that we should keep in mind during this budget process, and that is this: You show me your budget, and I will show you your values.

We have that in our own family budgets. Families struggle together to have a place to call home for their families, to educate their children, to put food on the table, to be able to realize their hopes and dreams and aspirations. And how we spend our money as families speaks to our values, and, of course, the work we do to earn that money. That is true about the Nation's budget. The Nation's budget is a reflection of our collective values as a country. Those values are clearly evident in what we choose to fund and what we choose to cut.

I would remind my colleagues this debate is about more than numbers on a page. It is a portrait of America, a reflection of who we are and what we want this Nation to be. To make cuts simply to reach a numerical goal that isn't established by any sound science is to say that we care more about the bottom line than about investing in people, investing in jobs, in education, in infrastructure, in building and growing this economy, and protecting a safe, clean way of life that we have too often come to take for granted.

I want to talk about that for a moment.

From the moment we get up in the morning, to the moment we go to bed at night, the Republican plan would make cuts that affect the daily lives of millions of Americans and millions of jobs in every economic sector.

In America, when you turn on the tap for a glass of water or take your child fishing at a local lake, someone is at work--someone with a family--who is making sure the water is safe to drink and the lake is not polluted.

But the Republican plan cuts $700 million from the Clean Water State Revolving Fund and $250 million from the Drinking Water State Revolving Fund that have helped municipalities and communities put people to work on water quality protection projects.

The Republican plan cuts almost $1 billion from clean water and that means cutting not just funding, but jobs of those whose work is to keep our water safe and clean.

Is that a smart cut? Does that reflect who we are and what we want this Nation to be?

If you live on a river, a flood plain, or on the coast and a storm strikes, you know that in America there will be someone there to help if there is a flood or a coastal emergency.

The Republican plan, even after the disastrous experience in the wake of Katrina, cuts $30 million from flood control and coastal emergencies. Is that what we learned from New Orleans? Is that what we, as a nation, believe is a smart cut?

If you wake up in the middle of the night and your child is sick and you don't know why, or you think that child may have accidently ingested something poisonous, or your child is diagnosed with a life-threatening disease, in America you can call the Poison Control Center, take your child to a community health center, know that the Centers for Disease Control is doing its job.

In America you know that the National Institutes of Health is working every day to find the next treatment or cure that affects our families, friends, and neighbors, $300 million of that in New Jersey, bringing thousands of new 21st century jobs to my State to help continue our economic recovery.

But the Republican plan cuts $755 million from the CDC; $1 billion from the National Institutes of Health; $27 million from Poison Control Centers; $1.3 billion from community health centers and 3,400 community health center jobs in my State of New Jersey--3,400 more unemployed New Jerseyans.

We may not immediately make the connection between what these cuts mean and our lives, but they have consequences to our lives, to our families, to our prosperity. It also means some people will lose their jobs.

This morning millions of Americans got up and scrambled a few eggs and made some bacon for breakfast.

Fortunately, in this country we know it was someone's job to inspect those eggs. It was someone's job to inspect that bacon and make sure it was safe to eat. The Republican plan cuts $53 million from Food Safety and Inspection Service, the loss of more safety inspectors at a time when we have heard numerous reports of tainted food and the need for more, not fewer, food inspectors keeping our food supply safe.

Is that reflective of our values? Is that what we think of as life in America?

If you were a middle-class New Jerseyan who, after a year of looking for a job, finally had an interview and wanted to take the train because you thought it would be a faster, easier, and more convenient way to get to that interview, you may find there are not as many opportunities because the Republican budget cuts $224 million from Amtrak. In a post-September 11 world in which multiple modes of transportation are critical to our security, for so we learned on September 11 that when there are no trans-Hudson crossings through the tunnels or through PATH, which is the rail connection between New York and New Jersey, we had ferries that took people out of Lower Manhattan and to New Jersey hospitals. Multiple modes of transportation is not only about economic opportunity, it is about security in the post-September 11 world. Yet the budget cuts $224 million from Amtrak, which is how we send our businesspeople to sell their products between cities, go to great research universities and to hospitals to be cured. You would be forced to take the car, buy the gas, burn the fuel, fight the traffic, and park in the city to get to your interview. Is that how we invest in our infrastructure? Is that the type of smart growth that will help us achieve a greener, cleaner future?

When you park the car and walk to your interview you expect to have enough police on the street to protect you from gangs and criminals.

Well, this Republican plan cuts the National Drug Intelligence Center by $11 million; law enforcement wireless communications by $52 million; the U.S. Marshals Service by $10 million; the FBI that deals with domestic terrorism by $74 million; State and local law enforcement assistance by $256 million; juvenile justice by $2.3 million; and the COPS Program that puts police on the street and provides them with state-of-the-art equipment they need by $600 million; $600 million from the COPS Program means fewer cops on the beat.

Are those the kind of cuts that we want.

Are those the kind of cuts that will keep our communities safe? Are they smart cuts that reflect our values in a post 9-11 world?

Let me also mention one thing that is not specifically a cut in the Republican plan, but something it does that runs contrary to our belief as a nation that the air we breathe should be clean and safe.

The legislation presented by the Republicans eliminates many environmental protections with cuts to the EPA's budget, but it is also loaded with policy riders designed specifically to gut the Clean Air Act.

I believe that is wrong. I believe it runs contrary to American values, and I consider any attack on the Clean Air Act to be an attack on New Jersey.

Because of the emissions of dirty, old out of state coal plants, every county in my State is deemed to be out of compliance with the Clean Air Act. One of these coal powerplants is the Portland Generation Station just across the Delaware River in Pennsylvania. It emitted 30,000 tons of sulfur dioxide in 2009--almost three times the amount of all seven of New Jersey's coal plants combined.

This sulfur dioxide wafts into Warren, Sussex, Hunterdon and Morris counties and acts to cause and exacerbate a whole host of respiratory illnesses from asthma to heart disease.

We simply cannot gut the one piece of legislation that protects the very air we breathe and makes it safe for our children to go out and play without fear of being sick. This Republican plan that guts the Clean Air Act does not reflect our values as a Nation. It is simply not reflective of who we are, what we want this Nation to be, or what we want for our children's future.

The list of H.R. 1's short-sighted dis-investments in this Nation's future goes on and on. ``Show me your budget and I'll show you your values.''

The Republican proposal before us is, in my view, an affront to American values, not a reflection of them.

I for one do not believe for one second that it reflects who we are and what we want this Nation to be.

I do believe that at a time that we are finally growing this economy, these indiscriminate cuts, as many economists have said, will throw this economy right back to the deep recession we are coming out of. That means fewer jobs here in America. That certainly cannot be part of our values. That is why I will be voting against H.R. 1, to protect American values and protect American jobs.

I yield the floor.

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