Stimulus Package

Floor Speech

STIMULUS PACKAGE -- (Senate - January 29, 2008)

Mr. HARKIN. Mr. President, I thought I would take a few moments to talk about this stimulus package that is sort of maybe making its way through the Congress.

I was in my home State of Iowa this weekend, and a lot of people came up to me, from various walks of life, questioning whether we had lost all our sanity around here in terms of this stimulus bill.

Well, as I probed and asked questions, it seemed everyone thought this idea of just sending a check out to everybody--when we are borrowing the money from our kids and grandkids--to do it did not seem to make much sense, especially if some of that so-called stimulus money is used to buy a flat-screen TV made in China.

So we borrow money from China, we go into more debt to them--which our kids and grandkids and great-grandkids and on and on will have to pay for--so that people here can buy a consumer good made in China, and send the money to China. So whose stimulus is this? Is it for our country or is it for China? So people really rightfully question it.

Now, they have heard that maybe we are going to send a check to everybody regardless of income, that Bill Gates--and God bless him; he is always the foil, I guess, for the wealthiest in our country--and people of that magnitude of income would actually get a check.

I have to believe people are beyond laughing about this now. I have to believe the citizens of this country are scratching their heads and wondering just what are we doing.

What I heard from my constituents in Iowa is that if you really want to do something in terms of the economy, first of all, you take care of those who are hurt the most, those at the bottom, and then you take and you invest money in the economic well-being of this country.

So the more I talked to people about this issue, it became very clear to me that what we should be focusing on in the stimulus package--not what the White House has said and not even what the House said. I was not part of that agreement. I was not invited to those talks or anything else. It was only done by the Speaker of the House, I guess, and the minority leader of the House and the President. Well, there are 100 Senators here, too, and we represent people. It would seem to me we should have some input into what this ``stimulus package'' is.

So it is clear to me that just taking a bunch of money we borrowed from China--which our kids and grandkids have to pay back--and giving it in a check to everyone, just throwing it out there, is just throwing money at the problem. How many times have we heard around here: Don't just throw money at the problem. So if we have an economic slowdown, let's target--let's target--what it is we are going to put our money into.

Now, first, you want to ask the legitimate question of, if you are going to spend a dollar, what gives you the most economic activity? What rolls around the most in the economy? What has the largest multiplier effect? Well, the Economic Research Service, the Moody's have all said that the biggest bang for the buck we could get is in food stamps--either a 1.73 or a 1.84 multiplier effect. It means for every $1 you put in, you are getting $1.84 more in economic activity. That is the highest. It dwarfs everything else. Here is a way we can actually do something about the economy, target money and help those who need help the most.

We have had a constant erosion in food stamps, a 30-year erosion in the asset level. The asset level right now for a person who qualifies for food stamps in this country is $2,000. In other words, if you are a single parent with a couple of kids and you are working--maybe you are in a temporary layoff now with the economic turndown, but let's say while you were working you saved a little bit of money for that rainy day. We are always telling people to save money. It is good for you. It is good for your future. So maybe they saved a little bit of money. Well, if they saved over $2,000, they do not get food stamps. That is the same level it was in 1977. If it had kept pace with inflation, the asset level today would be about $6,000.

So we have had that erosion now for 30 years. We have had 11 years of an erosion of the standard deduction, which is, without getting into the nitty-gritty of how it works, just a standard deduction for a family on food stamps, taking into account certain factors that comes out to be a deduction of about $130 a month. That is at the level it was 11 years ago. It hasn't changed. It was frozen at that level in 1996.

The childcare deduction is now capped at $175, and it has been that way for 11 years. There has been no increase in the childcare deduction, even though we know childcare costs more money today than it did 11 years ago. So we have had great erosions. Couple that with the fact that since 2000, the number of people on food stamps in this country has gone from 16 million to 26 million.

So while the economy may have been good for some people over the last 5 or 6 years, it was good for people at the top. But if the economy was so darn good over the last several years, why did we go from 16 million on food stamps to 26 million on food stamps? Because for those at the bottom, the economy was not very good; thus, the widening gap between the rich and the poor in this country.

So it would seem to make sense, if we are going to have some kind of ``stimulus package,'' the first rule would be do no harm, and then target it so that it is effective. Ask the economists. They all say the best bang for the buck is when you put it in food stamps. So here is our opportunity, both to have some multiplier effects and to help stimulate the economy and do what really is morally right, what we should have done a long time ago, and that is to make sure the people at the bottom don't keep falling through the safety nets.

So I say, I don't know what the Finance Committee is going to do. This is not in their jurisdiction. I understand. They can't do anything about food stamps; that is not in their jurisdiction. But when that bill comes up, and when we get it to the floor, I want everyone to be aware that we are going to have an amendment--and I will have an amendment on food stamps--to put a significant amount of money into food stamps, about a 20-percent increase in food stamps for the next year. That gives us 12 months.

Now, why 12 months rather than 6 months or 7 months or 8 months? Well, first of all, we have a farm bill in which both the House and the Senate addressed some of these longstanding problems in the food stamp structure. I don't know when that farm bill is going to get passed. The President has threatened to veto it. We will get it done sometime. Sooner or later we will get this farm bill done--hopefully, in the next month or so. But then the changes that have to take place to change the system so we can begin to increase the asset level, take the cap off of the childcare deduction, and then take a standard deduction and factor in inflation for that, that takes time. We will not get it done right away. I think it would be the height of cruelty to say to people who need this food and who need food stamps that we are going to increase it for 6 months and then we are going to take it away. Now, at least if you get a rebate--as I said, I am not in favor of all of these checks going out, but if you are going to get a check, you can save it for a rainy day or you can do something like that. But with food stamps, you can't do that. So if you get food stamps, and we say, OK, we will increase your food stamps, you can buy a little better protein, you can eat a little bit better for 6 months, and then we are going to cut it off.

Keep in mind that right now, under our Food Stamp Program, the amount of money a person gets per meal on food stamps is $1--$1--$1. Have you ever tried eating a meal for a dollar? Try it sometime.

So what we are talking about is not lavish living. We are talking about giving people just the basic necessities. So, again, this is our chance to do something that is morally right and at the same time target our help in stimulating the economy.

Second only to that would be increasing unemployment benefits. People who have been unemployed for a long time need to have it extended, to have their unemployment benefits extended. That also has a big multiplier effect. Also, close on the heels of that in terms of benefiting the economy is the money that we use to build our infrastructure; that is, the roads and the bridges, the school buildings, the sewer and water systems, government buildings. It would be things like community development block grants that we put out to our cities and communities to do construction projects.

So it seems to me, again, if we are going to put money out there, this is what we ought to be doing. We have billions of dollars of construction that is needed to be done in this country on school buildings, classrooms, bridges--need I mention Minnesota--highways. Our highway system is falling apart, that great interstate highway system that we built, and I worked on when I was in high school, well over a half a century old. Keep in mind when it was built, we didn't have the truck traffic then that we have today. So we need to put money into the infrastructure. Those jobs are ready to go by May. By the time these checks would get out they are talking about, you would have people starting to go to work.

The benefits of putting money into an infrastructure project are multiple. There are multiple benefits. First of all, the work is done locally. You can't outsource it to India or China. Obviously, if you are going to build a schoolhouse, you have to hire people locally to do it. So the work is done locally.

Secondly, almost all of the materials used in any kind of infrastructure project, whether it is cement or reinforcing rods or whether it is carpeting or doors or windows or lights, heating and air-conditioning systems, drywall--you name it--almost all of that is made in America. Maybe not all of it, but the vast majority of it is made in this country. So the ripple effect throughout our economy is great when you do an infrastructure project. You put people to work. Most of the materials and stuff you buy are American made.

Third, once you do this, you have something of lasting good to our economy, something that helps the free enterprise system function better.

When our roads and highways are plugged up with traffic and it can't move, that hurts business. When we don't have adequate clean water and sewer systems for communities, businesses can't locate and, therefore, operate efficiently. When we don't have the best schools in America with the best facilities, the high-speed hookups to the Internet, when we don't have schools which are the jewel of a neighborhood--the best thing that kids would ever see in their activities during the week would be the school--not the mall, not the theater, not the sports arena but their school. What if that was the nicest thing in every neighborhood? I tend to think that would help our teachers to teach better, our recruitment of teachers, and give kids more incentive to study. But it provides a lasting benefit for this country. So mark me down as one who is--I am just more than a little cautious and maybe a little bit more conservative on this idea of sending everybody a check. I think people would be better off and our economy would be better off if we did those three things: Do something on the food side for the people who are hardest hit in our economy, extend unemployment benefits, and put a slug of money into infrastructure.

That is what we ought to tell President Bush. That is what we ought to tell the White House. That is our program. That is the Democrats' program for this country: to put people back to work, not just to send everybody a check, but let's give everybody a job. Let's give them jobs out there that will build our country. The multiplier effect on that is enormous. But if you are just going to send somebody a check, that is it. They might just tend to buy something made in China or Japan or who knows where else. That is just not the best thing for our long-term economy and not for what we want to do in this country.

So, once again, it seems as though we look for short-term solutions to long-term problems. Our long-term problems are the infrastructure of this country and the fact that we don't have a good job base for people in this country--long-term problems. We are importing more and more and more from overseas. I listened to the President last night in his State of the Union message when he talked about how exports are up. He didn't mention how much more imports were up over exports. He just didn't even mention that. We are in hock to China up to our eyeballs, and it is getting worse not better. So we are going to send everybody $500 and tell them to go spend some money on things probably made in China.

So, again, I don't think we ought to roll over. I don't think we ought to block anything. But I think we ought to come up with a package that does something for our economy. The things I just outlined I think will do more for our economy than sending everybody a $300, $500, or maybe a $1,200 check.

Lastly, I see there is some talk about sending everybody a check--no income limit. Well, I thought the income limits in the House were too high: $75,000, $150,000 for a couple, so you could get up to 1,200 bucks. I just don't think that is logical, and I don't think it is healthy. I don't think it is good for our country. I don't think it is good for the long-term health of our economy.

So I hope we can work together in a bipartisan atmosphere to come up with a package that is not just throwing money at the problem but targets it, and targets it to those areas that will be effective in putting people back to work, helping people at the bottom of the ladder, and providing for the long-term economic underpinning of our country.

Mr. President, I yield the floor.

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