Issues Before the Senate

CONGRESSIONAL RECORD
SENATE
Sept. 7, 2004
ISSUES BEFORE THE SENATE

Mr. HARKIN. I ask the Senator to yield. I thank the Senator for her very perceptive and very sensitive approach on this issue of what is happening with our troops in Iraq. The Senator from Nevada is absolutely right about this, that this war is different than any we have ever had. I suppose the good news is we are saving a lot more lives than we have ever in the past. We are there with our medical equipment, as the Senator said, as well as because of body armor and a lot of other things. But what we are also experiencing, as the Senator from California pointed out, is a higher level of individuals with severe injuries, injuries that not only won't allow them to return to active duty but will mean they are going to carry their burdens the rest of their natural lives, for them and their families.

What is unanswered, among all the other things that are unanswered-how we are going to get out of Iraq, how we are going to protect our troops better, how we are going to get other countries to come in, how we are going to pay for it, endless questions-the one nagging question, which I believe the Senator from California has just put her finger on, is: Will we, will this administration, and will this Congress commit itself to ensuring that these young men and women who have been so severely injured will have the supporting mechanisms, the educational benefits, the kind of things that are needed so they can live a full, rich, productive life here in America? That has never been committed to by this administration.

When the President says he wants to stay the course, is that one course on which he wants to stay, I ask my friends, that we will not commit ourselves to making sure these brave young men and women are taken care of, that all their medical needs are met, but more important that they are able to lead full, productive lives here in America?

Mrs. BOXER. Absolutely. The sad truth is we got a copy of their budget.

Mr. HARKIN. That is right.

BREAK IN TEXT

Mr. HARKIN. I thank the Senator from California for her very clear presentation today. What is happening to make America weaker? We are getting weaker all the time. As the Senator from California pointed out, we are getting weaker because our seniors now are denied the medical care they need and ought to have. We are getting weaker because our deficits are going up at an alarming rate. We are getting weaker because we are getting sucked further and further into the quagmire of Iraq with no end in sight. We are getting weaker in this country because the middle class is getting squeezed. The wealthy are getting the tax breaks.

I am beginning to think that George W. Bush stands for George Weaker Bush. Weakening America, that is what is happening in this country. We are weaker than what we were.

I thank the Senator from California for her very perceptive analysis and for her continued progressive views on turning our country in the correct direction.

I like the expression, what the Senator from California said about President Bush, saying he wants to stay the course or don't turn back. Don't turn back.

Mrs. BOXER. Right.

Mr. HARKIN. It seems to me, if you are on a highway in a car, and you are headed towards a cliff and there is a bend in the road that you can take and it will save you, what sense does it make to keep going straight off the cliff?

Mrs. BOXER. Good one.

Mr. HARKIN. That seems to me what the President is saying: Stay in the car with me. I do not change course.
We are already kind of over the cliff. We are going to go down it.

We could make some changes in our economic policy, our fiscal policy. Certainly, we can make changes in our foreign policy, in our policy in Iraq, to turn this country so we do not continue to go off the cliff.

I guess the President says that he knows where he is going. There is one thing about being resolute in one's determination to do certain things. But there comes a point where you are stubborn in the face of facts and reality. I am afraid this President does not realize the difference between being resolute and carrying out policies, and being stubborn when those policies are hurting America and making us weaker.

I want to change the focus of the discussion. I want to talk about the economy. This morning the Congressional Budget Office announced it now projects this year's budget deficit will rise to $422 billion, an all-time high. Actually, if you look at this chart, if you look at the red, that is the budget deficit of $422 billion for 2004. But if you exclude Social Security surplus, the budget deficit is really $574 billion.

Bear in mind, this comes from a President who originally pledged he would not run deficits and he would protect Social Security surpluses. Talk about flip-flopping, this is the flip-flop of all time.

Now we see these deficits are not only huge but they are going to continue as far as the eye can see. It is shocking when we look at where we were 4 years ago when we had an all-time-high budget surplus and we could see these surpluses continuing on through this decade when we were strong in the world, when we had other countries supporting us, and now to see where we have come in 4 short years.

Right now our operating budget deficit, without counting the Social Security surplus, is about 5 percent of the gross domestic product.

Last year the President's Council of Economic Advisers predicted normal job growth would be 228,000 jobs a month, about the average level during the Clinton administration. The Council of Economic Advisers said the job growth would be even more if we passed the 2003 tax bill which was done. It said we would create 305,000 jobs a month. Unfortunately, over the past 3 months job creation has been about one-third that rate. A million jobs have been lost since Mr. Bush took office.

It seems to me the appropriate question to ask is are we better off today than we were 4 years ago as a nation? Again, look back. It seems almost like a distant utopia when I read the figures. We were the envy of the world in 2000, with 23 million new jobs created and the largest budget surplus in U.S. history-$236 billion in 1 year. But now, 4 years later, we are weaker in almost every respect in this country.

Data released by the Census Bureau paints a very disturbing picture. Since Mr. Bush took office, real median household income has fallen by $1,535. During the Clinton administration the real median household income went up $5,489. Look at the difference. Median income up under the Clinton administration, median income down $1,535 a year under the Bush administration.

Then look at poverty. The number of Americans living in poverty has risen by 4.3 million under President Bush through 2003. During the Clinton administration, 6.4 million Americans were lifted out of poverty. In 4 years of Bush, 4.28 million have been driven into poverty.

Is that progress? We should stay the course? We should not turn back? I would love to turn back to the economic policies of the Clinton years. No. This President says no, stay the course.

In every single way we are weaker.

The number of Americans without health insurance has gone up 5.2 million in the last 4 years. The policies of this administration have weakened our economy. They have depleted our Federal Treasury. They have made America a weaker country.

Now look at taxes. A new study by the Congressional Budget Office tells us the real story. The share of taxes borne by those making more than $1 million a year was reduced by 10 percent thanks to the tax cuts of this administration. But the share of taxes borne by the middle-income taxpayers actually increased by almost 5 percent. Meanwhile, interest on the public debt because of these huge deficits will nearly double in the next 4 years. By 2009, every year we will be paying $1,000 in interest for every man, woman, and child in America. That is $4,000 for a family of four. It is making our future weaker.

We hear a lot of talk from this administration about doing away with the so-called death tax, the tax on accumulated wealth-so-called estate taxes-the idea being that we don't end up with those with billions of dollars being able to pass it all on while average Americans have to face more and more debt. The Bush administration says they want to get rid of the estate tax.

What about the birth tax? What about the tax this administration is leveling on every child who is going to be born in America in the future? Every child born in the United States henceforth will have $1,000 taxes put on his or her head as soon as they are born. No one is talking about the birth tax. We ought to be talking about that rather than trying to have the wealthy pay a little bit more fair share of their taxes in this country.

Again, because of the interest on the national debt, a family of four, as I said, will be paying $4,000 a year. Guess what? That is one tax that cannot be cut. Who is going to be paying it? Middle-income taxpayers, $4,000 a year. That is a new birth tax on every child born in America. But no, we do not hear the administration talking about that.

The real reason the economy is so weak is that for 4 years the Bush administration has been preaching fiscal conservatism, but has been practicing a reckless "damn the torpedoes" brand of fiscal radicalism. We have had a radical fiscal policy over the last 4 years. The Bush team sees cutting taxes as the be-all and end-all of their political existence. For them, cutting taxes is not an economic plan; it is not even an ideology. It is a theology of one size fits all. If the economy is weak, you cut taxes. If the economy is strong, you cut taxes. If there is a surplus, you cut taxes. If there are huge deficits, you cut taxes. You have a war on terrorism, cut taxes.

How many Americans realize that the wars in Afghanistan and Iraq are the first wars in American history to be paid for and financed by tax cuts? In the past, we have always asked the American people to help fight our wars by paying increased taxes. Now tax cuts for the wealthy, birth tax on the kids of middle-income taxpayers, more costs for medical health for the elderly, and the deficit continues to go up.

As I said, this year it is really $577 billion, not $422 billion-$577 billion. That is because you have to count the Social Security surplus.

The President says stay the course, don't turn back. For 4 years this President and his team have pursued policies that have led to deficits, debt, drift, and decline. He is leaving a dramatic and weakened economy and Treasury to his successor and to the next generation.

We have to do better. We can do better. The answer is not to stay with the driver of the car who is going to drive you over the cliff because he is too stubborn to recognize what is weakening America. The answer is to modify our policies, change our course to build a brighter and a stronger and better America for our children and grandchildren. Vice President Cheney famously asserted that "deficits don't matter." I couldn't disagree more. So do all mainstream economists. The truth is deficits do matter and they matter profoundly. Chronic, long-term deficits that we now see mean the Federal Government must accumulate huge and growing debt held in bonds. That means the Government is competing with limited dollars and crowding out other borrowers. This puts other pressure on interest rates. That is bad for job creation.

Second, as the Government's debt increases, it is harder to find resources to make investments here at home in our roads and our bridges, our schools and educational systems. That means a less efficient transportation system and as less skilled workforce. That is bad for business.

Third, as we are already seeing, a far larger share of our Government's bonds are being bought up by foreign governments. Japan, China, and South Korea have particularly heavy purchases of our bonds.

Should that be a worry? It means their future decisions can have a major impact on our economy. In the long term, sooner or later we have to expect the dollar to fall dramatically if our policies don't change. That will hurt our economy by driving up inflation as we pay more for the imports that come into our country.

Lastly, as I have said before and I will keep repeating it, it is especially troubling for the young people in America for them and their future; for our obligations that we have to meet the obligations of the baby boomers who will soon retire and make sure we keep our commitment to them to meet their health needs and to make sure Social Security is sound.

We do not make Social Security sound by driving us further and further into debt. We do not solve the problem by privatizing Social Security. We already see in the private sector more and more retirement plans under fire. United Airlines and others. Now they want to take Social Security and put it out there on the stock market, too.

Lastly, our incomes are down in America. We know that. What is the answer of this President? Cut overtime. A couple weeks ago the President put into effect administration rules that will take away overtime pay protection for over 6 million Americans. Before that rule was promulgated by the administration, they never had one public hearing.

Thanks to the Senator from Pennsylvania, we did have a couple of hearings-two or three-in the Senate, but that was after the horse was out of the barn. At least we had the hearings. Every time we had the hearings, it became clear the overtime rules were going to hurt working Americans; that they were not going to clear up, as they said, ambiguous rules that already existed; that, in fact, this was an assault on overtime. It was a way of allowing employers the ability to redefine what you do as a worker, to reclassify you, have you work over 40 hours a week, and not have to pay you overtime. That is what is happening.

Lastly, the income tax of this country is moving away from being an income tax. It is under this Administration becoming a wage tax. If you work and you make wages, you get taxed. However, if you have investment income, dividend income, and a bunch of other things such as that, well, under the President's plans, you will not have to worry too much about paying taxes anymore.

So what we will have in America is a work tax. If you work for a living and make a wage, you will pay taxes. You pay the full brunt of taxes. But if you are a very high income person, and most of your income is off of dividends, your taxes have already been sharply reduced and if the President's wishes come to pass, you do not pay much in taxes.

We are robbing our kids. We are hurting our elderly. We are making America weaker and weaker as every day, every week goes by in this crazy economic policy of this administration. I cannot think of any other word for it other than to say it is beyond the pale. I don't mind an administration that takes a chance, that has maybe a new economic theory to test. OK, fine. But when it proves, year after year after year that it does not work, why keep doing it?

Someone once defined insanity as doing the same thing over and over again and expecting a different result. Why do we keep trying the same economic policy year after year after year? We see the same results: higher unemployment, less family income, more people in poverty, higher deficits, higher debt. Yet the President says: Keep me as your driver, stay in the car, as we continue to make America weaker and drive over a cliff.

It is time to change course in this country. It is time to put our country back on a fiscally sound basis in this country or else this country is going to be facing even larger deficits, bigger debts, more foreign countries buying more bonds. As the old saying goes, he who pays the piper calls the tune. I am afraid a country that owns all of our debt will call our tune and that will be the ultimate weakness for America.

I yield the floor.