Jobs And Growth Tax Relief Reconciliation Act, 2003--Conference Report
Mr. President, I rise today to express my opposition to the conference report on the tax cut legislation that the Senate just considered. I find it regrettable that we were forced to speed through debate on the tax cut bill last week, and…
Mr. President, I rise today to express my opposition to the conference report on the tax cut legislation that the Senate just considered.
I find it regrettable that we were forced to speed through debate on the tax cut bill last week, and were once again forced to hurry through this conference report. This is probably the most important bill that we will be debating and voting on this year. Its repercussions will be felt for years to come, and yet it seems that very little thought has really been given to it.
Regrettably, I could not in good faith support this Reconciliation in its current form for three reasons.
First, it will be ineffective in reviving the economy now.
Second, it is irresponsible insofar as it adds tremendously to the national debt for no compelling purpose.
Third, it is unfair to working families across the country insofar as it drains resources from investments in education and health care to fund tax breaks that overwhelmingly benefit the most affluent.
I will discuss these points in turn.
First, the resolution we have before us fails to effectively address the needs of our country. Instead of investing in a stronger economy for the future, the conference agreement provides little assistance and stimulus to our struggling economy now.
In the nearly 2\1/2\ years since the President has come into office, our nation has suffered a dramatic decline. We went from unparalleled job creation, economic growth, and opportunity to skyrocketing deficits and national debt, high unemployment, and uncertainty about the future.
Contrary to the claims of its proponents, it is by no means certain this conference agreement will create jobs or provide millions of working families with the relief they need. What is certain, however, is that it will drastically increase the national debt, and severely weaken key national priorities including homeland security, education, and health care.
According to Economy.com, the massive deficits that will be caused by the administration's tax cut will decrease gross domestic product by 0.25 percent annually beginning in 2005. GDP will be lower by 1.0 percent in 2013 than it would be without the Bush plan. The result is a loss of 750,000 jobs by 2013 according to Mark Zandi, a well-respected, non-partisan economist at Economy.com.
The administration's policies are not considered to be ineffective on a partisan basis, they are considered to be ineffective on a bipartisan basis, as well.
Republican Senators have voiced concern about the ineffectiveness and irresponsibleness of this proposal.
The Chairman of the Federal Reserve has said that these large tax cuts, if not paid for by offsetting cuts in spending, will drive us deeper into deficit and that such high deficits and debt will actually hurt our long-term economic growth.
Other respected conservative economists have also warned us about the direction we are taking. For instance, AEI economist Kevin Hasset stated that the proposal, by cutting taxes in one year and then raising them in another, ``is one of the most patently absurd tax policies ever proposed,'' Similarly, Robert Bixby of the Concord Coalition said that the tax plan passed by the Senate just keeps ``building one gimmick on top of another gimmick.''
However, this administration continues to turn a deaf ear to their warnings, as it pursues its discredited economic theories.
Second, this conference agreement is irresponsible.
Two years ago, economists projected record surpluses; now they forecast record deficits. Recently the Congressional Budget Office raised its estimate of the deficit this year to more than $300 billion. This is the largest federal deficit ever in the history of our country. And it does not include the tax cut that is before us.
It is a fact that high deficits mean an increase in long-term interest rates on small business loans, families' mortgages, and education loans. These deficits therefore act as a hidden tax on working people.
Also the cost of all of the President's tax cuts and the deficits will explode just as baby boomers start to retire. Over the next ten years, more than $2 trillion will be raided from Social Security in order to pay for the President's tax cuts and spending plans. The Social Security surplus is going to be consumed.
Last month, Congressional Budget Office Director Douglas Holtz-Eakin said that the retirement of the baby boomers will drive spending on Social Security, Medicare and Medicaid alone from 8 percent of the economy's output today to 14 percent in 2030, and to 21 percent by 2075. When you also consider national defense, homeland security, education, health care, and other vital national priorities, you are left with a fiscal breakdown. But again, the administration is ignoring these warnings.
At the very time the President is asking for massive tax reductions, he is also asking for the largest debt limit increase in the history of the United States. He is seeking an increase of $984 billion. The President has dug this economy into a debt hole. He needs to stop digging. Yet, instead, he is reaching for a bigger shovel.
From coast to coast, states are facing the most serious fiscal crisis since World War II. States are in need of fiscal relief now. In Connecticut, we know that all too well. While there is a State relief package in the conference agreement, the overall agreement is going to
hurt States not help them since this legislation will mean less resources for Connecticut and other States to invest in infrastructure, education, homeland security, and health care for needy children and the elderly.
Americans all over the country have expressed their opinions in poll after poll. They believe that we should not be passing a massive tax cut if it means cutting Medicare, if it means cutting social security, and if it means cutting education. This conference agreement ignores the concerns of the American people.
Third, this tax bill is unfair to working families.
Yesterday's Wall Street Journal had an article that says that through the President's tax proposal, some affluent investors may be able to avoid paying almost any taxes. Their tax bill would be almost near zero. This is unfair to middle-class Americans.
It is bad enough that we are going to force our children and grandchildren to shoulder the costs of this tax cut.
It is bad enough that this costly and irresponsible tax cut will bring about an average tax cut of $93,500 to tax filers who earn more than $1 million, while those households in the middle of the income spectrum, which includes the average family in Connecticut, would receive a tax cut of about $217.
It is bad enough that according to an analysis done by the Tax Policy Center, 36 percent of all U.S. households would receive no tax cut whatsoever in 2003 under the conference agreement, and 53 percent of households would receive a tax cut of $100 or less.
This bill also fails to address a crisis affecting Americans and small businesses--the burden of the high costs of health insurance. In the past year alone, health care premiums for businesses have risen more than 13 percent. This is extremely burdensome for small businesses, which employ 50 percent of the workers in this country. The Democratic alternative to the tax bill, which did not pass, provided small businesses with a 50 percent tax credit in 2003 to help pay their share of insurance premiums. This conference agreement that is before us contains nothing to assist small businesses that are struggling to keep their employees insured during these times when cash is tight and health care costs are rising.
In order to fit the massive tax breaks for the most privileged into the $350 billion limit that was agreed upon, the marriage penalty relief and the child tax credit increase will expire next year, which means a tax increase of $850 for a family of four with an income of $40,000 in 2005. Also, the small business expensing and bonus depreciation provisions, which would encourage business investments and provide them with needed relief, will also expire. This is essentially increasing taxes on small business owners.
In closing, I believe that the conference agreement before the Senate fails the test of common sense. It also fails the test of common decency. At a time of war, at a time of economic stagnation, at a time of rising national debt, and of rising national concern about how we will educate America's children and care for the health needs of our people, one might expect our national leaders to pursue policies calling for shared sacrifice to achieve shared benefits. Regrettably, that is not the case. This administration has a clear vision: to benefit the privileged few even if it means sacrificing the hopes and aspirations of the rest of the people. We can do better as a Senate, and do better for our country.
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