Mr. Speaker, I thank the gentleman from New Jersey (Mr. Pallone) for yielding. This month marks the beginning of the third year of the Bush recession, and I would like to say that even if the Clinton administration is being blamed, it is…
Mr. Speaker, I thank the gentleman from New Jersey (Mr. Pallone) for yielding.
This month marks the beginning of the third year of the Bush recession, and I would like to say that even if the Clinton administration is being blamed, it is on this administration's watch that these things are occurring. Across the Nation workers continue to lose their jobs on this watch. Nationwide 800,000 laid-off workers lost their benefits on December 28, and I appreciate the 13-week expansion that was signed today, but I think 26 weeks would have been more likely, more acceptable, and make a better difference.
In my own State, the State of California, our budget deficit has mushroomed to 35 billion, with a ``b,'' dollars, while unemployment has risen by 6.5 percent, and that is only those that can be counted who are still in the system. Many have dropped out of the system, do not even report for unemployment, do not even report seeking jobs. They are just out there on the streets. So I am sure in my district this number would be higher.
As millions of people are out of work and the economy continues in a weak and jobless recovery at its best, it is important to have a strong and immediate economic program that will put money in the hands of consumers now. I am sorry to say that this administration has been more consumed with initiating a war than it has been with initiating a domestic economic policy that will benefit this country and make it stronger in defending against those who would attack us.
Earlier this week the President announced his plan to deal with this slow economy. Why were we not talking about it last year? Why did we have to go through the Christmas holidays with parents wondering if they could afford to buy gifts for their children? Are parents wondering if they can keep shelter, keep a roof over their heads? We knew the economy had slowed, but it was just this week that finally the administration awakened. This was the President's chance to ask Congress for real job-creating plans, to immediately address the economic problems faced by that working class ordinary Americans. Instead, the President chose to stick with more of the same tax schemes that he tried last year.
I wonder if anyone noticed except me that in September a year ago when the tax cut plan was passed that we saw more bankruptcies, corporate misconduct was revealed, and we were in a mess. We saw the jobless rate grow. Now, if the tax cut was meant to stimulate investments in business, it had
the opposite effect, and I would be truly concerned if I were the administration why there were so many bankruptcies when we gave a tax break to corporate America. What happened? I think I know. All we need to do is watch any program that deals with wealth and the wealthy in this country. We will see that they are building larger homes in exotic places, 3,800 square foot homes for these executives of these companies that have gone bankrupt, larger yachts, are buying more business but not employing more people. Some of the biggest corporations cut staff, pare down. Somebody ought to explain that. These policies were skewed to favor these same wealthy Americans, and to think that we have a homeland security proposal that allows a lot of these business owners to escape paying their fair taxes and run to other exotic places to hide their companies I think is un-American. His plan will blow an even bigger hole in the budget and threaten economic growth, and only 15 percent of the Bush package will take effect this year, meaning that most of the economic impact of the program would not be felt until 2004 and thereafter. The centerpiece of the plan, the complete elimination of taxes on stock dividends, and think for a second, many of the people I represent do not know what a stock dividend is. Investing dollars? Are we kidding? They are trying to pay their rent. They are trying to pay their house notes. They are trying to send their children to college if they can even get through elementary, middle school, and high school. They are trying to keep their families together. So they are not the ones that are going to feel any benefit from the elimination of these taxes. And they say it will benefit the seniors. Certainly I think today when you get 50 years old you can claim being a senior, and certainly the guys and gals who have made the big money are in their 60's and they can sit back with all this money flowing in because they do not have taxes to pay. It certainly will benefit them, but it certainly will not get to the people that really make up the core of America. So it primarily benefits this elite class, the wealthy, instead of putting money in the hands of the hard-working Americans who keep this country going.
According to preliminary estimates of the Nonpartisan Tax Policy Center, 45 percent of the benefits of the entire Bush proposal would go, and now get this, do not take my word for it, check it out yourself, but the benefit will go to the top 5 percent of taxpayers who have an average income of $350,000. In fact, those making over a million dollars will see an average tax break of $88,000-plus, more than a hundred times the tax cut for the vast majority of taxpayers making less than $75,000. Do not take my figures. Do the math. Be analytical in your thinking. Look at the President's proposal and see who fits the description of the provisions in it.
As the nonpartisan Congressional Budget Office concluded last year, tax cuts that are targeted towards lower income households are likely to generate more stimulus dollar for dollar of revenue loss, that is, be more cost effective and have more bang for the buck, than those concentrated among higher income households. This is because higher income families are less likely to put that money back into the economy by spending it. So by targeting their tax cuts on the wealthy, the Bush administration has undermined its stimulus effect. Look what happened with the last tax cut.
Furthermore, the Bush plan would worsen the current budget deficits. Anybody concerned about deficits today? I remember several years ago they were. But the Bush plan would worsen the current budget deficits that have ballooned since the Bush administration took over. Check it out. The Bush plan would increase the deficit by nearly $700 billion over 10 years, and I do not think there is any argument over that. We are dealing with concrete numbers. Not only does this threaten key investments like Social Security and Medicare, this growth in deficits would promote higher interest rates and threaten to worsen the economy instead of spurring economic growth. Where is the concern of current Republicans? And I remember under the Newt Gingrich era, they were very concerned about deficit. Maybe it is amnesia.
Democrats have put forth an alternative stimulus plan, one that delivers a real immediate boost for our economy. The House Democratic alternative, economic stimulus package, is fast acting, fair, and fiscally responsible. Does anyone care about fiscal responsibility, or is it smoke and mirrors? It focuses on jump-starting the economy now and quickly moving the United States to a long-term growth agenda. It does not deceive people. It does not make people buy this fluff and try to feel good about it when it is not real. Our package is.
The Democratic economic stimulus plan aimed at those who need it most avoids increasing the deficit and helps States that are deeply suffering through this recession. Not only California but across this country, States are suffering. We ought to have the governors in here to debate these proposals. The Democratic plan will immediately target $18 billion to extend unemployment benefits for laid-off workers who have already exhausted their claims and in addition provide more needed relief to cash strap States and localities. The Democratic plan also provides immediate tax relief for small businesses to generate investment and jobs. It allocates additional funds for transportation, homeland security, healthcare, and extends unemployment benefits for workers whose insurance has run out and who have been unable to find jobs. The plan also puts money in the hands of consumers who drive the economy by giving a $300 tax rebate to every working American and also $600 for couples. Unlike the Republican tax plan which favors the wealthy by providing tax cuts on stock dividends and does little to grow the economy, the Democrats' stimulus package focuses tax cuts on lower and middle class taxpayers and actually will cost less than Republican plan.
In addition, the Democratic plan will spur the economy by providing funding for homeland security. Let us make America secure on the real side that targets rebuilding our Nation's long-neglected infrastructure. Most importantly, the Democratic plan is fiscally responsive and fair. It provides the proper amount of targeted economic stimulus and, at the same time, will not impact the budget deficit.
So in closing, I would like to say, Mr. Speaker, I appreciate this opportunity to discuss the two plans and to give some real numbers and real figures. I represent one of those States that is sorely in need of help. But of the $35 billion deficit, that is with a ``B,'' we cannot cut enough and we cannot raise enough taxes to fill in that gap. We need to put America back to work. We need to put Californians back to work. We need to generate real jobs.
Mr. Speaker, I want to request from the gentleman from New Jersey (Mr. Pallone) if we can do a side-by-side chart on the cost of waging war in Iraq. I understand we have several thousand troops already over in the Middle East, and possibly the dispute with North Korea might require us to commit dollars.
I would like to see a chart with the cost of war and the cost of nationbuilding if we are trying to create a new regime. What is our commitment going to be to this new regime that we have called for? I can tell the Members from my own experience as the ambassador to the Federated States of Micronesia, they were a trust territory until 1986. In 1986, we signed a compact of free association with them that was to last 15 years. It has cost us $5 billion, and we are getting ready to sign on another 20 years.
Now, I saw taxpayers' dollars go into the ocean. I was there. I knew. We had to close down some programs because that money was going into people's pockets, and into building homes for the very wealthy and the families of the very wealthy. We were not monitoring it.
I came back here many times saying, give me not only audits but oversight and follow-up; get the FBI out here, because our money is being taken. I could not get anyone to listen. I left; the problem got worse. Ask the current ambassador.
What is going to happen in Afghanistan in the long run and in Iraq in the long run? We talked about the axis of evil, so let us talk about Iran, too, and let us talk about North Korea. We did not say that; the President stood on this floor and talked about the axis of evil. Getting rid of the evil means changing those who are running those countries now. What is our obligation as Congress, as the Federal Government, and taxpayers? All this has to be
taken into consideration in terms of the proposed tax cuts.
If we talk about homeland security, how do we secure our own home if we cannot even educate our children, if we cannot even improve our infrastructure, if we cannot set out a budget for first responders? In my own city of Los Angeles we only have 9,000 police officers, as compared to Giuliani's New York with 30,000. We have 2 million people.
So are we sincere about protecting our homeland? That means not the home land, that means America's people. What is our plan for seriously doing that? I just wanted to put that out as we go about looking at the budget. I think it is very important to be heard. That is why I said it.
We are cutting our revenue base, and we are fighting a war over 10,000 miles away that we really do not need to fight, we really do not need to fight.
Let me say, we are a member of the United Nations. We went to the Security Council. They have their inspectors out there. If they do not find what they are looking for, it needs to go back to the Security Council.
We are working on an assumption, and North Korea says, we have your bomb. The monies that we give them for food and so on, does it really get to the people? If it did, why do we have such massive starvation over in North Korea? And I do not see why we are treating them any differently than we are treating Iraq.
Where is our commitment? How do we secure the United States? A country is only as strong as its people, and we cannot let the general public forget that. I thank the gentleman.