Mr. President, I rise to express my support for the budget resolution. First I would like to say that it is nice to actually have a budget on the floor in the Senate. We didn't ever get to vote on one last year, and I would like to…
Mr. President, I rise to express my support for the budget resolution.
First I would like to say that it is nice to actually have a budget on the floor in the Senate. We didn't ever get to vote on one last year, and I would like to compliment Chairman Nickles on moving this resolution swiftly through the budget committee and to the Senate floor.
We have to remember that part of our responsibility to our constituents is not to just listen to and be their voice in Washington.
We also have to respect and follow the traditions, rules and processes of our duties that have been entrusted to us.
Whether it is following the committee process to get a bill to the floor, or allowing an up or down vote on a president's judicial nominee, we have to remember that the Senate is only as great as those who serve in it.
I think the Senate suffered last year when for the first time in nearly three decades we did not even consider a budget resolution.
It then took us almost a full year to get all of our work done. We didn't pass last year's appropriations bills until just 2 months ago.
Last year we failed and we have to improve. The result was a broken process that limped along for months and months. This year we have to do better and I believe we will.
We face a tough budget for 2004. While I am happy the budget resolution before us balances the budget within 10 years, we do face some large deficits in the near term.
These large deficits primarily occur because we have had a steep decline in revenue.
Contrary to what some of my colleagues try to argue, our revenue problems are caused by a weak economy and not tax cuts.
The evidence is overwhelming that tax cuts stimulate the economy. They create jobs, and increase economic activity, that leads to more revenue.
And that is why we need tax cuts now--to get the economy out of a rut and to help improve the budget forecast.
If American businesses are not generating profits, if American workers are not working, the result is a lot less money coming into the Federal Government through various taxes.
Decreased tax receipts do not mean taxes are too low; they mean the economy is too slow. We cannot make these budget numbers look better in the long term without a strong economy.
Many of my friends argue against tax cuts and at the same time complain about falling revenues.
If they really want to increase federal receipts and provide more funding for their favorite programs, tax cuts are the answer.
Our budget committee, under the leadership of chairman Nickles, has crafted a strong budget.
Besides this budget outlining our federal spending priorities, it also addresses one of the most important challenges facing our country today--strengthening the economy.
At its core, this budget recognizes that we must grow our economy. That is why the budget committee chose to include a jobs and growth package at the very core of this budget and to include that package in reconciliation.
We have a fundamental responsibility to the American people to make
this economy stronger and to return it to a growth pattern we have enjoyed in the past.
Many here have expressed concerns for our men and women who are fighting for our freedoms and to liberate the people of Iraq.
We all pray for their safety and their quick return home to their loved ones. But in addition to our responsibility to do what we can to insure their safety overseas, we must also focus upon our responsibilities to them when they return.
While we continue to pray for a quick and decisive end to this war, we have to think about what our soldiers and sailors will have to come home to.
An economy with an unemployment rate of 5.8 percent is not good enough. An economy that's barely growing is not good enough.
We have to do better. We have to make sure they have choices and opportunities in the American job market that will allow them to support themselves and their families.
It is not going to do us any good to win the war and lose the economy. We have to do both at the same time.
We have to get this economy moving and Americans working. And the jobs and growth package included in this budget resolution is the answer to our economic troubles.
The council of economic advisors estimates that this economic growth plan will create 510,000 new jobs in 2003 and another 891,000 new jobs by the end of 2004.
The business roundtable estimates that around 3.5 million jobs will be created over that same time frame.
Between these two estimates, that is 1.5 million to 3.5 million Americans that will not be working over the next two years if we eliminate the President's growth package from this budget.
The majority of the Budget Committee believe strongly in the wisdom of this jobs and growth package. And that is why we provided for the package under the special procedures of reconciliation.
Through the accelerated procedures provided by reconciliation, we will be able to enact changes to help our economy sooner rather than later. The faster we can implement these policies, the better it will be for all of us.
While the details of any growth package will be determined by the Senate Finance Committee, I hope that any bill that comes out of that committee, on which I serve, will include many, if not all, of the proposals that have been put forward by President Bush.
High on the list are the acceleration of a number of proposals we passed in 2001 which are scheduled to totally phase-in and become effective in later years.
The President's plan will immediately increase the child tax credit to $1000. This will benefit over 25 million American families--342,000 of them in Kentucky.
The President's plan will accelerate the expansion of the 10 percent tax bracket--which benefits all American taxpayers. Over 69 million taxpayers will benefit from this provision, including 879,000 Kentuckians.
Over 35 million married couples--almost 500,000 of them in Kentucky-- will benefit from the President's acceleration of marriage penalty relief.
We also accelerate the reduction of the marginal tax rates. It is estimated this will provide 28 million taxpayers with a tax cut-- including the 85 percent of America's small businesses which pay personal income taxes rather than corporate taxes.
Approximately 79 percent of the tax relief provided by accelerating the reduction in the top bracket to 35 percent would go to small business owners. As my colleagues are aware, it is the entrepreneurs and small business owners which create two-thirds of the new jobs in the United States.
Another component of the President's jobs and growth package is the elimination of the double taxation of dividends.
This could be the most effective provision of all of the President's proposals contained in the President's budget. But because of the usual class warfare mantra from its opponents, it may be the toughest to sell.
Half of all households in America own stock and 50 percent of all dividend income goes to our country's seniors. So a reduction in the tax rate that dividends face--currently in the range of a 60 to 70 percent marginal rate--could have a real impact on our economy by allowing more dollars to be spent by consumers.
This reduction in the double taxation of dividends not only assists current dividend recipients, but it assists all who own stock.
Some private-sector estimates indicate that market increases from this proposal could be up to 20 percent. This would be welcome news to Americans who have been hard hit by the loss of about $7 trillion in the value of U.S. stocks since March 2000.
An added bonus to eliminating the double taxation is the change it will have on the debt-to-equity ratios of American businesses.
Treasury Secretary Snow estimates we could see changes in the debt- to-equity ratios in the range of 5 to 8 percent. This movement of corporations toward the use of more equity and less debt would leave them less vulnerable to economic downturns.
And before we hear the usual cries from the opponent's of the President's tax relief package--who say we are raiding the Social Security Trust Fund to pay for tax cuts for the rich--let me set the record straight.
As the law requires, we invest social security funds in government bonds which are the safest and most reliable investment out there.
These bonds are kept in a secure facility in Clarksburg, WV. And no one has shown up there to grab these bonds and hand them out to the rich. That is just a bogus claim.
The President's growth package is just that--an economic growth package. We recently passed an extension of unemployment benefits and President Bush signed that into law. While this may provide a quick-- yet short--stimulus to the economy, what we really need is a long-term jobs and economic growth plan.
We cannot spend our way into prosperity. We have seen governments try this and fail. It may make some of us feel good to write check after check from the government, that is simply the wrong approach.
Governments don't create jobs and wealth. Free individuals with an idea and a source of capital create jobs and wealth.
We can grow ourselves into prosperity. We have done it before. The fundamental question is: Who knows better what is good for Americans-- the Federal Government or the American people?
The strength of the American economy is not from the government and more Federal programs. It is the American people--the workers, entrepreneurs, investors, and risk takers--who keep the American dream alive.
It is better to allow Americans to keep more of their money to make spending, savings and investment decisions. We cannot decide here what job skills different people need, or what new equipment companies should purchase, or how to organize a small business' growth plan.
The Federal Government cannot make these investments for them. Big brother does not know best. We in Congress do not know what investments will best suit the particular interests of American families, entrepreneurs and business owners.
But what we can do is allow Americans to have access to more of the money they work for and earn. And then we have to trust them to make the necessary decisions within the economy to invest and create more jobs.
But to do this, we need to pass this budget resolution with its jobs and economic growth package in tact. And therefore, I urge my colleagues to support this resolution as it was passed by the Budget Committee.
Finally, I want to say a few words about the Medicare prescription drug benefit provision in the resolution.
We all agree that Medicare is an important program. It provides health coverage to 41 million Americans, including almost 630,000 Kentuckians.
When Medicare was created back in 1966, it ensured that seniors would be able to receive health care coverage. However, medicine has advanced so rapidly and prescription drugs play a major role in the health care of many. For years, Congress has debated various proposals for adding a drug benefit to Medicare. So far, we haven't gotten
the job done. I am hopeful this year will be different for several reasons.
First, our seniors need our help now more than ever. They shouldn't have to make tough decisions about which prescriptions they can afford to fill each month, or whether or not they should divide pills or skip meals.
This is one of the biggest issues we hear about from our constituents. There are a lot of Kentuckians who would benefit. Almost 144,000 seniors in Kentucky are below 200 percent of poverty, and almost 58,000 are below the poverty level.
Second, this budget resolution sets aside $400 billion over the next 10 years to create a medicare drug program. This is a great increase over what the President proposed before and shows his dedication to this issue.
In fact, the President proposed $153 billion for Medicare prescription drugs in his fiscal year 2002 budget.
For fiscal year 2003, this number increased to $190 billion.
And for fiscal year 2004, President Bush has more than doubled last year's amount to $400 billion.
For Congress's part, this $400 billion figure is also a substantial increase.
In the fiscal year 2001 budget resolution, we set aside $40 billion over five years for a Medicare prescription drug benefit.
In the fiscal year 2002 budget resolution, Congress allocated $300 billion over 10 years.
Of course, last year, we didn't pass a budget. And, this year, we have set aside $400 billion over 10 years.
Third, the finance committee will be allowed to consider and report a bill to the floor this year. And I am hopeful we can avoid many of the problems we encountered last year.
Last year we voted on four prescription drug proposals. But because the bill didn't come from the finance committee as it should have, all these proposals required 60 votes to pass. Needless to say, none came close.
Also, these four proposals ranged widely in price from as low as $295 billion to over $600 billion. The tri-partisan plan, which I and many of my colleagues voted for, was estimated to cost $370 billion over 10 years.
We have a real chance for a bipartisan effort this year. An overwhelming majority in this body have indicated their support for a Medicare prescription drug benefit.
I urge my colleagues to vote for this resolution. It will create jobs if we can pass it with the President's job and tax package in tact. And the Medicare prescription drug benefit package it includes is what seniors not only need, but what they deserve.