Economic Stimulus Package

Floor Speech

ECONOMIC STIMULUS PACKAGE -- (Senate - February 06, 2008)

Mr. DURBIN. Mr. President, I thank the majority leader, Senator Reid, who was here earlier today talking about the economic stimulus package. What I have tried to do is to understand at this moment where the Republicans are, and it is hard to follow because initially there was agreement between the Republican and Democratic leaders in the House--Speaker Pelosi, Congressman Boehner, and Secretary Paulson of the Bush administration. They came up with the notion that to get the economy moving forward, we should send a rebate check of about $600 for individuals and $1,200 for families and additional money for children across the country, which is certainly an excellent starting point because the administration was persuaded to include the lower income families across America, and there were limits on family income as to eligibility.

The Senate Finance Committee took up this proposal from the House and suggested a few changes. I think each one of them is a positive change. For instance, they said: Let's include 21 million seniors receiving Social Security checks. If the idea is to put the money in the hands of people who will spend it, certainly our seniors on fixed incomes, many who struggle with utility bills, keeping their homes warm, paying for gasoline, the cost of food and prescription drugs, they can use the money. An additional $500 or $600 will be spent by them. That was included in the Senate finance package. That was not in the original House version. I think that is a positive improvement.

Then they also said: If we are talking about groups of people who should be recognized, those disabled veterans from previous conflicts and certainly from Iraq and Afghanistan should be included as well. There is argument here. Those men and women certainly deserve special consideration for all they have given to America. So that was added to the House version of the bill on the part of the Senate Finance Committee.

Then they went to another category, and this is one the economists say is a very important category: people who are currently unemployed, those folks looking for jobs, many of whom are struggling to keep their families together while they find a job after they have been laid off from previous employment. If they receive additional money, economists say they are most likely to spend it in a hurry. So they encouraged us to include them in the relief we are providing with this tax rebate.

I have been listening carefully to see if our Republican colleagues believe these people deserve help as well. I am beginning to believe this is the real problem the Republicans have. They are concerned about giving additional money to people who are currently unemployed. Yesterday, one Senator from Texas on the Republican side said that just encourages them not to find work. I took a look at the amount of money that is paid to people on unemployment. It is hard to believe that is the kind of money that will lead to a life of leisure, where you decide: Heck, I don't need a job; I have unemployment benefits.

It turns out that unemployment benefits are not that generous--$500 a week would be a big number, and for many it is a lot less. If we suggest people will stop working with that kind of income, I think it overlooks the obvious. Many people in lower income categories struggle from paycheck to paycheck. Losing a job creates a family emergency. What we are talking about is whether we should provide additional help to those unemployed. This has been done before. It is not a new concept. In fact, historically, if you want to fire up the economy and put spending power in the hands of people across America, helping the unemployed is one of the first places you turn.

The way the Finance Committee does it is to extend unemployment benefits, currently at 13 weeks, another 13 weeks, which will be another 3 months or so, except for States with the highest unemployment, and then they would be extended another 26 weeks total. That is a way of providing special help in areas of high unemployment.

I took a look at the estimated number of people who will exhaust their jobless benefits State by State. In my State, it is 57,000 people. Let's take a look at a State such as Senator McConnell's State of Kentucky: 11,458 people will see their unemployment benefits end unless we enact this Senate Finance Committee version of the bill; Arizona, Senator Kyl's home State, 18,846. Let's go down to Texas where Senator Cornyn says he thinks this encourages people not to look for work: 49,000 people are about to lose their unemployment insurance benefits.

The point is, unemployment is at a relatively low level in this country, according to Senator Kyl. These are his words:

Unemployment is at a relatively low level in this country, and it would be a huge mistake to exacerbate the unemployment situation by extending unemployment benefits.

I am quoting from a statement that Senator Kyl made, not Senator Cornyn. I want to make that correction for the record. Senator Kyl was the one who questioned the wisdom of extending unemployment benefits.

So in Senator Kyl's home State, it appears that 18,846 people are about to see their unemployment benefits come to an end, and he, I assume from his argument, believes that is a good thing because now this will prod them into looking for work, and he is not supporting extension of these unemployment benefits for 18,846 people in his home State.

That has become one of the major elements of debate in terms of whether the Republicans will support the Senate Finance Committee version. Let me add, it was a bipartisan vote that brought the bill out of committee--Senator Grassley of Iowa, joining with, I believe, Senator Smith of Oregon and Senator Snowe of Maine, if I am not mistaken. All three voted for the Senate Finance Committee version of the bill that was brought to the floor.

Let's take a look at some other States where unemployment benefits might be important. In the State of Mississippi, 7,819 are about to lose their unemployment benefits unless the Senate finance version passes as an economic stimulus. As I mentioned, in my home State of Illinois, 57,000 are looking for assistance in that regard.

As I go through this list--North Carolina is another good example. North Carolina, 48,000 people in the State, obviously suffering from some high unemployment, are about to lose their unemployment benefits. The State of Ohio, 35,320 otherwise will lose their unemployment benefits.

Mr. President, I ask unanimous consent to have printed in the Record this table so all the States, based on the current U.S. Department of Labor data, will be reported officially in the Record.

BREAK IN TRANSCRIPT

Mr. DURBIN. Mr. President, as this economy continues to deteriorate and we see these wild gyrations in the stock market, there are a lot of people concerned. Yesterday, the stock market went down over 300 points. I know it has its good days and bad days, but it has had more bad days than good days for a long time.

A lot of people in days gone by paid little or no attention to the stock market. My mom and dad did not own a share of stock during their married life. They were too busy raising three kids. They could not afford anything like that. If they could put a few bucks in the savings account to save up for the next used car, that is all they looked forward to.

A lot of people view it differently because that stock market reflects the value of 401(k) plans, IRAs, retirement plans, and savings that people count on in years to come. When the stock market is heading south, people are looking at it in worried terms.

What we are trying to do is invigorate this economy and get it moving again. For the longest time, the Republicans have argued that the best way to invigorate the economy in good times and bad is to give tax cuts to the wealthiest people in America. They have this notion that if wealthy people have more money, they somehow will fire up the economy.

I come from a different economic school. It started with Principles of Economics that I took at Georgetown University not too far from here when Father Zyrinyi came into our class and explained the marginal propensity to save. If you are a wealthy person, you are more likely to save the next dollar handed to you than a poor person, who is more likely to spend it. So if you want to get the economy going and fired up, you would give as many dollars as you can to those in lower income categories.

Historically, the Republican approach has been just the opposite: Give the tax cuts, give more spending power to people who are wealthier--folks who have not asked for it and folks who, in many cases, do not need it. In my opinion, a tax code, if it is to be fair, is going to be progressive and say to those struggling at the lower ends--the working families and middle-income families--let's be generous to them because they are the ones living paycheck to paycheck.

Well, now the chickens have come home to roost with this economy. As the economy is heading downward, the Bush administration has discovered poor people. They have discovered working families. It is no longer just a matter of tax cuts for people making over $300,000 or $400,000 a year.

So if we are going to be sensible and really want to enliven this economy, the unemployment benefits are the obvious place to turn. Extending unemployment benefits is not only humane and moral for families out of work, but it works to try to breathe some life into this economy and start more consumer demand and, with that consumer demand, the expansion of business and the expansion of employment and profits and ultimately an improvement in the stock market. That is just fundamental Keynesian economics that we have studied over the years.

This resistance on the Republican side to helping unemployed people is troublesome. It is the same mindset that was in vogue on the Republican side for years when they opposed increasing the basic minimum wage in this country. That used to be bipartisan. It wasn't politically dogmatic to be against increasing the minimum wage. Even Republican Presidents did. But then came this new mindset which said that even if people are working for a small amount of money, they can just get another job if they need to get by. That is hardly consistent with family values, but it prevailed. Over a long period of time--10 years, in fact--there was no increase in the Federal minimum wage, until Democrats took control of Congress last year. We point to that with pride because it is something House and Senate Democrats promised would be high on the priority list, and we did it. Again, we were focusing on people left behind in an economy that is not as powerful and as healthy as we would like it to be. Now unemployment benefits fit the same category.

When I think of plants across Illinois that have closed, putting people out of work--not to mention smaller businesses--it is through no fault of their own that people who once worked at a good manufacturing plant in Illinois or any other State don't have a job today. They have lost their benefits, lost their health insurance in many instances, and don't know which way to turn. Some have limited education and need time to at least get back to school or back for some training so that they can make some money again. Why wouldn't we want to help these people?

Beyond the economics of it, doesn't it seem only fair, if we are going to try to help people and help the economy, that we would start with the unemployed? The list which I have submitted, which will be printed in the Congressional Record, is an indication of how many, nationwide, it would help. The number is roughly 1.3 million who would be helped by the extension of unemployment insurance benefits.

When Senator Kyl argues it would be a huge mistake to help the unemployed in America, he is arguing against the bipartisan approach to fighting recession which we have had for the longest period of time. I hope his opinion on this bill does not prevail. We need to do our best to try to help the families who are trying to get by.

In my home State of Illinois, since President Bush took office 7 years ago, relative to inflation, the median household income has decreased by 10 percent. So instead of an improvement in income, families in my State have seen their income go down during President Bush's administration.

The number of residents of my State living in poverty since President Bush came to office has grown by 10 percent in that same period of time. And that was a period of time when the Republicans and the President were resisting the idea of increasing the minimum wage, incidentally.

Health care premiums in Illinois have risen 29 percent since President Bush took office, and 152,000 more people in my State don't have health insurance since President Bush came into office.

Those families lucky enough to get their kids in college are facing sticker shock. The cost of college in Illinois has risen 51 percent since President Bush was sworn in.

A gallon of gas, of course, is up 77 percent in cost, which is an added expense, particularly to low-income families.

To make ends meet, families across America, and certainly in Illinois, have no place to turn but debt. Debt for these families has increased at a rate four times faster than it did in the 1990s. And it is not just families sinking in debt. The President's new budget makes it clear that America is sinking in debt. Senator Conrad, chairman of the Budget Committee, made a presentation to us yesterday indicating that President Bush inherited a surplus when he came into office and a national debt in the area of $5.7 trillion, and now it could virtually double by the time he leaves office. So this is the reality that faces us.

Mr. President, how much time remains in morning business?

The ACTING PRESIDENT pro tempore. On the majority side, 10 minutes.

Mr. DURBIN. Ten minutes. I see no other Members seeking recognition, so I will stay on this point in recognition of the economic situation we are facing.

The national debt of America has doubled in the last 7 years under President Bush. We have accumulated more debt under President Bush than under all of the previous Presidents of the United States combined. Now, that is the kind of statement that could easily be challenged but I don't think will be because we have the facts to back us up. We have incurred this debt because we have had a war the President has not paid for, nor asked Congress to pay for, and we have had a tax cut policy which is unique in the history of our country. No President of our country has ever asked for a tax cut in the midst of a war.

Here is a figure that ought to concern us as well. Since March 2001, foreign investors have financed nearly 80 percent of our Federal budget deficit. So in order to get by, if you are spending more than you are raising in taxes, we have to borrow it, and we borrow it from foreign governments, which increasingly become our bankers and mortgagers. It is not a healthy relationship when countries such as China, Japan, Korea, and the OPEC nations become the largest creditors of the United States. They have a lot more clout than we might like to see.

It was just a few months ago that there was speculation by one economist in China that they may decide to move away from a dollar-denominated international transaction to use the Euro, which is a stronger currency than the American dollar. Just that rumor, from a low-level economist in China, sent chills through the stock market, and we saw stock prices go down. It is an indication of how dependent we are becoming as a nation as we go further in debt to fund a war which now costs $4 billion a week and also to fund tax cuts in the midst of that war primarily for the wealthiest people.

The President has said many times that he believes in the so-called ownership society. But the ownership society hasn't given most American families greater control over their financial destiny. The owners of the ownership society, by and large, have zip codes overseas. They are foreign investors who own the debt of America.

There are a lot of suggestions of how to get out of this. Some have suggested corporate tax cuts and others, but I think direct help to working families is the most effective way to do it. The rebates we would send to those families is money that could be well spent. I think this extension of unemployment insurance has been proven to be very effective. Mark Zandi, who is with Moody's Economy.com, estimates this would be the second most effective stimulus measure of all the ideas under consideration, generating $1.64 in increased economic activity for every dollar of rebate. This money can be distributed very quickly, since the weekly benefits are capped at $350 for a single individual in Illinois, and it wouldn't cost that much to extend it.

The Senate finance package is a great bill. We could have done better. I wish we could have included, for example, an improvement in food stamps. Over the holidays, last Christmas season, I went to food banks around Illinois. These are some great people. They do not work to make a lot of money, but they work to do a lot of good in their communities. They gather surplus food and distribute it to families who need it, and they are finding that more and more working families are showing up at food banks, and more and more families, even if they are working, can qualify for food stamps. So food stamps, which, unfortunately, don't provide enough money to really cover the cost of meals, could be improved, and that would help our economy. It is not included in the Senate finance package, but it should be.

Finally, I think we need to understand that one of the other ways we can help bring this economy forward is to invest in the infrastructure of America. I just flew in this morning from Chicago--one of our great American cities. But even that city, with its mass-transit system, needs a massive capital investment, not only to repair what is there but to extend it for service to other areas. It would be good for our economy, certainly good for the environment, and it will create good jobs. These are jobs that can't be outsourced. When we are doing infrastructure projects in Maryland or in Tennessee, we are doing projects that have real value, not only for the communities but for the men and women who are at work and whose paychecks are invested back into the communities.

So I am hopeful that at some point beyond this current discussion about an emergency stimulus package, we can extend our stimulus approach to even more investment--investment in highways and mass transit; in bridges, in making certain they are safe and we don't witness the kind of tragedy we had not that long ago in Minneapolis; investments in water resource development--for instance, the locks and dams on the Mississippi and Illinois Rivers, desperately in need of rebuilding. All those are good opportunities to put people to work, to reduce the unemployment rate, and to put money back into the economy. There is hardly a State in our Nation that can't come up with critical infrastructure projects we could invest in to make America stronger. It is one of the few things Government does which we can show has a direct relationship to economic growth.

Certainly we understand that this current economic crisis we face had its genesis in the subprime mortgage market, and we shouldn't overlook the fact that 2.2 million Americans stand to lose their homes to foreclosure. I think the administration's proposal so far has been anemic. This notion that we would ask mortgage companies and financial institutions to voluntarily restructure mortgages will take us, perhaps, a short walk down the road but not where we should be. We need to find better ways to give these families, if they can, the ability to stay in their homes and make their mortgage payments.

I have a bill that changes the Bankruptcy Code, that allows a bankruptcy court to take an honest look at a person's income potential and restructure a mortgage so that they can stay in their home and won't face foreclosure. Foreclosure is a disaster not only for the family losing the home but for those who loaned the money for that home and, ultimately, for the neighborhood surrounding it.

So Mr. President, there is certainly much we can do. I am sorry we didn't get a lot more done yesterday. We tried, but the Republicans resisted again. They wanted another day off, and we had it. Instead of getting serious about amendments to the Foreign Intelligence Surveillance Act, instead of having the debate leading up to amendments and the vote on the economic stimulus package, the clock ran out.

Well, it is about time for the Senate to roll up its sleeves and get to work so America can get to work. I hope that today the votes that are scheduled will be the beginning of an honest debate and that at the end of the day we will pass an economic stimulus package, conference with the House, and send it to the President for his signature before we break for our Presidents Day recess period which begins next week.

Mr. President, I yield the floor.

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