Statements and Speeches

On the Congressional Budget for the U.S. Goverment For Fiscal Year 2004

Statement in the Congressional Record

Mar 20 2003

Mr. President, a couple of weeks ago Senator Blanche Lincoln of Arkansas invited several of us Democratic Senators to a briefing in her office on Capitol Hill. She also invited several Members of the House of Representatives who are Democrats. There were several of them in the room. They call themselves Blue Dog Democrats.

The Blue Dog Democrats, for those who have not heard that term before, tend to be budget hawks. They believe balanced budgets do matter, and the idea of running chronic budget deficits year after year is not good for this country. In fact, it is very troublesome for this country. Blue Dogs are willing to take tough votes on defense spending, nondefense spending, entitlement spending, and taxes as well to get us closer to a balanced budget.

I served for 10 years in the House of Representatives and as Governor of Delaware. I guess I was a Blue Dog before we had Blue Dogs. I believe I am today. Tomorrow a number of us, including a Republican, Senator Lincoln Chafee, Senator Mary Landrieu, Senator Dianne Feinstein, and I will offer a budget alternative that is modeled after the approach offered by the Blue Dog Democrats in the House of Representatives which was voted on earlier this evening and I understand received about 170, 175 votes. It fell short, but it was a respectable showing. I want to talk about the provisions of that approach and why I think it makes sense.

A number of my colleagues talked tonight about the need to stimulate the economy and the need to do so in part with tax policy. In the alternative we will propose tomorrow, we do just that. Those who want to effect the 10-percent rate cut to accelerate it, we do that, in fact, this year. Those who want to accelerate the 27-percent tax bracket cut, we accelerate that this year. Those who want to expand and increase the child credit, we do that this year. To those people who would like to allow small businesses to expense not just $25,000 in investments they make but $75,000, we let them do that this year to encourage that kind of investment. To those who want to eliminate the marriage tax penalty—we did that in Delaware when I was Governor—we would do that immediately under the proposal that will be before us. We raise the exclusion for the estate tax to $6 million for a couple, and we do that this year, effective immediately, and leave it at that rate. Those are some of the provisions we do right now. It would have an immediate impact, and I think a very positive impact on the economy at this time.

For those people who happen to be in the 10-percent bracket, they would realize some tax savings, but so would those people whose income is not just $15,000 or $20,000 but $150,000. They would realize a savings, too, by accelerating the tax cut for those in the 27-percent bracket. We are not just helping people in the middle-income portion of the spectrum, but it also helps people at the top of the income spectrum. What we do not do in our approach is reduce further the 35-percent rates and the rate to the 38.6 rate, the top two rates. We defer those cuts until two things happen: One, we pay for the war in Iraq; and, two, until we have actually balanced the budget. That is what we do on the taxing side. That is what was offered in the House of Representatives this evening as well.

On the spending side, what we have done is to essentially embrace the discretionary spending numbers proposed by the President. In the House of Representatives, the Blue Dogs took the President’s defense discretionary numbers and put that in their proposal. In the Senate, we elected in our version of our budget alternative to take the defense numbers proposed by the Budget Committee. They are a bit less than the President’s proposal, I think, by about $85 billion over a 10-year period of time. But we embrace the numbers from the committee itself. We then take that roughly $85 billion and use those moneys to add to the domestic discretionary spending side to help pay for No Child Left Behind, to help meet some of the health care needs in this country, and to help meet some of the agricultural needs in this country. It is roughly $80 billion to $85 billion. It would shift from the defense side to the nondefense discretionary side. Even at the end of that, we would still be spending above the baseline of more than the rate of inflation over the next 10 years for defense and a little less than the baseline in our domestic discretionary spending. But I like the balance a little bit better than what was debated and voted on in the House earlier tonight.

The third piece we address is budget controls. I will focus on one, but there are actually several others that are included in the measure we will offer tomorrow. Pay-go: The concept is if a Senator or a House Member wants to cut taxes, or a Senator or House Member wants to raise spending in a way that makes the deficit larger, they have to figure out a way to pay for that so it is budget neutral starting now, not starting next week or not starting next month but starting now. In our alternative, in our substitute, pay-go provisions become effective now. They are reinstated now. If anyone wants to increase spending, they are free to have at it. If they do, they have to offset it by cutting spending somewhere else, or if they cut taxes in one area, they have to raise taxes in another area or do something on the spending side to offset that. We have budget controls that address issues of emergency spending and other provisions as well. I will not go into all those tonight because it is late. That is an important component of what we are trying to do.

Let me sum up. We reduce taxes, we do a number of things that have an effect immediately this year, but we pay for them. The overall effect of the tax reduction over 10 years is roughly $100 billion, $115 billion. Most of that is loaded in the first year or two. We provide real spending restraint both on the defense side and on the nondefense discretionary side, and we put in place budget controls, some of which have been allowed to lapse. We put them back into effect to strengthen in the way they ought to be effective. Today it is March 20. The day is almost over. During the course of this day, we will pay as a nation in interest on the national debt roughly $1 billion. That is not principal; that is interest on our debt, $1 billion. We will pay that tomorrow, the next day, and the next day after that. We are a nation marching off to war. Tonight we have tens of thousands of young men and women on the march in a war I hope is mercifully brief for both sides.

There is a great irony here as we are sending tens of thousands of our young people marching off to war. We are actually talking about reducing the revenues available to finance that war, to mobilize the troops, the cost of the war, the postwar occupation, and instead of raising the revenue and the means of financing the war, we are taking away those resources, which sits logic on its head, at least for me. As we send those tens of thousands of young men and women marching off to war, their parents and grandparents are on a different kind of march, but a march nonetheless, with a different destination. It is called retirement, and the baby boomers, which I am one, are on the march and starting at roughly the end of this decade and throughout the course of the next decade. The impact that is going to have on Social Security, Medicare, and other spending is the boomers, as they march off into their golden years, will create a financial burden that we are not even a little bit prepared to address.

My fear is if we take the course that has been proposed by the administration and is incorporated in this budget resolution, we will have not really been consistent with what the President said in his State of the Union Message. I think one of the finest statements he said in his State of the Union Message is when he said the American people, our Government, should not pass on the problems of today to the next President, to the next Congress, or to the next generation. I am afraid this is exactly what we are prepared to do with respect to the way we spend our money and the way we meet our financial obligations. We do not have to do that. We can do the right thing. I have been looking for months for an approach that I could believe in and say let’s do this because it is the right thing to do. This is the right thing to do. I thank those who join me in offering this substitute tomorrow. I especially thank the Concord Coalition for embracing it today and the Blue Dog Democrats for giving us the inspiration in the first place.

I yield back my time.