Senate Coverage -- (March '05)

Thanks for posting those remarks---I knew he was griping about the tax cuts--

I turned on C-span 2 a while ago and it said that there would be 5 hours of debate today regarding the Budget---

I switched to Fox News for a few minutes to check the Atlanta judge murder, but switched back to c-span 2, and they are showing a repeat of a hearing from yesterday--

What gives? What happened to todays debate on Budget?

Did they leave early, or what?

I'm not sure what's going on in the Senate, I've been on this Atlanta shooting.

They probably left early cause it's Fri.

Whoopsey......

Next meeting: Monday, Mar 14, 2005

10:00 a.m.: Convene and begin consideration of S. Con. Res. 18, the Fiscal Year 2006 Budget Resolution.

Oh boy, 42 HOURS of debate of this......

Well this should be fun to watch

Senators trying to pack on all their pork projects and then blame the President for the deficit being so high

From what I have seen from the dems so far, their whole argument against the budget is that it doesn't REDUCE the deficit enough---

Well, if that is the case, then I would hope that the GOP guys use their own arguements against them when they start crying about not enough money for education, health care, veterans, farm subsidys, Medicare, Medicaid, free food programs, college education for illegal immigrants, free housing for illegal immigrants, free health care for illegal immigrants....

Oh, sorry, I got carried away....

Oh oh Da' Swimmer's up...

I just had to laugh or go ballistic a few minutes ago---

Frist gets up and talks about the budget resolution and how good it is that they have included $50 billion for next years expected costs in Iraq, and how proud he is of both sides, blah, blah, blah, same pap that Frist is good at, BUT he was being fiscally honest---

Sen. Conrad gets up and essentially calls him a liar by moaning about how the Rep. make a habit of "using rhetoric" to try to pull the wool over American's eyes---

THEN, he proceeded to use charts and such for 20 minutes denouncing the GOP for lying about reducing the "deficit" in half, ---the problem was, he was using charts that showed the amount of the "debt", then proceeded to use the two words, "debt" and "deficit" as synonyms during his condescending hateful speech---

I know that he thinks we are all too dumb to know the difference between the US Debt--and the US deficit, but not all of us are, and I wish just ONE Republican would stand up and get angry and straighten out the "shell game" that the dems are using by mixing up the figures together to fool the American people---

Darn I missed it.

If Bennett gets up, he'll smack them back down.

Bennett up---hope he is loaded for bear!!!

Bingamen's (sp) amendment (education) just failed 49-44---

Bennett has 30 minutes!!!

Then Conrad until 8:47 Et, then Sen. Stevens--

Sen. Steven on c-span 2, right now, talking about the energy policy and drilling in ANWR.

He said he is giving this speech NOW, because on the West Coast and in Alaska, which would be most affected, it is just now late enough for them to watch this---he said they hardly ever get to see important speeches in Senate because of the time difference---

Monday, Mar 14, 2005

The Senate convened at 10:00 a.m. and adjourned at 9:00 p.m. One record vote was taken.

Next meeting: Tuesday, Mar 15, 2005

9:30 a.m.: Convene and resume consideration of S. Con. Res. 18, the Fiscal Year 2006 Budget Resolution.

The Senator from Utah is recognized.

Mr. BENNETT. Mr. President, the Budget Act indicates that during every budget debate there should be a period of time discussing the general economy. As the past chair and current vice chair of the Joint Economic Committee, I feel I am in a position to do that. I want to share with my colleagues a statement of where the economy is now, and then make a few comments about where it may be going and talk about the future.

Naturally, you can't have a conversation about the economy without charts. That seems to be one of the essentials for any economic discussion. So I brought a fair number of charts to outline the economy to the Members of the Senate.

This first chart is an historic chart that goes back to the years of the early 1970s. All of the bars above the lines are quarters of economic growth. They are measured in GDP growth, the percentage of growth in the gross domestic product. The bars below the lines are quarters of gross domestic production shrinkage where the economy contracted.

If we go back to this period in the early 1980s, we see what the economists call the double dip, the dreaded period where the economy goes into recession, comes out of it, and then slips back into recession. Those who are old enough to remember the early 1980s remember how difficult a time that really was. I have a very clear memory of one of my associates in that period of time who said to me: Bob, be very, very grateful you have a job. Unemployment was high, business activity was off, the economy was recovering, or attempting to recover from the great inflation.

We talk about the 1930s as the days of the Great Depression. The late 1970s were the days of the great inflation. All kinds of things were happening. I remember running a business in this period and going to the bank to borrow money and feeling very fortunate I was able to borrow money at a 21-percent interest rate to support my business. The folks on the late-night comic shows were talking about the height of the interest rates. I remember one who said Jimmy Carter is the only President in history whose approval rating is below the prime rate.

We came out of that period with the help of a combination of activity by the Federal Reserve with Paul Volcker, actions by the Congress, and tax cuts under President Ronald Reagan. We survived through this, and we had a period of tremendous economic growth, the strong recovery out of the recession, and then, after that recovery had taken hold and gained traction, a period of good economic growth. Then we went into the recession that occurred during the Presidency of the first President Bush--much milder than the dreaded double dip of the 1980s but, nonetheless, a period of contraction. The recovery was not as strong as this one following the double dip because it did not have that much to rebound from. But we had that recovery and then a period of strong economic growth until we come to the recession from which we have just emerged.

Interestingly, this, by technical definition, was not a recession because the technical definition of a recession is at least two successive quarters of shrinkage in the gross domestic production. We never had two successive quarters. What we had were three quarters, not in succession; by historic standards, we had a very mild contraction in the size of the economy.

This was, perhaps, the shortest and shallowest recession that we have had in our history. We did not have that strong a recovery.

When I asked Alan Greenspan why the recovery was not taking hold, he said because the recession was so short and shallow. If you want a really strong recovery like the one we had after the double dip, you have to be coming out of a recession as bad as the one at that time. So we can be grateful.

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The recent recovery finally got traction in the second half of 2003, and we see now we are in a period of very strong economic growth, which by historic standards is as good as the economic growth we had in the other two areas. The light blue at the end is what the economists are forecasting for the balance of 2005. But interestingly enough, already the newspapers are saying those forecasts may be too conservative. As they go back and look at the business activity in the first quarter of 2005, they are saying 2005 may very well be a better year than is being forecast. Those are the figures and the statistics for the economy as a whole.

Now we will look at the question of jobs. We heard a lot of rhetoric prior to the election about how bad the job situation was. The background shaded areas in the figure are the areas of recession. You see the unemployment numbers superimposed upon the historic periods of recession. From the period of the double dip, we saw unemployment get into double digits--10.8 percent was the peak. Then it came back down and in this area which is about 7 percent you would feel, OK, the employment picture has gotten good again. We are down from 10.8 down into the 7-percent range. Then, as the economy became even stronger, the unemployment rate fell down. When the recession hit in the early 1990s, unemployment came back up to 7.8 percent, a very large increase from where it had been, but in historic terms not that bad. When the recovery took hold, this time unemployment came all the way down to about 4 percent. Then the recession hit and unemployment spiked at 6.3 percent.

I remember when I took economics in college they told me 6-percent unemployment was full employment--that the economy could not employ more people than that without heating up with inflation. We found out that was not true here. True to the pattern, the peak was reached at 6.3. It is now falling back. Unemployment is at 5.4 percent, well below the averages of the 1970s, 1980s, and 1990s. The economy in these categories is behaving as it has throughout our past history.

Another look at jobs. Here are the jobs per month created since the recovery took hold. We can see it was in the second half of 2003 that the recovery took hold. We started creating new jobs in May of 2003, and while it was anemic for a while, then it really took off in the first part of 2004 and on through. We have had 21 months of increased employment every single month, and we have created over 3 million jobs in that period of time. The economy continues to show signs of creating jobs because jobless claims, which are the forecast of new jobs, have been falling.

Once again, this is the period of the recent recession and jobless claims were going up and peaked in that period. They flattened out. When the recovery took hold in the middle of 2003, they started down in 2003 and they continue to trend downward, indicating that the increase in jobs is something we can look forward to for a fairly good period of time ahead.

Business activity, dividing between service and manufacturing activity: We can see that for the manufacturing sector the recession was very difficult. The blue line shows expansion or contraction. Manufacturing started down in early 2000, went below the line and stayed there until 2002, briefly came back up, and then dipped below again in the first part of 2003. Once again, that is when the recovery took hold and manufacturing has been in positive territory ever since. Services have done better than manufacturing all the way and both of them remain in the position of expansion.

During that period, however, inflation has remained well under control. Here are the inflation numbers. The Consumer Price Index, in the dark blue, has come down and remained fairly low, but the personal consumption expenditures price index, which is the inflation measure that the Federal Reserve uses to determine what is going on with inflation, is even lower and is staying more stable.

So the recovery has taken hold in all sectors, manufacturing as well as services. Jobs are coming back, and the forecasters say we will have economic growth at or above the level we enjoyed during the 1990s, at least through 2005.

What about the deficits? We keep hearing a lot of conversation about deficits around here and people saying: Well, maybe the economy is doing that well, but it is all because of runaway deficits.

Here again is the historic pattern of deficits. You can see the deficits spiked as a percentage of GDP during the 1980 double dip. It got to 6 percent GDP. In the recession of the early 1990s, it did not get that high. It was a little bit under 5 percent. This last one has been under 4 percent. The deficit peaked at a lower level than the peaks of the two preceding recessions. The dotted line that is shown here is CBO's projection of where the deficit is going as a percentage of GDP.

Now, you can say: How can it be falling as a percentage of GDP when it is going up in total dollars? Well, if it is rising less rapidly than GDP is growing, it is falling as a percentage of GDP.

Let's look at the numbers behind the deficit to see what is happening with respect to revenues. Here are the tax revenues as a percentage of GDP, again in historic context. They peaked in 1969-1970. And then when the recession hit, they fell. Here is the double dip, 1980-1982. Just before that recession, they peaked. The recession hit, and revenues fell dramatically.

The last one, 1990-1991, they did not come back up that much. But they fell as soon as the recession came along.

Then we had the revenues to a historic high as a percentage of GDP, up over 21 percent, coming at the time of the dot-com bubble.

One of the things that was responsible for this tremendous rise was the capital gains revenues. We in the Congress cut the capital gains tax rate from 28 percent to 20 percent and produced 5 times--5 times--the capital gains realizations that CBO had projected. There were so many people with so much inflated value in their stock who took advantage of that capital gains tax cut, who cashed it all in and paid that capital gains tax, and that pushed the revenue to unprecedented highs as a percentage of GDP.

The combination of the collapse of the dot-com bubble, and the collapse of the stock market that came along as a result, and the recession drove receipts down. And, yes, the tax cuts played a role there. There are those who were saying the tax cuts were solely responsible for this. The data do not support that. But they came back down.

What is happening is they are coming back up, as they always have. After every recession, revenues have come back as a percentage of GDP. And here are the specifics of how they have come up in fiscal 2005, in the years we have been operating in this fiscal year. The corporate income tax is up 50 percent from where it was a year ago. Payroll taxes are up 6 percent of where they were a year ago. Personal income taxes are up 10 percent of where they were a year ago. That is a clear indication, once again, that the recovery has taken hold and it is producing the standard historic response to a recovery after a recession. Revenues increase as the recovery takes hold.

The overall number is 9 percent. All total revenues are 9 percent higher than they were in the previous year's corresponding months. Total spending in that period is up 7 percent. That includes the war. That includes the supplementals. That includes all of the things we have done here. Total spending is up 7 percent higher than it was the previous year. But total revenue is up 9 percent higher than it was the previous year. So the recovery is taking hold and the deficit as a percentage of GDP is, in fact, staying within historic norms.

Now, I do not want to leave the impression from all of this that the future, therefore, is completely rosy and we do not need to worry about the deficit or that we do not need to worry about the future of the economy because lying there in our future is a major challenge. This has been talked about many times on the floor by Senators from both sides of the aisle. But I want to dramatize it with this set of charts.

I go back to fiscal 1966. Why did I pick fiscal 1966? That was the first year we began to see spending for Medicare.

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Medicare was passed prior to that time, but they had to gear up for it. They had to do the kinds of preparations they are doing now with respect to the drug benefit, so that the first time you began to see spending for Medicare was 1966.

All right. These colors on the chart demonstrate how the budget was divided. The big portion of the budget, the dark blue, is defense spending. Defense spending in 1966 was 44 percent of the Federal budget.

The light blue is non-defense discretionary spending. That was everything else. That was highways. That was education. That was courthouses. That was the Customs Office. That was everything we did in Government, which was 23 percent. Interest costs on the national debt were 7 percent. And the red, the mandatory spending, was 26 percent, the mandatory spending primarily being Social Security.

All right. That is what it was when the Medicare spending started.

Now, look what has happened today. This is 2004. The mandatory spending has grown to 54 percent. It is like a Pac-Man beginning to close in on everything else. The defense discretionary, even while we are at war, has shrunk to 20 percent of the budget. The nondefense discretionary is at 19 percent. It shrunk a little from where it was before, but close to the same. The interest costs are steady at 7 percent of the budget. But we have seen mandatory spending go from about 25 percent in 1966 to 54 percent in 2004.

Now let's go out in a projection. This is not a projection into the far distant future. This is only 10 years. We can be a little more confident of a 10-year projection than we can a 20-or 30-year projection. See how the Pac-Man portion of this circle is growing. Mandatory spending is now up to 62 percent. Defense discretionary has shrunk to 14 percent. Nondefense discretionary has shrunk to 15 percent, and interest costs have grown to 8 percent.

If you project this out, as this begins to take over all of the chart, the one thing that will challenge it is not defense spending and not discretionary spending, it is interest costs.

As this begins to grow to the point where we cannot cover it, then we borrow more and more, and you will see the yellow begin to push the red back. You would see the yellow begin to take over where the red took over first.

I make this point because, as we are dealing with this budget, we should remember the impact of mandatory spending. I use this figure to illustrate this point to my constituents who say to us: The deficit must be brought under control. You in Congress must stop spending. You have to show some spending discipline, or the deficit will overwhelm us.

Let me give you two numbers. The President's budget proposal is for $2.7 trillion. The amount of discretionary spending that we are debating in this budget is $843 billion, and that $843 billion includes defense. That is why it says defense discretionary. If you take defense off the table on the grounds that we are at war and say, all right, you are going to have to balance the budget and bring the deficit under control by controlling spending, the only portion of spending over which we have any authority becomes 19 percent of the total budget. The other 81 percent will go on regardless of what we do.

That is why we have to have the courage, looking ahead at this that is coming, to say somehow we have to roll back the mandatory spending. You cannot balance a budget of $2.7 trillion by shaving down a percentage of discretionary spending. If we were to have an across-the-board cut of 10 percent of all discretionary spending, we would have a cry of outrage on this floor that would be heard all over the country. A 10-percent across-the-board cut? A 10-percent across-the-board cut for IDEA? A 10-percent across-the-board cut for food stamps? A 10-percent across-the-board cut for everything we do in Government? Absolutely not. But if we were to enact that 10-percent across-the-board cut, ignoring the mandatory spending, that would yield only about $80 billion out of a budget of $2.7 trillion. To use a phrase that all of the politicians in the room can understand, that is within the margin of error. And $80 billion out of a budget of $2.7 trillion makes little or no impact.

That is why in this budget debate we should keep in mind two things: First, as I hope I have illustrated, right now the economy is strong. It is robust. The recovery has taken hold. Jobs are being created. The deficit is coming down as a percentage of GDP. Things are moving in the right direction virtually across the board.

However, if we do not now exhibit the courage to start taking steps to hold down mandatory spending, all of the present work that we have done to make the economy solid, sound, and strong will be for naught. It will be overwhelmed by a sea of red ink, coming not from the fact that Congress is being profligate in the appropriations that we make and spending decisions we make, but coming from the fact that we did not have the courage to deal with the mandatory programs.

Now I have talked about Medicare, and that is the one that seems to have the greatest pressure. But we are also talking about Social Security, a mandatory program. We are talking about Medicaid, a mandatory program. We are talking about farm subsidies, a mandatory program. We are talking about the kinds of things that politicians have a very tough time addressing. This budget begins to address the mandatory programs very slightly, very gently, and in very small amounts. But they have already set off alarms of complaint around the Capitol that ``you are trying to balance the budget on the backs of the poor.'' That is a great slogan, and nobody wants to balance the budget on the backs of the poor, but we have to recognize that if the economy goes into the tank because of runaway spending, driven by mandatory, it will be the poor who will pay the heaviest price.

I remember during the 1990s, when we were enjoying as much expansion as we were in the gross domestic product, one of my colleagues asked Alan Greenspan, Chairman of the Federal Reserve: who benefited most

from this boom? He was expecting Greenspan to say it was the rich because look how rich they have become. He was a little surprised when Chairman Greenspan said--and I agree with what he said: Without question, this good economy has primarily benefited the poor.

My colleague said: How can you say that because the poor have not gotten as big an amount of money as have the rich?

The chairman said: The poor have seen their life circumstances change far more dramatically than the rich have. They can get jobs where they could not before. They are beginning to buy homes in ways they could not before. They are beginning to save money in ways they could not before. There is no question but what, in terms of the impact on people's lives, this strong economy has benefited the poor more than anybody else.

That is why we should look at these numbers that I have shared with the Senate today and realize that our primary stewardship must be to keep the economy as strong as we possibly can, that there is nothing we can do that would benefit the poor more than to see to it that this recovery remains robust and that the future moves away from this chart back to the kinds of proportions that we have today on this chart, where mandatory spending is roughly half instead of two-thirds of the total obligations of the Federal Government.

I salute the chairman of the Budget Committee for his resolution and determination to see that we do that, and I hope the Members of the Senate will support the budget as it has been reported from the Budget Committee.

Mr. President, I yield the floor and suggest the absence of a quorum.

Ahhhhhhhhhhhhhhhhhhh!!!!

D@mn, I wish C-span would give some warning before playing music!

NTS:

Allard & Connrad -- Congress participates in SS.

Looks like Conrad and Gregg are about to get into it w/ each other....

FOX NEWS ALERT

Bernie Ebbers from Worldcom found guilty of ALL counts

Gregg was very animated when he was talking---

I gotta say that Condrad, Stabenow and Nelson have been spewing such BS regarding Social Security and Bush's "plan" that it just makes me sssooooo mad!

They are completely lying and misrepresenting everything from the past, the present and what will happen in the future---

But I thought the Bush Administration took care of their good buddies in big business?

How could this happen---/s