Fiscal Year 2004 Budget

Mr. REED. Mr. President, in 2001, at the President's urging, Congress passed the Economic Growth and Tax Relief Reconciliation Act, which provided $1.35 trillion in tax cuts over 10 years. While I have consistently voted to reduce the tax burden of working families, I voted against the President's tax cut because it left too few resources for debt reduction and came at the expense of reforming Medicare and Social Security, providing a prescription drug benefit, and supporting critical investments like education, the environment, and national defense. A year later, the economic evidence indicates that the President's 2001 tax breaks have had little positive effect on the economy.

The economy continues to be in a slump and, now, we are in the midst of considering another large round of tax cuts that would help wealthy Americans. These tax cuts would also come at a time of record budget deficits and would break from the longstanding congressional practice of not passing tax cuts in times of war.

The Republican budget resolution calls for $1.3 trillion in additional tax cuts over the next 11 years. In an unprecedented move, the House and Senate Republicans are including two reconciliation tax numbers—rather than one so they can use the reconciliation procedure to pass a bigger $550 billion tax cut. These tax cuts will add to long-term deficits and further impede economic growth.

Last week, the newly released labor market data confirmed again that there is a crisis facing America's working families. Mr. President, 108,000 more jobs were lost in March, including 68,000 in the private sector. There are 2.6 million fewer private payroll jobs than there were when the recession began.

Nationally, the number of long-term unemployed rose to 1.8 million in March, far higher than the 660,000 long-term unemployed in January 2001. There were 445,000 new unemployment insurance claims filed last week, up from 407,000 the prior week.

The economy is in as much trouble as it was in the early 1990s, if not worse. The latest study by the Joint Economic Committee shows that during the last 4 months that private sector job loss in the current recession is now larger and more serious than the private sector job loss in the 1990 recession.

With so many Americans out of work for far too long, the persistence of job losses and the clear signs of no economic recovery anytime soon, the need to pass another extension of unemployment insurance benefits is overwhelming. These benefits are set to expire on May 31, and the last time the extension was passed, it did not even include assistance to approximately one million workers who had exhausted all of their unemployment benefits and still found no work. Yet the budget conference report fails to provide for further extensions to help victims of this recession who are struggling to take care of their families and struggling to find work.

Furthermore, just yesterday the IMF, in its annual report, projected that the world economy would grow 3.2 percent this year, down from its previous projections. It expects the U.S. economy to grow 2.2 percent this year and 3.6 percent next year. Commenting on the current administration's economic plans, IMF research director Kenneth Rogoff said, "Suppose for a moment we were talking about a developing country that had a gaping trade deficit year after year as far as the eye can see, a budget ink spinning from black into red, open-ended security costs and an exchange rate that has been inflated by capital inflows. With all that I think it's fair to say we'd be pretty concerned. The U.S. isn't a developing country, but nonetheless, for the global economy, the tax cut .    .    . on top of ongoing security expenditures seems awkwardly timed." This comes from the IMF that was supportive of President Bush's first round of tax cuts.

With all this negative data and with no upturn in the economy in sight, this budget resolution also makes too many cuts to vital programs and services to pay for the administration's oversized tax cuts. The conference agreement endorses a majority of the tax cuts that were in the President's proposal at the expense of domestic investments that are integral to the recovery of the economy and the welfare of our citizens.

As columnist Bob Herbert observed in the New York Times last week, "With the eyes of most Americans focused on the war, the Bush administration and its allies in Congress are getting close to agreeing on a set of budget policies that will take an awful toll on the poor, the young, the elderly, the disabled and others in need of assistance and support from their government .    .    . It mugs the poor and the helpless while giving unstintingly to the rich." The Senate budget includes a reduction of approximately $168 billion in funding for domestic discretionary programs in fiscal year 2004. Approximately two-fifths of this funding consists of grants in aid to State and local governments. These cuts will worsen the already severe budget crises that States are facing.

This is a restrictive funding level for domestic discretionary spending, given the continued needs in the homeland security area, the underfunding of the education reforms in the No Child Left Behind Act, need for aid to the States, and the severe structural burdens facing Medicare and Social Security.

The administration and the majority need to stop pushing economic plans that reward the wealthiest Americans and abandon fiscal responsibility. Instead, they need to support real economic stimulus that would provide immediate one-time tax relief for working families, extend unemployment benefits and provide desperately needed fiscal relief to the States.

Lastly, this conference report includes a gross misuse of the reconciliation process which was intended to facilitate deficit reduction not deficit increases. Due to the majority's obsession with supersized tax cuts, they have devised a heretofore, unheralded mechanism, to subvert the Senate's right to amend legislation. Indeed, while many of my colleagues can say that while the Senate can enact only $350 tax cut, the sad truth is that this contrivance paves the way for a tax cut that is much larger than many of my colleagues on both sides of the aisle are willing to support.

The budget before us is lamentable, and I only hope that those who support it today will reassess their positions in the weeks ahead.