Congressional Budget For The United States Government For Fiscal Year 2008

Floor Speech

CONGRESSIONAL BUDGET FOR THE UNITED STATES GOVERNMENT FOR FISCAL YEAR 2008 -- (Senate - March 21, 2007)

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Mr. SCHUMER. Mr. President, I rise to speak as chairman of the Joint Economic Committee in terms of our Humphrey-Hawkins budget debate time.

Today, we are going to begin putting the Nation's fiscal house back in order and to get our economic policy priorities straight. I salute the chairman of the Budget Committee, the indefatigable KENT CONRAD, for the great job he has done over the years in trying to get our country back on the right fiscal track.

For the last 6 years, we have been governed by a shallow economic strategy, guided by deep and indiscriminate tax cuts. The strategy has produced burgeoning deficits, mediocre economic performance, and a serious global trade imbalance. My colleagues and I on this side of the aisle have a different policy vision. We believe the middle class is the backbone of the country and that when we pursue policies to help the middle class feel confident about their economic future, we produce a strong economy, capable of meeting just about any challenge.

We have not had those kinds of policies or that kind of economy over the past 6 years. The economy went through the most prolonged jobs slump since the 1930s, as it struggled to recover from the 2001 recession. Then, while the economy was growing, it was not producing enough jobs. In the summer of 2003, job creation began to turn upward again but not as rapidly as we were used to in past economic recoveries. Something was still missing--growth in real wages.

In the past, increased productivity meant real wages increased. In recent years, American workers have continued to be remarkably productive. However, while our output per

hour grew 18 percent from 2001 through 2006, after adjusting for inflation, workers' pay and benefits grew only by half as much--8.7 percent. That is serious stuff. When output goes up and workers only retain less than half of it, something is the matter.

Even that modest growth in compensation came much more from benefits than from wages. It is not that employers were becoming more generous in providing benefits. To the contrary, benefit costs have been increasing because health care insurance costs are rising, and employers have had to make contributions to restore the solvency of their pension plans. Those higher benefit costs squeezed take-home pay, but workers have not been getting more generous benefits in return. They are shouldering more of the burden for their health insurance, and their pensions remain in jeopardy.

So where have the benefits from economic growth been going? They have been going to profits and salaries and bonuses of top executives. Profits as a share of national income are at an alltime high, and incomes at the very top of the economic scale have been soaring. At the same time, middle-class families and families striving to get into the middle class have been struggling to get ahead.

I wish I could say businesses have been investing their profits to make the economy grow, but another remarkable feature of the current economic recovery is how slowly business investment is growing relative to profits. Business profits have been flush, yes, but business investment spending has been weak. There hasn't been any real trickle down from the President's huge tax cuts to the rest of the economy. We had a small growth spurt for a couple of years, but the most recent news paints a picture of an economy that is growing at a pace below its long-term sustainable potential.

The main results of the President's tax cuts have been, A, larger budget deficits, and B, reduced national savings. With less of our own savings, we are borrowing more from the rest of the world to support our current standard of living. The record current account deficit last year--the amount we had to borrow from the rest of the world to finance our trade deficit--was equal to a stunning 6.5 percent of the entire GDP; 6.5 percent of the GDP goes to financing our trade deficit. We are borrowing more than ever from the rest of the world. Those debts will be paid back with interest from the income of our children. The Federal Government is increasingly reliant on the rest of the world to buy our public debt, and who knows what kind of financial crisis would ensue if the rest of the world decided they no longer wanted to hold such vast quantities of U.S. debt. Even if they don't, the idea that we are saddling our children to repay this debt is not fair to them and not good for the future of America.

To conclude, it is no wonder that middle-class families do not give President Bush much credit for the economy. They are paying more for gas and utility bills. Their health insurance and prescription drug costs are rising much faster than their pay, and college tuition costs are through the roof. They see good manufacturing jobs disappearing and a wave of new competition from economies such as China and India. They are also less likely to support expanded trade because they sense that the Government is not on their side when it negotiates trade agreements, and they see that some of our largest trading partners regularly flout the rules of free trade. They see a Federal Government that doesn't pay its bills and is building up foreign debt that will be a burden on our children and our grandchildren.

I commend Senator Conrad for crafting a budget resolution that gets us started on the road to recovery from these misguided policies. There is much work to do, but we are off to a good start with this budget resolution.

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Mr. SCHUMER. Thank you for yielding. I am going to talk a lit bit about the U.S. attorneys in response to the comments that have been made today from the White House.

The bottom line is very simple, to paraphrase ``The Godfather'': The White House has made us an offer that we cannot accept. We cannot accept it very simply because it is no way to get to the truth.

Mr. Snow said today that the White House wants to get to the truth. Well, if they want to get to the truth, what is wrong with testimony under oath? Do we not have oaths to ensure that truth is given?

Karl Rove was mentioned by Mr. Snow himself at one point, who stated incorrectly Karl Rove's involvement and then corrected himself. No one is saying there was any prevarication there. But with so many misstatements that have been out there, so many corrections, doesn't it make sense to interview witnesses with a transcript, under oath?

Because if we do not, we will never get to the bottom of this. We Democrats want to resolve this issue quickly. We want to get the facts. We want to find out what went wrong--it is clearer and clearer that many things did--and correct them and move on.

But when the President gives an offer that does not allow the truth to be gotten--no oaths, no transcript, no public testimony--it does not serve the purpose of finding out what happened, resolving it quickly, in a fair and nonpartisan way, and then moving on.

I hope the White House would reconsider its offer, would be willing to negotiate--they have stated they have not--and then we can finally get to the bottom of the matter.

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