The Economy

Floor Speech

THE ECONOMY -- (Senate - September 18, 2008)

BREAK IN TRANSCRIPT

Mr. WHITEHOUSE. Mr. President, as we speak, people are losing their jobs, losing their homes, and often losing the hope that their situation will improve anytime soon. According to many, the worst may yet be ahead of us. For the first time in generations, we Americans can no longer promise our children they will be better off than we are. That prospect strikes at the very heart of the American dream.

In less than 2 months, Americans will elect a new President who will inherit an economy indelibly marked by the negligent and incompetent decisionmaking of the Bush administration. No matter what one Presidential candidate may think, the fundamentals of our economy are far from strong. Our economy is off the rails. I believe it is important to take a few minutes to consider how it got dragged off the rails and, more importantly, what must now be done to restore Americans' faith in our economy and put our country back on more solid fiscal ground.

President Bush's successor, whoever he may be, will confront four serious problems: an out-of-control financial market, a staggering Federal debt, a looming crisis in health care costs, and an increase in Social Security obligations.

For the past 8 years, the Bush administration has preached over the financial markets a gospel of uncontrolled deregulation. Simply leave the banks and the financiers and the lenders to their own devices, they said, and all will be well.

Well, all is not well. Markets are places where people come to make money; they do not come for altruistic motives. And some are clever enough when they come to those markets to try to rig or game the market in their favor, to gain monopoly power, to hide information, to cheat, to create special advantage--in short, to find a way to gull the suckers. Markets need to be defended against that age-old risk. Markets have to operate honestly, transparently, and reliably. That is where regulation comes in. That is how markets are defended against crooks and schemers. That is why we have an FTC, an SEC, a CFTC, a FERC, to keep markets honest.

Special interests constantly seek special advantages, and it is the regulators' job to push back. In that constant struggle of the special interests against the regulators, the Bush administration always took the side of the special interests. They have systematically undercut the regulators in their efforts to keep markets safe. And now here we are.

Senator McCain has been against the regulators, even back to the savings and loan scandals of the 1980s. The schemers, the manipulators, the Enrons, the subprime mortgage packagers, the oil market speculators, the credit default swap artists--they all found a friend in the Bush administration. They all found an ally in the Bush-McCain policies of deregulation. And now here we are.

Under an administration that cared more about protecting big investors than protecting consumers, one might expect that at least the stock market would have thrived. But after 225 percent growth during President Clinton's 8 years in office, the stock market now hovers just about where it stood in 2001, when President Bush took office. Instead of growing by leaps and
bounds, as we in America have come to expect, under the Bush administration, our economy stood still. I ask my colleagues: Would investors prefer 225 percent growth and then paying a responsible capital gains tax, or would they prefer having big fights about what the capital gains tax rate should be while nobody makes any money? There is a lesson here. Bad economic policy is not cured by mindless tax cuts. Anybody in their right mind would rather be here than here, if they are in the market.

The month George Bush became President, the Congressional Budget Office, the nonpartisan accounting arm of Congress, projected we would see surpluses straight through the decade. These budget surpluses, the product of President Clinton's responsible governing, were projected to be enough to completely wipe out our national debt by 2009--to completely wipe out the national debt by 2009. Instead of maintaining the surpluses and paying down the national debt, President Bush chose tax cuts for the wealthiest Americans, a war he wouldn't pay for, and bad economic policies to amass a mountain of debt that he will leave to the next generation.

This chart shows the difference between the budget left by President Clinton and the one President Bush created. The difference between the two lines, this red area, is the measure of the cost of the Bush Presidency. The difference between the surpluses left by President Clinton and the deficits run by President Bush and his Republican enablers in Congress is a staggering $7.7 trillion. Perhaps the more tangible number is $260 billion, the interest we will have to pay next year on this Bush debt, $260 billion in interest, much of it to foreign nations such as China and Saudi Arabia that do not have our best interests at heart. If we could have used that $260 billion that we now need to pay interest on the Bush debt for other national priorities, here is what we do could have done: fixed almost every unsound bridge, doubled enrollment in Head Start to help kids get ready for school, doubled all Pell grants to help kids get access to college, and provided every American with health insurance--all of it. That is how big $260 billion is, and that is what we are blowing on the Bush debt.

The nonpartisan Congressional Budget Office recently estimated that the national debt will go up by another $2.5 trillion over the next decade. The next administration is going to have to figure out how to deal with that mountain of debt. I think we need a Bush debt repayment authority to study the possibility of bringing the Bush debt off budget, to handle it responsibly, to remind the American public what this Presidency has cost them, to pay the Bush debt down responsibly over time. But we must do something.

In addition, as the baby boom generation reaches retirement, we also face a tidal wave of health care costs that threatens to drown the Treasury and force unthinkable choices about health care for the citizenry. According to an analysis conducted by the nonpartisan Government Accountability Office, we have $34 trillion in unfunded future Medicare liabilities alone. That is unsustainable. And the longer we wait to reform the system, the worse it will become. President Bush has wasted the better part of a decade standing idly by as this problem exploded, as health care costs grew and opportunities for reform came and went. Time is not on our side. The need is pressing, and we have spent 8 years making no progress at all.

I have said over and over on many occasions in this Chamber that our health care system needs fundamental change. I will not pursue that point at this juncture, but let me say, our health care system is itself broken. It delivers unsatisfactory results at vast expense, and we need to fix it.

As we prepare for a new administration, we need to prepare for the wave of health care costs coming at us. Systemic reforms--a health IT infrastructure, payment reform, major quality improvements--must be at the heart of that effort.

Finally, the next administration must grapple with the challenges of Social Security. As with all these issues, the choice of President will make all the difference. Senator Obama will ensure that Social Security remains a strong bedrock of retirement security for generations to come. But Senator John McCain supports privatizing Social Security, putting it in the stock market. This is an important point. Senator McCain and his Republican allies prefer to invest seniors' Social Security funds in the stock market that just dropped by 500 points the day before yesterday and another 450 points yesterday, the very same stock market that stagnated through the entire Bush Presidency while costs and prices rose by double digits. That is not a solution. That is more of the same problems.

As for the blame game, which I have heard a bit about on the floor this morning, it is bad enough that bad economic policy caused this preventable disaster. It is worse if we should fail to learn its lessons. I can understand why the proponents of the economic theories that brought us here don't want that talked about, but it would be wrong and irresponsible not to learn from this disaster. It was preventable. We made mistakes. It was economic folly that brought us here and regulatory irresponsibility. To now allow that entire lesson to pass would be an added shame for our country.

I yield the floor.

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