Stimulus Package Report

Floor Speech

Mr. DURBIN. Mr. President, Senator McCain is a friend of mine and someone I respect. We came to the House of Representatives together 27 years ago. He came to the Senate before me, and we have served together for over 12 years. I respect him very much, and I know he speaks from the heart when he addresses this stimulus package. But I would like to take a few moments to reflect on some of the arguments he has made, and at any point in my presentation invite the Senator, if he is nearby, to come join me on the floor to discuss this matter in debate. Sadly, the Senate no longer debates in the old style. We give speeches and many times are like ships passing in the night. So I hope, if he is available--and I know he may not be; he has a busy schedule, too--I hope he will return to the floor, and we can talk about some of the arguments he made, and he can address them directly. In the meantime, I would like to speak to a few of them myself.

Senator McCain argues that spending $790 billion, which the President has suggested for a recovery and reinvestment, is too much money. He argues the bill is too large, there is too much money in this bill. Keep in mind, this money is going to be spent out over a 2-year, maybe 3-year period, most of it on the front end, most of it in the first 18 months, but much of it over a longer period of time. So we are talking about roughly $350 billion to be spent, for example, in the first year, maybe as much as $600 billion or $700 billion by the end of the second year. It is a huge sum of money. It may be the largest bill we have ever considered, certainly the largest stimulus bill we have ever considered, on the floor of the Senate.

But I will tell you that most economists, in looking at this bill, raise the question about whether it is enough, considering the size of the American economy, No. 1. It is an economy that generates more than $14 trillion a year in the production of goods and services. It is an economy that is flat on its back. It is an economy deep in recession, with high unemployment, with businesses failing, with families losing their health insurance, with a lot of misery being spread across the country. The obvious question is: What can we do to change it?

Last year, President George W. Bush saw this coming, and he suggested the way to change it was to offer tax breaks, tax rebates to families. The Democratic Congress said to the Republican President: If this is what you want us to do to try to turn the economy around, we will do it. We enacted bipartisan legislation to give President Bush about $150 billion to send back to families in checks of $300 or $600 in the hopes that would breathe some life back into the economy, cause people to go out and spend more money, buy more goods and services, invigorate businesses, save and create jobs. We did it. We signed up for that approach. It did not work. Mr. President, $150 billion was spent for individual families. There was the $300 or $600 check, which I am sure provided some relief. But at the end of the day, when we took a look at the economy, it continued to cascade downhill. Simply doing $150 billion in tax cuts did not do it.

Then President Bush came to us and said: I need $700 billion. It was a staggering amount of money, but we were told by Secretary Paulson, Secretary of the Treasury, Ben Bernanke, Chairman of the Federal Reserve, and others, that if we did not do it and do it quickly, the economy could go into a crisis which could be felt worldwide.

It was the most sobering meeting I ever attended as a Member of Congress when I heard this, and I felt duty-bound to do everything I could to cooperate with the Republican President, to give him the resources he wanted to try to breathe life back into this economy, to get the credit institutions moving forward, and I voted for it. At the end of the day, $350 billion was spent and, I am afraid to say, very little positive occurred. In fact, we are still trying to get an accurate accounting of what happened to that money.

These were the first two attempts by the previous Republican administration; first, a $150 billion tax cut, then a $700 billion TARP funding they called it--the Troubled Asset Relief Program--which the Democrats cooperated in and said: Mr. President, though we are of a different political party, this is a national crisis, and we will work with your best minds to try what we can to turn this economy around.

We debated it, and we changed parts of it. We are expected to. That is what Congress has as a responsibility. But there was no question from the beginning that the Democratic Congress was going to cooperate with the Republican President because we had a national emergency on our hands.

Now comes the new President, President Barack Obama, sworn in a little over 3 weeks ago. The crisis, which we had hoped would have turned, in fact, had worsened. He inherited the worst economic crisis in 75 years. You have to go back to President Franklin Roosevelt and the awful Depression he saw to find another President faced with this kind of an economic challenge. President Obama came to office and said: We have to do something. We have to try to find a solution. We need to put the best minds, the best economists, and the best leaders together to come up with an approach which will stop this recession from growing and getting worse and will turn this economy around. He said, similar to President Bush: I would like the help of both political parties to do it.

Well, it is natural a President would ask for that. Because the crisis that faces us is not a Democratic crisis or a Republican crisis. Families who do not vote, families who are Independents, families of both political parties are being affected.

President Obama made a presentation of this recovery and reinvestment program, and he estimated the cost to be around $750 to $800 billion. The Senator from Arizona thinks that is an unnecessarily large sum. I might say to the Senator that he knows, as well as I do, that last year the U.S. stock market lost $7 trillion in value. You can see it in the Dow Jones index--now somewhere near 8,000. At one point, it was near 15,000. Mr. President, $7 trillion in lost stock market value is $7 trillion in lost savings and lost retirement plans.

To argue that spending $350 billion to try to stop this slide is overspending, overlooks the obvious. With $7 trillion lost in stock market value, to do nothing, to allow this to continue, is to run the risk that even more value will be lost and the dreams and plans of families across America will have to be changed.

There is something else we know as well. Because of the state of the economy, we have what the economists call the paradox of thrift. If you look to your near future for your family, and you are worried about your job or your wife's job or your children, you are likely to say: We better be careful.

We shouldn't make big purchases now until things are pretty clear. Put more money in savings and hold back a little. Be thrifty. That is a natural reaction. It is a defensive mechanism when people see a troubling economy. Although it makes sense on an individual family basis, it creates in the overall economy exactly the opposite of what we need. What we need is more confidence and people stepping forward and saying, I think we are through this; I think we will be through this soon, and I need to make some purchases that I have held off making. As they buy things, they create more economic activity, businesses flourish, and jobs are created and saved. So as people are thrifty in an economy and hold back, it deepens the recession. Deflation is what they call it. This year we will lose $1 trillion in spending in America. We estimate that families holding back, consumers holding back will spend $1 trillion less. Remember, our overall economy is about $14 trillion, so that represents about 7 percent of our economy which will contract because of fear, concern about our future.

What President Obama has said is at this moment we need to inject money into this economy. We need to show the American people we can save and create jobs. We need to have more economic activity so that businesses will survive, and we need to see our way through this crisis. That is what he has come forward with. So the critics of President Obama's plan have no alternative. They are not proposing anything that will stimulate this economy to this measure. They offered a plan which I think was at least thoughtful in one respect which tried to address the housing crisis, but it didn't come close to investing the money in this economy that we need to try to turn it around. So I say to my friends on the Republican side: If you can't come up with a viable alternative, if you can't come up with a solution, then being critical of President Obama's plan doesn't have much credibility. You need to acknowledge we have a problem and work with us to try to solve it.

It is interesting too that there is this argument on the Republican side--and I heard it from the Senator from Arizona--that this is too much money. If we don't do something, if the recession continues and gets worse, here is what happens: Fewer people are working, fewer dollars are collected for income tax, fewer dollars are being spent, less sales tax is collected, values of real estate continue to go down, property tax receipts go down, and we find that the receipts and revenues of the Government start getting fewer and constricted. At the same time, the demands for government services go up. Unemployed people need a helping hand. They need a hand to feed their families and keep them together. They need a hand to provide some kind of health insurance. So the demands for government services go up and revenues go down, and it is a perfect recipe for deficit.

It is no surprise--and I think this chart, if I am not mistaken, shows it--across America 46 States are now facing budget deficits, and it could get worse. It shows a cumulative budget deficit of $350 billion through 2011. So failing to respond to this situation will mean even deeper deficits. To argue that spending about $790 billion now will add to the deficit is to ignore the obvious. Doing nothing and allowing the recession to occur and get worse will give us deficits not only this year but for years to come, not to mention the suffering that families and businesses will go through in the process.

If I came to Senator McCain and said to him: I know of your interest in national defense. You are a war hero from Vietnam and I respect you so much for it, and I know you have focused on Americans' national security more than any other issue. If I told you there was a threat to America, whatever it might be, and that we had better prepare ourselves to defend ourselves, would you stop and say first tell me how much it costs, or would you first say keep America safe, that is our first obligation; we will talk about the cost later? I expect that would be his reaction. It might be my reaction as well--it probably would be my reaction as well. So here, when we face a national economic crisis, for any Senator to stand up and say, You know, there is only a limited amount of money we can spend on this, is to ignore the fact that if you don't make the right investment and turn this economy around, we will pay dearly for years to come.

Now, there was also talk about the way this bill was written. It is true that much of the negotiation for this bill occurred behind closed doors, but there was a conference committee, which is a rarity on Capitol Hill, where Members of both political parties came forward to talk about the bill. Why did so much of it happen outside of the conference committee? Well, it reflects the reality of how business is done most of the time here on Capitol Hill. I know it needs to get better, Senator McCain does, and I am sure President Obama agrees, but this is what we came down to. This is the dilemma we came down to: President Obama reached out to House Republicans and Senate Republicans and said join me in writing this bill, and only three stepped up. Three Republican Senators said we will join you in writing the bill. They have played a major role, those three Republicans, in writing this bill. They have changed priorities in spending. They have eliminated some programs. They have pushed forward with more money in some areas and less in others. They have made a profound difference in the bill because they started with the premise that if we can bring this bill to a point where they can accept it, they would vote for it. Now, that is not an unreasonable thing to ask.

If someone wants to sit down and amend the bill and change the bill, the obvious question is--and at the end of the day we are successful and make the changes you asked for--will you help us pass the bill? For many Republicans, the answer has been: No; we want it both ways. We want to change this bill, but we are never going to vote for it.

I recall an amendment offered by a Republican Senator from Iowa in the Senate Finance Committee which added $70 billion in costs to this bill for a tax cut I personally approve of but wasn't in the original bill. So he added $70 billion in costs to the bill and then came to the floor and said I can't vote for this bill because it costs too much. Now, wait a minute. You can't have it both ways. You can't add to the cost of the bill in the committee and then come to the floor and say I can't vote for the bill because it costs too much. It happened.

Another Senator on the floor offered what I thought was a valuable idea. It needed some changes here and there but a valuable idea: Create tax incentives for people to buy homes. I like it. I believe we have improved it in this bill, but it was at least a sound idea to start moving the housing market forward. Well, it turns out that Senator as well added between $11 billion and $30 billion to the cost of the bill with his amendment which was adopted, and then said I can't vote for the bill; it costs too much. Again, you can't have it both ways. If many Republican Senators wonder why they aren't in the room talking about the ultimate bill, it is because they have already made a public pronouncement that no matter what you do to the bill, we are not going to vote for it. How much time should we spend talking to those Senators? We are never going to pass a bill if we spend our time agreeing to amendments they like so they can vote against the bill. That is the case, unfortunately, too many times.

There is also this notion Senator McCain raised that Speaker Pelosi said, We won the election; we wrote the bill. Well, I can tell my colleagues the American people did speak on November 4 and there was a decision in the election, but President Obama could not have reached out more to try to bring in Republicans in the House and Senate to help write this bill. Three stepped forward. Those three were in on the negotiations. Those three had a profound impact on the bill. I respect them very much; the two Senators from Maine, Olympia Snowe and Susan Collins, and the Senator from Pennsylvania, Arlen Specter. If you would ask them today: Did you influence this bill, the answer is obvious. They did. They made a big impact on this bill because they were prepared to sit down and work with us and said, If we can find an agreement, we will vote for it. So, in fact, we did win the election, but we know we need the help of both political parties to solve our Nation's problems, and we are trying our best.

Senator McCain also raised questions about the cost per job. If you take the overall cost of the bill--$790 billion, roughly--and the projected increase in jobs--anywhere from 1 million to 3.9 million--he does simple math and comes to the conclusion that we are spending too much money for each job we are creating. What the Senator did not note was that about a third of this bill goes to tax cuts to everyone. It isn't in the creation of a single job, but in trying to help all families--at least those in income categories that we characterize as middle-income families, working families--so that is about a third of the bill.

The second thing he didn't acknowledge was the money spent in creating a job has to be looked at in the long term. If you create a job for a worker in Illinois and that worker ends up getting paid $50,000 a year, that worker is going to take his or her paycheck and spend it. In spending that paycheck, it is going to put more money back into the economy. At the shops and stores they go to there will be receipts, profits, more people working, and the people who are working there will take their paychecks and go on and spend them as well. It is the so-called multiplier effect which I am sure the Senator from Arizona is well aware of. So to assign the value of each job as being $100,000, $200,000, whatever the cost is, is to overlook the fact that that money, through the workers, is spent and respent time and again. That is what helps us rebuild the economy.

We also had some criticism from the Senator from Arizona about the ``Buy American'' provisions. I have to tell my colleagues something. I respect him, because I know he believes this in his heart of hearts. I certainly do not stand here and endorse isolationism, protectionism, or economic nationalism, but shouldn't our priority with America's tax dollars be in putting Americans to work, creating good-paying jobs right here at home, buying as many goods and services within our economy as we can?

Senator Dorgan of North Dakota offered an amendment which was a very thoughtful amendment and it said: We are going to buy American, but whatever we do will be consistent with our international trade agreements. That is a reasonable approach. I think as far as we can go under existing law and treaties, we need to try to help American families get back on their feet and Americans back to work. There is nothing unreasonable about that. I think it may go a little too far with this economist's article and others who argue we are getting back into some era of protectionism. Senator Dorgan's amendment I think was a thoughtful one and will help us address that issue.

There was also some concern about Governors. I can tell my colleagues why there is a provision in this bill relative to the power of Governors. We have this amazing situation where there are literally Governors--only a handful--across the Nation who are saying we don't want the money. We don't need the money for our States. I don't know why you are going to force us to take this money.

Well, that is their political point of view. Most States are having trouble. So what we said at the outset is we want Governors to request the funds. Literally billions of dollars will be coming to their States and they should request it. That is not unreasonable. We went on to say that if your Governor doesn't request the funds, doesn't ask for the funds to help people in their States, that the legislature in each State can do it. Why did we put that in there? Because some of the money will not go through the Governor's office, but will go directly, for example, to school districts. Take an example in my State. In my hometown of Springfield, IL, the school district there will get additional funds for IDEA. That is the Federal program that provides money to school districts so they can educate and help children with special needs. It is an expensive commitment and it is one the Federal Government has not done its share of over the years. That money would go to the school district to help them meet their needs for teachers and classrooms, and it would also suppress the need to raise property taxes which no one wants. Also, money will go to the schools in my hometown that have a larger percentage of disadvantaged kids, kids from low-income families. It is called title I. That money is coming from the Federal Government down to my local school district. Well, the Governor in my State is going to accept the funds, I can assure my colleagues, but what if we were in a State where the Governor said we don't need this money. I don't know why Washington did it. I am not going to sign up and ask for it. There ought to be a way that school district can still benefit even if the Governor sees it differently, and that is the reason for the provision Senator McCain raised.

Senator McCain also said that bill was done in a partisan fashion, behind closed doors. I can tell you the Republican Senators who were engaged in this process on the Senate side made it as bipartisan as possible. They were involved--all three of them--in very detailed discussions about what was included in the bill. Yes, it is true, some were discussions behind closed doors, but, ultimately, this bill is public for those interested in reading and carefully looking through it, and they should. That is part of the process.

I might add, there is more to follow. This bill has no earmarks in it. There is no specific project that is appropriated funds in this bill. That was our promise. There is increased funding in all the agencies receiving more funds for oversight so the inspectors general can keep an eye on the money being spent. There will be an accountability and transparency board to coordinate and provide regular reports to Congress. We are going to have a recovery Web site where people across America can follow the expenditures of these funds, so they can see what is happening nationally and in their States.

I think it also is going to protect State and local whistleblowers. These are tax dollars collected for people who work hard for them. These dollars should be spent in a responsible way, with transparency.

Senator McCain also spoke about Amtrak. Senator McCain is on the record for a long time against Amtrak. Again, I respect his position but disagree with it completely. We found in Illinois and across the Nation when the price of gasoline went over $4, millions of Americans rediscovered, or discovered for the first time, Amtrak. You need a reservation to get on a train in Illinois because they are packed with people who realize it is a lot cheaper to use the train. Of course, in using a train, there is less traffic congestion and less pollution. Ultimately, expanding Amtrak--even high-speed rail, which is part of this--is part of the future. Senator McCain sees it differently. I respect him for that, but I think the investment in Amtrak is money well spent, jobs right here in America building tracks, expanding Amtrak service, and providing train service that will benefit our country for a long time to come.

I might say, as well, to my friend from Arizona that this bill, though he and his fellow Senators may vote against it, is going to create or save 70,000 jobs in Arizona over the next 2 years. It will provide a tax cut of up to $800 for more than 2 million workers and their families in the State of Arizona--a tax cut they will greatly appreciate, I am sure. And 75,000 Arizona families will now be eligible, under this bill, to deduct college education expenses for their kids in a way to give them a helping hand so the kids can stay in college, get their degrees, and go on to be employed profitably and successfully in their lives. It is going to provide additional money for the unemployed in Arizona of $100 a month and give them a helping hand in paying for health insurance.

So whether the Senators voted for this or not, there are benefits coming directly to their States, which most people would agree are important. It will provide funding sufficient to modernize at least 193 schools in Arizona so the children will have laboratories and libraries and modern classrooms for the 21st century. Money will be invested in renewable energy so we will have less dependence upon foreign oil. We are going to move toward the computerization of health records in every State, including Arizona, Illinois, and Virginia, because we believe that means doctors can do a better job. They can see the background of a patient when making a diagnosis. It means there are fewer medical errors. Though that was criticized as being part of the bill, I think it is money well spent.

If we are talking about health care reform, we need to modernize the way we capture and hold health records. Also, the Veterans' Administration's system already has computerized records. It is the way to go. This bill moves America in that direction. This bill, when it comes to the VA, has $1.2 billion for VA hospital and medical facility construction and improvements. Money that otherwise would not have been spent on the VA will be spent because of the stimulus bill. There is $2.3 billion for Department of Defense facilities such as housing, hospitals, and childcare centers. There is $555 million to expand the DOD homeowners assistance program. There is $150 million that will be used for more personnel to process disability claims--something we need in Illinois, and I bet other States need as well.

These are things I think are critically important to put spending in this economy, to breathe life into it, to create and save up to 3 million or 4 million jobs, to try to stem the tide of this recession.

Again, at the end of the day, we may only have three Republican Senators voting for it, but unless we stand and act together, we are not going to solve this problem.

When President Bush needed help last year with his economic stimulus plan, we stood together, Democrats and Republicans, and gave it to him--first, the $150 billion in tax cuts and then the President's request for the so-called TARP funds of $700 billion. We gave the President the bipartisan support he wanted, even though some of us may have questioned whether it was exactly the right thing to do. We knew we had to act together.

Now there is a different mood. President Obama's plan is facing a different standard by some of the Senators on the other side of the aisle. I think we need to jumpstart this economy and not only bring us to recovery but reinvest in this economy so we have less dependence on foreign oil, better sources of energy that don't pollute the environment, modernize our health care system, modernize our school system, prepare it for the 21st century, and do all these things by creating jobs in America. That is what this is all about. That is why it is so critically important.

I yield the floor.

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