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Joseph Lieberman on Budget & EconomyDemocratic Jr Senator (CT, retiring 2012), ran for V.P. with Gore, ran for president 2004 |
Clinton found this appealing. He had balanced his budget as Arkansas governor. He reviewed the 1992 campaign and his 1993 economic plan.
2nd, Morris reminded the president that balancing the budget would be good for the economy and would reduce interest rates. Balancing the budget would be the single most reassuring thing he could do, Morris said. The action would ensure a robust economy all the way through 1996--key to reelection. 3rd, he said, it would preempt the most damaging attack on Clinton and congressional Democrats. For a decade the party had been labeled "tax and spend." Well, how in the hell could you be a tax and spend liberal if you have a balanced budget?
"Balance the budget in 10 years," he proposed on Tuesday June 13.
LIEBERMAN: We can get the economy going again. We need a Democratic president to make it happen.
FACTCHECK: In fact, the economy grew at the unexpectedly rapid annual rate of 8.2% in the third quarter (June, July and August) according to the latest official figures from the Department of Commerce. That was the best quarterly growth in 20 years.
A: Until middle class Americans and those working hard to get into the middle class get their jobs back, the 3.5 million that they lost under Bush; until they begin to be able to afford their health insurance or get it back--2 million lost their health insurance under Bush; until they have some sense of ability to send their kids to college without coming out with an enormous burden of debt, then we don’t have an economic recovery.
A: I think it’s because, as the election gets clearer, people are saying to themselves: Hey, the times have really been good, eight years we’ve gone from the biggest deficits to biggest surpluses, 22 million new jobs, and a good stock market. Why change horses here in mid-stream? Let’s keep going in the same direction. I think that’s going to move people to Al Gore.
Q: Why is it close? Shouldn’t your ticket be way ahead?
A: I think it’s just because a lot of people maybe have thought that the prosperity goes on automatically. It doesn’t. If Al Gore is elected, we are going to continue to have surpluses in the federal government, which is the most important thing the federal government can do. Honestly, an American Academy of Actuaries said last week, under George Bush’s economic plan, we are going to go back into annual deficits, won’t pay off the long-term debt, high interest rates, high unemployment, not where we want to go.
LIEBERMAN: We’re not spending any more than is projected by the experts. In fact, unlike our opponents, we’re setting aside $300 billion in a reserve fund just in case those projections the nonpartisan experts make are not quite right. We understand that balancing the budget, keeping America out of debt is the way to keep interest rates down and the economy growing.
CHENEY: With respect to the surplus, we’ve got to make some kind of forecast. We can’t make 12 month decisions in this business. We’re talking about the kinds of fundamental changes in programs and government that are going to affect people’s lives for the next 25 or 30 years. And one of the difficulties we have is that for the last eight years, we ignored a lot these problems. We haven’t moved aggressively on Social Security. There are important issues out there that need to be resolved, and it’s important for us to get on with that business.
A: The estimates that Dick referred to are the estimates of the Republican staff of the Senate Budget Committee. We use the numbers of the nonpartisan Congressional Budget Office. We agree that the surplus in the Social Security fund should be locked up. We believe that the surplus in the Medicare fund should be locked up. They raid the Medicare trust to pay for their tax cut. Let me come back to the remaining $1.8 trillion. The numbers show that $1.6 trillion goes to that big tax cut which sends 43% to the top 1%. But when you add on the other spending programs that our opponents have committed to, plus the cost of their plan to privatize Social Security, they are $1.1 trillion in debt. And that means we go back to higher interest rates, to higher unemployment, to a kind of stealth tax increase on every American family, because when interest rates go up, so too do the cost of mortgage payments, car payments, credit card transactions.
A: Vice President Gore and I have a long-term strategy. If this administration had been given the funding it requested from Congress, we’d be further along: developing cleaner sources of energy; giving tax credits to use energy more efficiently; creating a new generation of vehicles that can get 80 miles per gallon. We also have a short-term strategy to deal with ups and downs of energy prices. I know it was controversial, but we believed it was important to reach into the Strategic Petroleum Reserve, put it in the market, show the big oil companies and the OPEC oil-producing countries that we’ve got some resources with which we can fight back. We’re not just going to lay back and let them roll over our economy. And we did it also because gasoline prices were rising and home heating inventories were real low. Since the reserve was opened, the price of oil has dropped $6 a barrel.
Proponent's argument to vote Yes:Rep. LEWIS (D, GA-5): This bipartisan bill will provide the necessary funds to keep important transportation projects operating in States around the country. The Highway Trust Fund will run out of funding by September. We must act, and we must act now.
Opponent's argument to vote No:Rep. CAMP (R, MI-4): [This interim spending is] needed because the Democrats' economic policy has resulted in record job loss, record deficits, and none of the job creation they promised. Democrats predicted unemployment would top out at 8% if the stimulus passed; instead, it's 9.5% and rising. In Michigan, it's above 15%. The Nation's public debt and unemployment, combined, has risen by a shocking 40% [because of] literally trillions of dollars in additional spending under the Democrats' stimulus, energy, and health plans.
We had a choice when it came to the stimulus last February. We could have chosen a better policy of stimulating private-sector growth creating twice the jobs at half the price. That was the Republican plan. Instead, Democrats insisted on their government focus plan, which has produced no jobs and a mountain of debt.
Proponent's argument to vote Yes:Rep. PETER WELCH (D, VT-0): Citigroup supports this bill. Why? They're a huge lender. They understand that we have to stabilize home values in order to begin the recovery, and they need a tool to accomplish it. Mortgages that have been sliced and diced into 50 different sections make it impossible even for a mortgage company and a borrower to come together to resolve the problem that they share together.
Sen. DICK DURBIN (D, IL): 8.1 million homes face foreclosure in America today. Last year, I offered this amendment to change the bankruptcy law, and the banking community said: Totally unnecessary. In fact, the estimates were of only 2 million homes in foreclosure last year. America is facing a crisis.
Opponent's argument to vote No:
Sen. JON KYL (R, AZ): This amendment would allow bankruptcy judges to modify home mortgages by lowering the principal and interest rate on the loan or extending the term of the loan. The concept in the trade is known as cram-down. It would apply to all borrowers who are 60 days or more delinquent. Many experts believe the cram-down provision would result in higher interest rates for all home mortgages. We could end up exacerbating this situation for all the people who would want to refinance or to take out loans in the future.
Rep. MICHELE BACHMANN (R, MN-6): Of the foundational policies of American exceptionalism, the concepts that have inspired our great Nation are the sanctity of private contracts and upholding the rule of law. This cramdown bill crassly undercuts both of these pillars of American exceptionalism. Why would a lender make a 30-year loan if they fear the powers of the Federal Government will violate the very terms of that loan?
Proponent's argument to vote Yes:Rep. DAVID OBEY (D, WI-7): This country is facing what most economists consider to be the most serious and the most dangerous economic situation in our lifetimes. This package today is an $825 billion package that does a variety of things to try to reinflate the economy:
Opponent's argument to vote No:
Rep. JERRY LEWIS (R, CA-51): Most of us would agree that the recent $700 billion Troubled Asset Relief Program (TARP) is an illustration of how good intentions don't always deliver desired results. When Congress spends too much too quickly, it doesn't think through the details and oversight becomes more difficult. The lesson learned from TARP was this: we cannot manage what we do not measure. We cannot afford to make the same mistake again.
Sen. THAD COCHRAN (R, MS): We are giving the executive branch immense latitude in the disbursement of the spending this bill contains. We are doing so without any documentation of how this spending will stimulate the economy. Normally, this kind of information would be contained in an administration budget. For items that have a short-term stimulative effect, most of us will feel comfortable debating their merits as an emergency measure. But there is a great deal of spending that is not immediately stimulative.
Proponent's argument to vote Yes:Rep. DAVID OBEY (D, WI-7): Congress has tried to do a number of things that would alleviate the squeeze on the middle class. Meanwhile, this economy is sagging. Jobs, income, sales, and industrial production have all gone down. We have lost 600,000 jobs. We are trying to provide a major increase in investments to modernize our infrastructure and to provide well-paying construction jobs at the same time.
Opponent's argument to vote No:Rep. JERRY LEWIS (R, CA-41): Just 2 days ago we were debating an $800 billion continuing resolution. Now in addition to being asked to pay for a bailout for Wall Street, taxpayers are being asked to swallow an additional $60 billion on a laundry list of items I saw for the first time just a few hours ago. The Democratic majority is describing this legislation as a "stimulus package" to help our national economy. But let's not fool ourselves. This is a political document pure and simple. If these priorities are so important, why hasn't this bill gone through the normal legislative process? We should have debated each of the items included in this package.
It doesn't take an economist to tell you that the economy needs our help. But what does this Congress do? It proposes to spend billions more without any offsets in spending. The failure to adhere to PAYGO means that this new spending will be financed through additional borrowing, which will prove a further drag on our struggling economy.
Proponents recommend voting YES because:
My amendment says we are going to take about $18 billion as a strong signal from the Congress that we want to support effective programs and we want the taxpayer dollars spent in a responsible way. My amendment doesn't take all of the $88 billion for the programs found by PART, realizing there may be points in time when another program is not meeting its goals and needs more money. So that flexibility is allowed in this particular amendment. It doesn't target any specific program. Almost worse than being rated ineffective, we have programs out there that have made absolutely no effort at all to measure their results. I believe these are the worst offenders. In the following years, I hope Congress will look at those programs to create accountability.
Opponents recommend voting NO because:
The effect of this amendment will simply be to cut domestic discretionary spending $18 billion. Understand the programs that have been identified in the PART program are results not proven. Here are programs affected: Border Patrol, Coast Guard search and rescue, high-intensity drug trafficking areas, LIHEAP, rural education, child abuse prevention, and treatment. If there is a problem in those programs, they ought to be fixed. We ought not to be cutting Border Patrol, Coast Guard search and rescue, high-intensity drug trafficking areas, LIHEAP, rural education, and the rest. I urge a "no" vote.
Dear President-Elect Bush,
Members of the Senate New Democrat Coalition and the House New Democrat Coalition are interested in working with you to develop a responsible fiscal policy. We are proud of our records of fiscal discipline that have helped to produce the unprecedented surpluses for our country. We believe that continuing to use part of the surplus to pay down our national debt is a moral obligation that we owe to future generations. As New Democrats, we believe that a delicate balance can be struck between maintaining fiscal discipline, paying down our national debt, responding to the public’s understandable desire for common-sense tax relief and making important investments in our future. We are convinced that your stated goal of providing an excessive tax cut will lead to less debt reduction. This in turn would lead to higher interest rates resulting in lower capital investment and productivity growth and ultimately a lower standard of living for all Americans. We are ready, however, to work with you on a smaller package of tax cuts designed specifically to stimulate our slowing economy in the short run while protecting Social Security and Medicare. In the longer term we are eager to work with you on a policy that encourages individual savings and investment, invests in college education tax credits, promotes research and development and bridges the technology gap that exists in our country today.