For the economy to get back on track, it needs insurance against a severe recession in the short run and insurance against escalating deficits and debts in the long run.  A stimulus package consisting of temporary tax relief and temporary increases in government spending can provide both.

With the exception of the household tax rebate aimed at lower- and moderate-income workers, this stimulus package does little to help those that need it most.  The majority of the tax provisions contained in this package are permanent, including a cut in the capital gains tax, a retroactive repeal of the corporate Alternative Minimum Tax (AMT) and an extension of benefits for multinational insurance and finance corporations.  These permanent changes will not stimulate the economy in the short run and instead will put the Social Security and Medicare trust funds at risk in the long-term.  

Additionally, the acceleration of recently-enacted tax cuts would only benefit the top 25 percent of all income tax filers, who are likely to save more and spend less of these tax cuts than those with lower incomes.  A more effective stimulus package would combine the household rebate aimed at lower- and moderate-income workers with a temporary incentive for business investment.  

Congress has historically responded to severe economic downturns by providing additional weeks of extended unemployment benefits for workers.  In fact, during the 1990-1991 recession, Congress extended unemployment insurance (UI) benefits nationally on four separate occasions.  H.R. 3090 blatantly disregards these past precedents by simply giving states a mere $9 billion worth of block grants that may or may not be used to extend or increase unemployment benefits for laid-off workers.  

This measure also fails to provide laid-off workers with adequate health care coverage.  The average monthly COBRA premium is unaffordable for most displaced workers, who are barely making ends meet with their monthly UI benefits.  Although H.R. 3090 would give states $3 billion in health care block grant funds, thousands of workers who have lost their jobs since September 11th would still remain uncovered.  

Equally important to these short-term stimulus policies is insurance against escalating debt.  We need a multiyear budget plan that covers the real costs of both the war on terrorism and the country’s commitments to current and future retirees.  Unfortunately, if this measure is adopted, its permanent toll on government revenues will require even more painful trade-offs among the nation’s priorities in the future.  

Even before the terrorist attacks, the enormous tax cuts scheduled over the next decade had dealt a severe blow to the nation’s long-term fiscal outlook.  According to both the Office of Management and Budget and the Congressional Budget Office, during the next decade, the federal surplus will be limited to funds earmarked for Social Security and Medicare.  The Administration’s tax cuts for the most affluent households have already wiped out the remaining on-budget surplus.  

We must ensure these surpluses are replenished so that we can honor our future obligations.  We must also provide every dollar needed to win the war against terrorism and to ensure the security of Americans wherever they may be.  But in addressing these new and urgent priorities, we should remember the challenges that we faced even before the tragic attacks.  Without compromising our vital commitments, we need to ensure that any policy changes address these new short-term challenges without worsening our continued long-term concerns.  

For these reasons, I support the balanced, fiscally responsible Democratic substitute that deals with our immediate economic concerns without damaging the nation’s fiscal health.  It provides immediate relief to displaced workers while stimulating the economy with temporary business and individual tax cuts.   Unlike H.R. 3090, the substitute promotes long-term economic stability and national security by making targeted investments in our nation’s infrastructure.  Finally, the substitute pays for itself by delaying the top income tax rate cut approved earlier this year, which benefits only our nation’s wealthiest individuals.    

I urge my colleagues to support the Democratic substitute and to reject this reckless and misguided economic stimulus package, which will further jeopardize our future fiscal security, while offering little assistance to those most vulnerable in the current economic climate.