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Press Release of Senator Cantwell
Cantwell Says Republican Budget Fails to Meet National Responsibilities
Friday, April 06,2001
WASHINGTON, D.C. – Following Senate passage today of the Budget Resolution for fiscal year 2002, U.S. Sen. Maria Cantwell (D-Wash.) called the president’s budget proposal “shortsighted and fiscally irresponsible, because it places political priorities above our national responsibilities.”
“This annual budget process is the first step in outlining our nation’s fiscal priorities for the coming year. It is critical that we balance our efforts to provide tax relief for working Americans with our need to pay for essential programs like Medicare and Social Security and our obligation to keep the national debt firmly in check,” Cantwell said. “The president’s proposals are filled with hidden costs that will be paid by working families, senior citizens and children. This isn’t responsible budgeting, it’s fiscal sleight of hand.”
Cantwell, who offered several amendments to try to strengthen and improve the budget resolution, said that she voted against final passage because in the end it fails the test for fiscal responsibility. She listed four key points she considered when deciding how to vote:
The budget resolution offered by the Senate Republicans fails to provide necessary funding to protect environmental, energy and land conservation programs, while shortchanging economic assistance for America’s family farms and cutting crucial health programs.
The proposal raids Medicare to pay for tax cuts. Cantwell said she favors tax relief, including changes to the marriage penalty tax inheritance taxes as well as tax credits for college tuition and dependent care, but she believes these tax cuts must be balanced against the need to protect funding for Social Security and Medicare.
It fails to pay down the national debt at a rate that would stimulate economic growth and ensure that we meet our future responsibilities.
The projected budget surplus is based on numbers that are unreliable.
Cantwell supported a Democratic budget alternative, which was not accepted, that provided adequate funding for our national responsibilities and an immediate tax cut to stimulate economic growth, while paying down the national debt.
Statement on FY2002 Budget Resolution Senator Maria Cantwell
Mr. President, I rise today to discuss the budget before us and to outline a few points that I believe need to be considered while we debate our national budget priorities.
There is no doubt that the focus of much of this week has been on the perceived need for, and the size of, a tax cut.I support efforts to provide hard—working families in my home state of Washington, and across the country, with tax relief. I expect Congress to take up legislation to eliminate the marriage penalty, provide estate tax relief, make college tuition tax deductible, and assist workers in saving for their retirement. In addition, I believe that comprehensive tax reform proposals must expand the Dependent Care Tax Credit to help families provide care for their children and expand the Earned Income Tax Credit to make it work better for more hard—working families.
However, I am concerned that we balance our efforts to cut taxes with our nation’s fiscal and policy responsibilities, and our obligation not to increase our national debt level.Comprehensive tax relief must be measured against the need to maintain fiscal discipline, and stimulate economic growth through continued federal investment in education, job training and infrastructure, while also protecting the environment. We also need to invest in our nation’s economic future by making a commitment to public research and development in science and technology —— maintaining our status as a global leader.And, it is critical that we meet the needs of the nation’s elderly and enact a meaningful prescription drug benefit for Medicare beneficiaries.
Furthermore, we must realize that much of the debate on the shape and size of tax cuts is dependent on the reliability of surplus projections that may or may not materialize.
These are the numbers at issue this week: The projected unified surplus over the next ten years is supposed to be $5.6 trillion. But what we need to be discussing is not this amount – but the amount of the non—Social Security, non—Medicare surplus. And when we take both of those trust funds off the budget line, we are left with $2.7 trillion over ten years with which to work.
It is critical that the funding levels in our budget guarantee that Americans have access to needed health care.We also need to invest in our children’s education by hiring more teachers, increasing teacher pay, providing enhanced training opportunities, and modernizing our educational system. And, we need to commit to programs that keep our citizens safe, and our environment clean.
We seem to be tripping over ourselves right now to spend a surplus – either on tax cuts or on increased discretionary spending – that, frankly, we are uncertain will even appear.As we all know, projections are notoriously inaccurate and, therefore, highly likely to be wrong even if they are only for the upcoming year.Based on its track record, the Congressional Budget Office says its surplus estimate for 2001 could be off in one direction or the other by $52 billion. By 2006, this figure could be off by $412 billion.
Remember that last year CBO projected that the ten—year surplus would be $3.2 trillion, $2.4 trillion less than the projection it released this past January. This means that in just one year the surplus estimate has increased by 75 percent.
In fact, CBO admits that it is most uncertain about projections for the years it forecasts the largest surpluses. CBO makes clear that $3.6 trillion of the $5.6 trillion unified surplus is open to question.
Besides debating surpluses that may or may not materialize, this budget process is the first step in outlining our nation’s fiscal priorities for the upcoming year. However, we must not forget that in addition to figuring ways to fund our political priorities, it is our duty to focus on meeting our national responsibilities.
And this is where my concern rests with the President’s budget. I believe that Congress can enact reasonable and responsible tax relief while fulfilling our nation’s responsibilities.
But it seems that the President is funding a $2.0 trillion tax cut at the expense of other programs.A tax cut this large would use 81 percent of the non—Social Security, non—Medicare surplus over the next 10 years, leaving the President and Congress $527 billion, or just 20 percent of the on—budget surpluses to address critical priorities such as additional debt reduction, expanding educational opportunities, providing a prescription drug benefit, keeping our environment safe, and ensuring a strong national defense.
In reviewing the President’s Budget Blueprint, I am concerned that his proposals shortchange important needs that Americans depend upon.
I find it remarkable, for example, that the President proposes to cut funding to the Energy Department by almost one billion dollars – in the midst of an energy crisis the likes of which our country hasn’t seen in years, if ever. I am particularly concerned that such a cut at the Department of Energy would be taken out of nuclear weapons facilities, particularly the Hanford Reservation in Washington State. This move would break the moral contract between the United States government and the people of Washington State – the moral obligation to protect the people from the hazards of nuclear waste. The Hanford clean—up is an ongoing federal responsibility and a timely clean—up is essential to the quality of our water and environment, as well as our public safety. To fall behind in the clean—up because of ill—advised funding cuts is an unacceptable risk. This is why I joined with Senator Crapo to introduce an amendment, adopted last night by voice vote, to ensure that the Atomic Energy Defense Account is increased by $1 billion in FY2002 for just this purpose.
I am also concerned about the President’s proposed budget for the Department of Health and Human Services.Although the President does increase funding for the DHHS by $2.8 billion, I see that he is increasing the National Institutes of Health by just that amount. If NIH is getting a $2.8 billion increase in the upcoming fiscal year, while its parent agency is only getting that amount as an overall increase, something else is going to be cut, or level funded.Are the cuts going to come from the Child Care Development Block Grant, funding to investigate child abuse and neglect, or services for our elderly?
The President proposes only $153 billion over 10 years to provide a low—income prescription drug benefit and finance overall Medicare reform. This is completely inadequate considering that over one—third of our nation’s elderly lack coverage for their prescription drug needs, that the average senior spends more that $1,100 on medications every year, and despite the fact that prescription drugs are today’s fastest growing segment of health care.
On Wednesday, the Senate adopted an amendment to increase the available funding for a new prescription drug benefit by up to $300 billion over 10 years. However, I think it is important to point out that this additional funding is coming from money already earmarked for the Medicare program, and from the broad cuts proposed by the President in other areas. .
While I have the floor I want to talk about two very specific cuts that the President has proposed.
Since 1997, the Federal Emergency Management Agency has spent $107 million to help communities to prepare for and mitigate the potentially calamitous consequences of natural disasters. This funding —— Project Impact —— helps communities plan and implement preventive measures in order to prevent large—scale destruction of property and human life. Yet, when the President released his budget he proposed canceling Project Impact because "it has not proven effective."
Well, I can tell you that the very same morning the President released his budget, my state was hit with a 6.8 earthquake, and, though there was extensive structural damage throughout the region, there were no deaths.And there is no doubt in anyone's mind, especially mine, that one of the main reasons this powerful quake did relatively little damage was because of the millions of dollars my state and our local communities have put into retrofitting buildings and preparing for such an event, dollars that were leveraged by Project Impact.For example, inspectors at Stevens elementary school in the Seattle school district following the earthquake revealed that a 300—gallon water tank directly above a classroom had broken free of its cables. The inspectors concluded that if it were not for a Project Impact retrofit project, the tank could have caused serious, potentially fatal injuries to children in the classroom, as well as significant property damage.
Mr. President, as I toured the communities in my state affected by the earthquake and spoke with local officials, I heard other examples, like this story of Stevens Elementary, that prove the effectiveness of the Project Impact program. By cutting funds for this vital program, we would be depriving cities throughout our country an opportunity to mitigate and possibly avert the potentially catastrophic consequences of natural disaster.
I am also concerned about the massive cuts proposed for the U.S. Export-Import Bank and the Overseas Private Investment Corporation.These two agencies are critical to maintaining U.S. competitiveness in the international economy through assistance programs that effectively increase U.S. exports and provides jobs to American workers.Although Ex-Im represents a minuscule fraction of the Federal budget, it provided $15 billion in export sales last year. The President’ s proposed 25 percent cut in Ex-Im bank would be a terrible mistake that could eliminate up to $4 billion in U.S. export sales.And OPIC, which over the past thirty years has generated $63.6 billion in U.S. exports and nearly 250,000 American jobs, ultimately operates at no net cost to U.S. taxpayers.Indeed, it actually returns money to the U.S. treasury and provides valuable assistance to U.S. companies seeking to invest and expand their operations abroad.
The support and funding of Ex-Im Bank and OPIC is a highly efficient way to increase U.S. competitiveness, especially for smaller companies exporting to higher-risk markets. The proposed cuts could be devastating to American companies and undermine our efforts to compete in the international economy.Mr. President, these programs should be de-politicized and their efforts to support U.S. exporters globally should be backed solidly by this chamber.
I know there are some in the Senate who support the President’s proposed $2.0 trillion tax cut as a means for stimulating the economy.But this proposal would do little toward this end.Ninety-five percent of the tax cuts in the President’s plan occur after 2003.By the time the tax cut takes full effect, the economy will have changed dramatically.These back-loaded tax cuts would do little to boost families’ spending power immediately, and therefore do little to spur the economy in the months ahead.And in fact, even the Chairman of the Federal Reserve Board, Alan Greenspan, has said tax initiatives historically have proved difficult to implement in a time frame in which recessions have developed and ended.
This tax cut doesn’t even go proportionally to every American.Forty-three percent of the benefits of the President’s tax plan are targeted to the wealthiest one percent of families – those with an average annual income over $915,000.Surprisingly, 25 percent of Washington’s working families and almost 400,000 of the children in Washington State would not get any benefit from the Bush tax plan.
Unfortunately, while relying on surpluses that may or may not appear, and funding a tax cut that goes disproportionately to the wealthiest families and is not interested in areas that will stimulated in long-term growth, the President’s budget eliminates funding to modernize aging schools, cuts maternal and child health programs, eliminates grants to hospitals and community health centers that serve uninsured and under-insured people, and cuts job training and employment services.
>Responsible budgeting is a give-and-take.The country is at a critical juncture in setting our fiscal priorities:our choices are maintaining our fiscal discipline and investing in long-term growth the nation’s future education, job training and health care needs, or cutting the very services used daily by our citizens.I believe our budget must fund these critical priorities as well as allow for responsible tax relief.Unfortunately, however, the budget before us today does not do this.
Thank you, Mr. President, I yield the floor.