Jon Kyl

Mr. KYL

Mr. KYL. Mr. President, I ask unanimous consent the order for the quorum call be rescinded.

Mr. KYL

Mr. KYL. Mr. President, I want to speak for a moment about our hope that in the so-called stimulus package that will be the subject of a conference committee between the Members of the Senate and the House of Representatives, significant changes can be made, changes that will permit more people to support this package than only those who have supported it in the past. I want to begin by identifying the two key areas that most Republicans have concerns with in this package and begin by noting that it is not a choice between doing nothing on the one hand and doing only this bill on the other hand. I think it has been presented by some as a false choice. The President, for example, last night said: Now, there are those who would do nothing about this crisis. I don't know of anybody who wants to do nothing. Certainly, all of my Republican colleagues have voted for doing lots of things. This past week there were many amendments about doing various things to address this problem, and Republicans voted for a lot of them and Democrats voted for a lot of others. So it is not the case that there are those who want to do nothing. That presents a false choice. The fact is, there are those who want to do this particular bill, and there are those who would do things somewhat differently because they have legitimate and strong differences about what the effect of this bill will be. That is why I hope there could be changes made in the conference committee when the bill is to some extent rewritten. There are two key things that Republicans, as I said, have focused on that we would like to change. The first is, we believe the bill spends far too much money; second, that it doesn't do enough good, that is to say it doesn't do enough to stimulate the economy--to create jobs, for example. On the spending too much money part, we have seen that the so-called deal that was struck in the Senate now, according to the majority leader just a few moments ago, is up to $840 billion. CBO scored it at a little under $839 billion. That is substantially above the House- passed bill. The question is, Is the cost of this bill going to increase even more when the bill goes to conference committee, and is all of that spending necessary? The President had spoken about stripping the earmarks from the bill. Frankly, I had thought, because earmarks can be somewhat embarrassing and we can achieve the objectives without having individual earmarks by individual Congressmen in the bill--the President had been rightly critical of that process as well--I had thought they would be stripped out by now. It turns out there are pages of specific earmarks still in the legislation. These are the kinds of things I hope the conference committee would strike. Let me just highlight a few. Some of these earmarks could well create jobs. But I submit, if one Senator or one Congressman gets to have the special project in his State slipped into this bill, that maybe each of us could identify something in our own State that we were pretty sure would create jobs and we could put it in the bill. That is the problem with earmarks. All Senators are equal except some are more equal than others when it comes to slipping things in bills. So it could well be that some of the earmarks are job creators, but shouldn't they go through the regular process where these projects are vetted by the Appropriations Committee? They set the priorities, some make it through, some do not make it through, but at least they all fall within the budgeted amount. Since all of the spending in this bill is emergency spending; that is to say, it is not paid for in tax revenues or offset by spending reductions, it is all borrowed money. I think we need to be careful about how the money is spent. Others of the earmarks are dubious in terms of job creation. These are projects that may well be worthwhile, but it is hard to imagine they would create very many jobs, and it seems to me they clearly fall into the category of bills that should be considered in the regular appropriations process. Having run for election now several times and having looked at polls and tried to understand what my constituents think and what most Americans think, I have reached some conclusions. Americans do not mind paying their fair share of taxes. They don't like it; they like to have their taxes cut, but they are willing to pay what they think is necessary to support Government. And they believe a certain amount of Government spending is necessary. They all understand why Government needs to spend money on certain things. What drives them crazy is wasteful Washington spending, when their hard-earned money comes back and they think we do not spend it right. By the way, they have an idea that a lot of what we do ends up being wasted, maybe even more than what we actually do, but because of their concerns about that I would think we would be especially careful in a bill that spends over $1 trillion to be careful we don't waste money. The Congressional Budget Office has said it is very difficult to spend the kind of money we are talking about in the relatively short timeframe we are talking about without wasting a lot of it. It is a phenomenon we are all well aware of here. When you try to spend a lot of money in a short period of time, you are going to waste money. Our constituents instinctively appreciate that. So it seems to people that in order for this legislation to have credibility, we can at least start by excising those matters that may be good projects in and of themselves, may actually in some cases create jobs, but are clearly earmarks or special interest projects that should go through the regular appropriations process. I don't mean to pick on anybody or anything in particular, but let me just mention a few of these. There is a $2 billion earmark for a powerplant in Mattoon, IL. If this is actually the building of a powerplant, depending on how soon it could be built, that might create jobs. If it is a typical powerplant, it is going to be a long time in construction, so it is probably not really stimulative right now. But that is an earmark. There is $200 million in the bill for workplace safety in the Department of Agriculture facilities. I have not been told how that is going to create jobs. There is $200 million for public computer centers at community colleges and libraries. It sounds like a good idea. I just don't understand how it is going to create a lot of jobs. We have been critical of this all along. The transition to digital television has taken longer than anticipated so the Government has come up with the bright idea that we will spend $650 million in giving people coupons so they can transition from their existing television set to DTV. Maybe that is a good deal. I would rather that one go through the appropriations process. I am not sure I would vote for that, but that is not a job creator. Here is one I like, $10 million to fight Mexican gunrunners. I don't know who is doing the fighting. Maybe we would have to hire them and create some jobs. It doesn't belong in a stimulus bill. There is $10 million for urban canals. It may be a good idea. Who knows? And $198 million to design and furnish the DHS headquarters--quite possibly they need to spruce up the headquarters at DHS. Maybe some jobs would be created in the process, but we are not told in this bill. This is a very specific earmarked item. There is $500 million for State and local fire offices, and I can tell you, and I know the Presiding Officer would agree, everybody would like to have money to build a fire station. There is always another fire station to be built, especially in my State where we have a lot of growth. That is something normally we would pay for ourselves, and I am not sure why someone in Vermont should pay for a fire station in Arizona. In any event it doesn't belong in this bill, it seems to me. In terms of job creation, I find it interesting that we are going to spend $160 million for volunteers--these are not people who are paid, these are volunteers--at the Corporation for National and Community Service. As I said, there are many more we could talk about, and I do not mean to pick anybody out and pick on anyone. The bottom line is when you are spending $1 trillion and you are bound to waste a lot of it--at least that part which has been identified as earmarks, you ought to be able to get that out, at least. That is something that can be accomplished in this conference committee. I also noted it is not just a matter of the amount of money and the fact that a lot of it is wasted, but the fact that we believe it will not be efficient and effective at creating jobs. Why is that? Here is a good statistic to keep in mind. We all know if the object is to create jobs, we might want to start with those entities that create most of the jobs in the country. Small businesses in the United States of America create about 80 percent of the jobs. So you would think that naturally there would be a lot of money in this stimulus package to help small businesses create jobs. Right? No, actually, not right. Eight-tenths of 1 percent of the--it is a tax title of the bill that can actually go to small businesses to help them hire people, help them buy equipment and so on which would require them to hire more people--eight-tenths of 1 percent is dedicated to small businesses. So the very group of people who are the quickest at creating jobs--big businesses are still laying people off when small businesses, one by one around the country, are starting to hire people. Small businesses cumulatively account for a far greater percentage of employment than our big businesses do. If you look at the businesses with under 500 employees, you find that obviously those, the small businesses--and most of them have less than 200 employees--as I say, those are the businesses that could really create the jobs in this country. Republicans had an idea, a plan to reduce their tax rate just by 7 percentage points, similar to the way we did it for manufacturing corporations a few years ago. We believed that would help them hire more people. You would think that for the group that hires 80 percent of the workers, we could find a way to provide a little bit more help to in the legislation. Sadly, that is not the case. If you take all businesses combined, less than 3 percent of the funding in the legislation provides some kind of tax deduction or credit or benefit which would enable them, then, to hire more people. In terms of the legislation to create jobs, we do not think it is approaching the subject in the right way. One of my colleagues said $1 trillion is a terrible thing to waste. That is kind of catchy, but he went on to make an important point. I think of this because this morning on television I heard several people saying: Sure, this is a gamble. No one knows for sure whether it is going to work. Newscasters obviously asked proponents, can you guarantee this is going to work. No, nobody can guarantee it is going to work, and I don't hold anybody to that standard. Proponents don't have to guarantee this is going to work. But if we were spending $2 or $300 million, I would say: If it is a gamble and you think you can roll the dice and this might work, take a shot. But we are talking about over $1 trillion of borrowed money. When you are gambling that much, you cannot afford to be wrong. Let's assume that it is only half wrong. The effect of a $500 billion mistake is horrendous on the economy in the medium and longer term. CBO, in scoring the legislation, actually says there will be a short- term stimulus. But they also say in the long-term, talking 10 years, there will be a reduction in gross domestic product of between 1 and 1.3 percent because of the crowdout effect of investment. There is so much Federal Government money being absorbed into the borrowing market, as a result of putting a trillion dollars in borrowed money out there, that it crowds out private investment. That will have a negative impact on GDP. We know in advance the amount of money we are talking about will have a detrimental effect on GDP. If we are wrong about the positive benefits of the legislation, it could have a very detrimental effect. That is not even to discuss the impact on the value of the dollar and the value of U.S. debt that other countries have in the past been willing to buy but in the future may well not be willing to buy. In that event, this becomes a much more expensive proposition for the taxpayer. It is for my children and my grandchildren and all the rest of the younger generation who will have to suffer the consequences of that borrowing, either through a lower standard of living, a lower GDP or increased taxes or inflation that robs everybody of what they earn and is particularly tough on people who are retired and have relied on savings for their livelihood. The impacts of being wrong could be significant. It isn't the case that just because we spend money, it is a good thing, that just because we spend money, jobs will be created. Some will, no question. Some will be saved. But is it the most efficient and effective way to do it when you are talking about this much money? We should not be willing to just throw the dice and hope that we don't make a mistake. I urge my colleagues, those who will be participating in the conference committee, to recall the words of one of the people who was involved in the compromise legislation, who criticized the House bill as a Christmas tree upon which every Member had virtually his or her favorite project. It was bloated, expensive, and ineffective. Those were her words. She is correct. That was the House bill at $827 billion. The Senate bill is now $839 billion, more than the House bill. The earmarks are still in there. The inefficiencies are still there. The wasteful spending is still there. At some point if this bill is going to be improved, all of that has to come out. I challenge those who will be in the conference committee: Be brave, be courageous. Don't feel you have to stick with what passed the House or Senate. Consider what the President said originally with respect to how this legislation should be created and be willing to improve on it. You will not only do something the American people will very much appreciate, you will be doing something good for the country and certainly for future generations. I urge my colleagues to consider strongly the Republican suggestions. Because at the end of the day, it is not a choice between doing nothing and only this bill. A billion dollars a page is spent in this bill. Surely, there are ways to improve it. For anyone who says this is a choice between those who want to do nothing and those who support this legislation, no, that is not true. It is a choice between those of us who want to do this intelligently and those who have a challenge in front of them as to whether they want to improve the bill. I hope they will join some of us in trying to see to it that this legislation is less expensive, less wasteful, more efficient, and will actually stimulate the economy. I suggest the absence of a quorum.

Mr. KYL

Mr. KYL. The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).

Mr. KYL. The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).

Mr. KYL

Mr. KYL. Madam President, I am going to speak both about the general approach to the so-called stimulus package, as well as the deal reached at the end of last week that we will be voting on at 5:30 this afternoon. First, let me say you can usually tell when proponents of an idea don't have good arguments for their proposition. They generally set up a false premise, what is sometimes called a ``strawman.'' It goes like this: We can't just sit here and do nothing. I ask anyone here, has anybody in this Chamber said we have to do nothing in the face of this crisis? No. Everyone who has spoken on both sides has said we have to do something. Has anybody here said we need to slow down and not act with alacrity because there is no problem or real emergency facing us? No. I think everybody has said we have a real problem in this country, people are hurting, and we have to do something as quickly as we can. It is not a choice between doing nothing or doing something. It is not a choice between acting quickly or taking our sweet old time at it. There is a legitimate difference of opinion. One reason we have liberals and conservatives and Democrats and Republicans is we have people in this country who are smart and very patriotic, but they disagree about the best way to proceed ahead in various situations, including the crisis we are in right now. So let's don't denigrate the arguments of the other side. I respect what my colleagues are saying. They believe spending a lot of money in the way they are doing it is the right way to go forward. As the President has said: What do you think a stimulus bill is except a spending bill? I understand what he means. If you spend a lot of money, the theory goes, jobs will be created and that will stimulate the economy. But the original test he and others in his administration set forth was a little more precise than that. It was the correct test, put forth by Larry Summers, who said they are going to be choosing investments ``strategically based on what yields the highest rate of return for our economy.'' That is the right approach, not just spending for spending's sake; not just throwing a lot of money at the wall and seeing what sticks but targeting investments to see what really works. Unfortunately, that is not what has been done here. Let me give you one example. In the debate we had after the deal was announced by the Senators who went off and negotiated some reductions in the original bill, there was the comment made that the House bill was just a Christmas tree--I will quote it: It was a Christmas tree upon which every member virtually had his or her favorite project. It was bloated, expensive, and ineffective. That was the criticism of the House bill. Now, the deal struck by these Senators reduced some of the spending in various parts of the Senate bill. But it turns out that the final product is actually $7 billion more than the House bill they just criticized. So even though they cut some money at the margins, the various pieces of the bill, because of other things that were added in the Senate which they didn't cut, the total Senate bill is even more than the House bill. I ask, is this money really targeted? One of the things one of the authors of this deal said made it a good deal was they added $14 billion in Pell grants. Now, Pell grants are the money that each year the Appropriations Committee appropriates so that students can get a grant from the U.S. Government to go to college. We do it every year. It is a good program. People love to take advantage of it. It has never been viewed as a stimulus package. That money is appropriated every year through the regular appropriations process. But we have added $14 billion in Pell grants. Pell grants means students who graduate from high school can go to college. They are not getting a job; they are not going out into the workplace. The teachers teaching them already have jobs teaching. I don't know where the jobs are created here. My point is twofold. It is a worthwhile program. We do it every year as part of the regular appropriations process. Why is it included in this bill as if it is going to stimulate something, as if it will create new jobs? It is not a stimulus. We do it every year. It is not a targeted investment strategically based on what yields the highest rate of return from the economy. It is sending kids to college, which is, of course, a good thing, but it should not be part of the stimulus package. The stimulus package, with regard to spending, is supposed to identify those things that will require a lot of people to go to work and, therefore, get hired on to do jobs. But this is an example of the kind of thing that isn't targeted strategically to achieve that objective. Another item was $6 billion for special education. Special education is a good thing. We appropriate money for it every year in the regular appropriations process. Why is it in this bill? Emergency spending? You don't have to offset it with spending reductions somewhere else or tax increases. It goes right to the bottom line of the deficit. It doesn't have to compete with anything else. As far as I know, you don't have a lot of special education teachers who are unemployed today. As a matter of fact, in education and health care you have the lowest unemployment rates in the country, around 2 to 3 percent. What is the targeted nature of this? It turns out these are things the people in the room making the deal were all for. They wanted to make sure these programs got funded well this year, so they stuck them in the bill. This is not targeted. It is not stimulative, for the most part. It is just money we think would be a good idea to spend. So a bill that was intended to encourage economic growth originally by investing in high-return projects has turned into a wild spending spree that is out of proportion and reason and won't achieve the objective it was intended for. In the process, it is going to cause tremendous waste. CBO noted that Government agencies don't have the ability to spend this kind of money quickly and efficiently. They are asking them to spend a lot of money quickly. That, obviously, results in a lot of waste. Even so, the reality is, they cannot spend that much money, as it turns out. In fact, less than half of the discretionary money of the kind I just identified will be spent before 2011--less than half. So more than half of the money we will start spending in 2011 and beyond. I hope the recession is over by 2011. So by that definition, over half of the money doesn't go to stimulate the economy and create jobs. It is ongoing, more permanent spending. We actually create around 30 new Federal programs in this bill and over $180 billion in mandatory or permanent spending. So it is not targeted for stimulative relief in the short run. Now, one of my colleagues said we should acknowledge requiring 60 votes, as if that is somehow wrong, and Republicans are filibustering the bill. Let's understand we started debating this bill about 1 week ago. We are spending more money than we have ever spent in a piece of legislation in the history of the United States of America, and we have only spent 1 week at it, and the critical vote is at 5:30 tonight--1 week after we started the debate. That is hardly filibustering. That is a point on which we don't need to spend any further time. There are still so many things in the bill that are wasteful. Time doesn't permit getting into all of it. Let me note some of the things we had talked about originally that I thought at least the people who made this deal would want to cut to avoid embarrassment. It appears that these things are in the bill: transition to digital TV. I am not sure how that creates jobs. There is another $300 million for Federal Government cars. That may help the auto companies. There is money for Amtrak. There is $1 billion for the census. There are green cards for the military. There are Filipino veterans of World War II in the Philippines. As I said, none of these things create jobs. They may be good ideas. Let them compete through the regular appropriations process and see how many would actually get through that process and what the priority would be. About a year ago, Amity Shlaes, a historian, wrote a book called ``The Forgotten Man'' about the Great Depression. The title was used for two reasons. It is a phrase Franklin Delano Roosevelt used in one of his speeches kicking off one of his programs. It actually was borrowed from another person who was referring to, in today's terms, the ``little guy'' in our economy who bears the burden in our economy, who lives and plays by the rules and works hard and ends up paying the taxes on which everybody else relies. That is who the real forgotten man was at that time. I think there are a couple of forgotten groups of people here too. The first are the small businesses. I note about three-tenths of the total package is dedicated to small business relief. Yet small businesses create 80 percent of all new jobs. This is supposed to be a job creation bill. Think about that. Small businesses create 80 percent of the jobs, so you would think a good piece of the relief would go to small business. No, it is just three-tenths of 1 percent. They are the forgotten folks. The other group of forgotten folks includes our children and our grandchildren. I have two grandchildren, one whose birthday was yesterday and one whose is today. I cannot believe how fast they are growing up. I think about the legacy we are going to leave them in terms of all of this debt. It is very clear, from the CBO and all the others who have examined this that this $1 trillion is going right to our deficit. We are going from a $1 trillion deficit to a $2 trillion deficit next year. Eventually, of course, the debt has to be paid back. Other countries are buying much of the debt. When they say: We want our money back, Americans have to do one of two things: produce their way out of the debt; that is to say, have such a robust economy that it is producing a lot of tax revenue to pay the debt back or, inevitably, there will be a tax increase. Unfortunately, because of the effects of this bill, according to CBO, after 10 years there will be negative economic growth; that is to say, minus one- to three-tenths of a percent of negative growth over what it would have been. We cannot count on growth to lift us out of the economic situation we will be in. They say it is a little like a sugar high. We may get stimulus right away, and like when you have the sugar high, you then crash. So they are talking about .1 to .3 percent decline in GDP. Obviously, we cannot count on economic growth to produce the revenue to pay back the people who bought the debt. That could mean a tax increase. That would be a very bad thing to leave these kids and grandkids I love as part of what I did on my watch, to say we spent the money today so they could pay it back later. All I am saying is, we need to be much more careful about what we are doing. If we were talking about $200 million or $300 million, I would say we can take a chance; that it is a lot of money, but let's see if it works. Nobody knows for sure whether this will work. Anybody who says they know this will work, you can believe one thing: They are not telling you the truth. Nobody knows. But to spend $1 trillion and not know whether it is going to work is very bothersome. One of my colleagues said a trillion dollars is a terrible thing to waste. I don't think we would be wasting $1 trillion. A lot of this will actually build something we can use later, so it is not all going to be wasted. As CBO said, you cannot spend this much without wasting a bunch of money. Since most of it is not targeted to job creations, for reasons I mentioned, even though it may produce some result later on, the question has to be asked: Is it worth the expenditure now, in view of the crowdout effect in the private economy? Every dollar we spend is money that is crowded out in the private sector which, at the end of the day, is what creates jobs. Looking at that three-tenths of 1 percent for small business is illustrative of the point. Small business creates 80 percent of the jobs in the country. You would think we would be focused on small businesses if we are talking about spending money in this bill to get job creation. Yet only three-tenths of 1 percent goes to small business. Our point is, we are not being wise in the way we are spending this money, that we should be much more wise and that the deal that was struck last weekend to get the votes to pass the bill does nothing more than shave off some of the money at the top but does not fundamentally attack the problem I believe should be attacked. For that reason, I hope my colleagues will reconsider, and when we have this vote in about 3 hours, that they will consider the possibility that we could do better, that we could do better by making more modifications to this bill than were done in the so-called deal that was struck last weekend. Hopefully, if they vote no, we will have the opportunity to go back and do that. If we don't, we are on this slippery slope to spend $1 trillion to an uncertain outcome, except we know we eventually will have negative growth and a lot of waste to show for our efforts.

Mr. KYL. The following Senators are necessarily absent: the Senator from New Hampshire (Mr. Gregg) and the Senator from Texas (Mr. Cornyn). Further, if present and voting, the Senator from Texas (Mr. Cornyn) would have voted ``nay.''

Mr. KYL

Mr. KYL. I am happy to conclude and let Senators respond on their own time.

Mr KYL

Mr KYL. Mr. President, I appreciate the opportunity to engage with my colleague from Massachusetts. I will make five quick points, and then either Senator Sessions will follow me or, if a Member on the other side wishes to speak in between, he will then follow that individual. First let me clear up two things. The Senator from Massachusetts talked about deficits and, in effect, blamed the Bush administration. I would note the facts which are that last year, under a Democratic-controlled Congress, the deficit doubled from what it was when Republicans were in control, and it is going to double again this year under Democratic control of Congress.

Mr. KYL

Mr. KYL. Let me try to make my points. I don't want to take less time from my colleagues. Secondly, I acknowledge that the Senator from Massachusetts did raise the issue of housing at the White House. The point I wanted to make was not that Democrats and Republicans weren't both concerned, that Democrats didn't have some good ideas. Simply, it is not fair to characterize the Republican position as wanting to deal with tax relief only, that Republicans believe housing needs to be a part of this. In fact, we would prefer to fix housing first rather than, as the Senator from Massachusetts said, we are going to do housing later. Incidentally, the bill to supposedly fix housing passed last June with both Democratic and Republican support. It was obviously not enough. Third, the Senator from Massachusetts talked about debt and said, what is the alternative to borrowing, either raise taxes or cut spending. That is true. But he said you can't do either in a recession. Actually, that is not true. As I quoted before, the National Bureau of Economic Research said this about that precise point: The best fiscal policy to stimulate the economy is a deficit-financed tax cut. The long-term costs of fiscal expansion through government spending are probably greater than the short-term gains. As between the two, some spending can help. But long-term, it costs more if you have deficit spending, and it provides for relief if you have tax cuts financed through deficit. The fourth point: My colleague from Massachusetts disagreed that this legislation will result in a recession and noted that the CBO report said there would be short-term stimulus. That is exactly right. But what I said is also true. On page 5: Including the effects of both crowding out of private investment, which would reduce output in the long run, and possibly productive government investment, which could increase output, CBO estimates that by 2019, the Senate legislation would reduce GDP by between one-tenth and three- tenths of a percent. As I noted, the definition of a recession is when you have two consecutive quarters of negative GDP. Finally--and this is probably the most instructive point of all-- there is a clear difference between the parties. But I think it is interesting when my colleague from Massachusetts described as one of the failed ideologies of the past the notion that individual empowerment will do any good, when he ridiculed the idea of letting people keep more of their own money. You have a very stark contrast between what some Democrats believe and what most Republicans believe. Republicans do believe that Americans are better off being allowed to keep more of their money. Why? Because they will make wiser decisions about what their family needs than will some bureaucrat in Washington. I don't mean bureaucrat in a pejorative way. I am a government employee. I didn't get any smarter when I came back to Washington. When I go back to Phoenix or Tucson, I see people struggling to take care of their families, and they are making very important and wise decisions about how to deal with their family budgets. It is true, if they get a tax rebate, they are more likely to save it or pay off credit card debt than to spend it. That is why that kind of tax relief, a rebate, the quick fix that is in this bill, doesn't work. Why? Because Americans make wise decisions with their own money. They know they have to deleverage their own personal budgets, as businesses know they have to deleverage all of their debt.

Mr. KYL. Let me conclude my remarks. Republicans believe that individuals are better off in making decisions about their financial future than allowing the government to do it for them. That is why we say, as Michael Steele said, let people keep more of their own money and not have people in Washington decide what is best for them in how they want to spend it.

Mr. KYL. Mr. President, I would say to my colleague from Massachusetts, I certainly think that would be a good way to engage in this debate. There are at least four speakers on our side who would like to engage in this discussion today, possibly one other. We could start, if it would be acceptable to you, and then the Democratic side respond and simply go back and forth in that way, with the time being divided equally.

Mr. KYL. Mr. President, it would be my intention not to take more than about 20 minutes. That would certainly then permit the kind of discussion the Senator is suggesting.

Mr. KYL. Mr. President, I think one of the reasons President Obama has not had an easy time getting Republicans to support his stabilization program is because he has misrepresented the Republican approach to this problem, and obviously that is of concern to us. In discussing with the American people his approach to the stimulus of our economy, he has first used some dangerous words, I would say, in describing the emergency nature of this. A lot of people have said he is trying to scare the American people. I don't think that is true. I think what he is trying to do is demonstrate the seriousness of the situation. But I also believe it is not an excuse for acting in an inappropriate way, to say we have to do something right now, and if we don't, there is going to be catastrophe in the land; therefore, suggesting we need to be less careful about what we do. We believe the President's initial conversations are appropriate and that we need to be careful about how we approach this problem, among other things, because of what could occur over the long term. He has also mistakenly represented the point of view of Republicans in two specific ways: First of all, suggesting the only reason Republicans oppose this program is because we just believe in tax relief. Of course, we believe in tax relief, but we do not believe that is the only solution to this problem. In fact, we understand there has to be a component that helps people in need, such as the extension of unemployment benefits. We understand that certain kinds of spending can be very effective at a time such as this. Senator McCain specifically noted some military spending. Because of the way the military operates, they can get the money out the door quickly, and that can be very beneficial. We also focused, first, on housing because that is where this problem began, and that is why our effort to fix housing first was presented on the Senate floor. Our Democratic colleagues rejected that notion. Of course, we also demonstrated why some tax relief can also be beneficial. But we have never said that only tax relief will work. Our Democratic colleagues like to point out a very high percentage of their bill is tax relief, apparently agreeing with us that tax relief is important. But the two biggest pieces of tax relief in the Democratic bill are, first of all, the rebate program, such as the rebate program last year. Last year, it was $600; this year, it is $500 for 2 years. It was not effective last year, and there is nothing to go suggest it is going to be any more effective this year to stimulate the economy. The other part that is discussed is the alternative minimum tax relief--so-called AMT. Now, we have been relieving Americans from having to pay the AMT for a decade and not as part of a stimulus bill but because it is the right thing to do. No one ever intended that Americans below the millionaire status would ever be paying the alternative minimum tax. So we have been fixing that each year so Americans would not have to worry about it. It doesn't do to count that as part of the tax relief and suggest it is because of a stimulus intention. The other thing the President has spoken of that bothers Republicans is talking about the ``tired ideologies'' that got us into this problem in the first place. Now, if you are going to try to get some bipartisan support from Republicans, I submit that is not the way to do it. I would like to know exactly what tired ideologies the President is talking about. What exactly? Now, in his inaugural speech, I think the President hit a couple of home runs. He talked about ``reaffirming the greatness of our Nation.'' He said: It has been the risk-takers, the doers, the makers of things . . . who have carried us up the long, rugged path toward prosperity and freedom. He talked about requiring a new ``era of responsibility,'' and emphasized the values of honesty and hard work. Now, those are values that are very important to Republicans. We believe that, for example, we should have a Tax Code and Government regulatory policy that at least does not punish those who are risk- takers and doers, who have exercised responsibility and who have helped to make this Nation what it is, including many of the people who work hard and who run the businesses that create the bulk of the jobs in this country. So what exactly is it the President is talking about when he talks about the tired ideologies of the past and responsibility? There is much talk in this bill of all the aid to the States. Now, the States have doubled their spending in the last 5 years, and most acknowledge they need to get their fiscal houses in order, but many of them are simply looking forward to being bailed out by this bill. So I ask: Is that the kind of responsibility we want to foster or should we expect more of the States so they can do their part in dealing with this crisis? Does the President believe the tax cuts of 2003 created the recession? Obviously, no one believes that. Not only were they not responsible for the recession we are in, but they are accredited with the job growth and economic stimulus this country received during the middle part of this last decade. Does the President believe President Bush's efforts to control Fannie Mae and Freddie Mac's risky investments and toxic loans caused the pickle we are in right now? Obviously not. Indeed, all the evidence is, it was the President's cohorts in the Congress who stopped the efforts to control Fannie and Freddie and, as a result, this great housing bubble was created and burst, to the detriment of everybody in the country. Would the President suggest the Reinvestment Act might have had something to do with it? There is a failed policy of the past, essentially making the banks lend money to people who actually couldn't afford it. In the long run, they suffered as much as everyone else because they couldn't carry the mortgages on the homes they were put in. We did not do them a favor, and we didn't do their neighbors a favor, who are now sitting next to a home that is in foreclosure. It seems to me the President is rather casually throwing out some careless language, and if we would be a little more precise and try to get together as Republicans and Democrats to identify the problem and work together on it, we would get a lot further. Let me ask this question. If the question were put to the Senate today: If you knew that a bill in the Senate was going to cause a recession in 10 years, would you support it? Well, that is what the Congressional Budget Office--the bipartisan office that supports our efforts in the Congress--says about this legislation; that there will be negative economic growth--negative GDP--in a decade as a result of this legislation. According to the CBO report, dated February 4, sent to Judd Gregg, the ranking member of the Committee on the Budget, they say: CBO estimates that by 2019 the Senate legislation would reduce GDP by 0.1 percent to 0.3 percent. Now, that is 10 years from now. That means if this went on for at least two quarters, that is the definition of a recession. They note in the very beginning that the effects of the legislation would diminish rapidly after 2010 and that in the long term, GDP will be reduced. If you have a bill before you that you are told by the experts is going to result in a recession, would you maybe want to stop and think twice about what you are doing? There is evidence that this is kind of a sugar high. We put a lot of spending out now, but once the high is gone and you crash, you are going to be in a recession. That, in effect, is what is stated here. Just as we do not let our kids have too much candy, I think we need to be a little careful about legislation which we are told is going to result in a recession. It is not just the CBO. In December 2008, the National Bureau of Economic Research published a document titled ``What are the Effects of Fiscal Policy Shocks?'' by Andrew Mountford of the University of London and Harald Uhlig. I am quoting: The best fiscal policy to stimulate the economy is a deficit-financed tax cut [and] the long-term costs of fiscal expansion through government spending are probably greater than the short-term gains. In other words, in effect confirming what the CBO has said. They explain why: [That's because] government spending shocks crowd out both residential and non-residential investment-- By the way, the CBO report I cited does talk about the increase in the national debt crowding out private investment with the same negative effect-- while the [positive] response of consumption is small and only significantly different from zero on impact. But suppose these recent studies were mistaken, I suggest, and the spending spree would even work as advertised. We are still left with the number of jobs allegedly to be created at a very significant cost, well over a quarter million dollars per job. The bottom line here is that doing something temporary which is going to cost a lot of money and result in long-term economic downturn is not the kind of policies we should be pursuing. One of the concerns Republicans have had is that it is not only the amount of money that is being spent in this bill--and it is a shocker. It is over $1 trillion. And incidentally, the deal that was reached yesterday still has us spending something like $1.17 trillion, so this is still a very big spending bill. By the way, the President acknowledged it is a spending bill. He said that is the whole point. One of the problems with that is that you cannot fix it by simply shaving a little bit off of some of the elements of spending, as this deal apparently does. You have to start fundamentally at the bottom. Actually, Larry Summers, who is the chief economic adviser of the President, had it right when he says this of legislation: ``The investments,'' he says, ``will be chosen strategically based on what yields the highest rate of return for the economy.'' That is the way it should be done, built from the bottom up based only on what actually does the most good rather than simply throwing a lot of spending at the problem and hoping that some of it sticks or actually trickles down and actually helps the American people. This legislation, the so-called deal here, doesn't build it from the bottom up. It takes the base bill and just shaves some off different pieces of it. I would note that we do not have text of the legislation yet, so we are dealing with a couple of different press releases, which, by the way, don't identify who put them out, and they are slightly different with respect to what they say. So when we are discussing this deal, we still do not know what it is. This is Saturday. We are supposed to vote on this on Monday. Obviously, we are not going to be here tomorrow. Is this a way to legislate over $1 trillion of spending that is going to be a burden on our children and grandchildren? I think not. I think the authors of this legislation owe us a little more consideration in getting the facts to us about what the bill actually does. As I said, the two big tax pieces are the AMT relief--which we have done routinely each year, not as part of a stimulus but because it is the right thing to do--and the rebate part, which we know did not work last time, and there is no reason to believe it is going to work this time. There is only about 2.5 percent of the tax part of the bill which actually goes to business tax relief, potentially enabling businesses to create jobs--for example, allowing them to write off purchases of equipment earlier than they otherwise would, therefore incentivizing them to hire people and thereby, obviously, creating jobs. That is the tax part of this. On the spending side, we are told that there are certain reductions in certain of the accounts. But, as we look through it, many of the things that were criticized before appear to still be there. If you take what was added on the Senate floor to the deal that was struck, you are at about $827 billion, which is still above the level of the House bill which was criticized strongly by proponents of the deal last evening on the floor. They called the House bill a Christmas tree. Yet this bill in its total amount is above the level of the House bill. There may have been a 4.7-percent reduction from the level of spending in the House bill, but it obviously doesn't change it from being a Christmas tree. It has not been fundamentally altered from the bottom up with an effort to invest in things that actually will stimulate jobs. It simply shaved off some of the excess spending in the bill. For example, as we understand it, in the building account, the Federal building account for Federal buildings, the Senate bill had a $6 billion amount. Under this deal that was made, it is $2.5 billion. So some money was shaved off there. The NOAA facilities construction went down from $795 million to $645 million, a $150 million savings. That is great, but the fundamental problem is that this is not going to create jobs--that remains. Federal auto fleet--they cut that in half, the cars for Government workers, from $600 million to $300 million. The DC sewer system remained unchanged. They didn't actually cut, that I see. The bottom line, as my colleague from Maine described on the floor, these are the kinds of things that should go through the regular appropriations process where they should compete with other worthy causes, going through the appropriations process and the appropriators make the tough decisions. My colleague, who is a member on the committee, had a couple of things to say in describing the appropriations process. He pointed out that we have the responsibility to be deliberate and consider these items carefully in the context of the President's formal budget request. Why? Because there are so many worthy things to spend money on that it is our job to make the tough decisions about which ones to put at the top of the list and which ones, perhaps, to defer or to reduce. That is the job these people on the Appropriations Committee do, and they do it well. They have to stick with the President's budget. What is in this bill is new spending without any kind of tax receipts to cover it or offset spending to make up for it. It is emergency legislation, just added to the debt. As the ranking member of the Appropriations Committee wisely pointed out, the kinds of projects that are in this bill should go through the appropriations process. It is great that they have been reduced somewhat in number, but that does not solve the fundamental problem. Let me close here so we can actually engage in this debate. We still do not know whether a lot of the earmarks are in the legislation. My staff has tried to look. It appears, because they have not specifically been taken out, that several of the items, some of the items I mentioned-- the money for Amtrak, the $1 billion for the census, the new money for the Smithsonian, digital television transmission bailout, the authorization for benefits for Filipino veterans of World War II--all of those things and much more are still in here. Obviously, we will be interested to see whether the final version of the bill, when we actually get it, corrects these deficiencies, but it doesn't appear that they have. Again, what Republicans are suggesting here is that it is really a four-part process: help those who are in need; target the spending, which will actually create jobs; fix housing first; and provide targeted tax relief that will actually also help to stimulate the economy. That is the Republican approach. I think we have some better ideas that could have been incorporated into this legislation if it had not been such a partisan exercise.

Mr. KYL. Mr. President, I have finished what I have to say. My colleague Senator Sessions asked if I would respond to Senator Kerry, because he responded directly to me. He will follow next. There is no rule that says a Senator can't speak twice. Other Senators will rotate in time. I think that is the appropriate way to engage in the debate.

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from New Hampshire (Mr. Gregg) and the Senator from Texas (Mrs. Hutchison).

Mr. KYL. Mr. President, am I correct that the Vitter amendment No. 107 is the next amendment?

Mr. KYL. The following Senators are necessarily absent: the Senator from New Hampshire (Mr. Gregg) and the Senator from Texas (Mrs. Hutchison).

Mr. KYL. Thank you, Mr. President. Mr. President, first, everyone understands we need to act to help people who are hurting in this country, to try to create jobs and stimulate the economy. That is not the issue. The question is whether the deal that has been struck here this afternoon is a solution to the problem or whether it is still a wasteful and ineffective bill. I wish to comment briefly on five quick things. First of all, it is a little hard to tell because we do not have text yet, but my staff has just reconfirmed the numbers, that as compared with the House-passed bill--which was described here this evening as a very bad bill--this bill would create a deficit of $827 billion; the House bill, $820 billion. So it is $7 billion more in deficit spending than the House bill. My colleague from Maine described this as a targeted approach because, of course, much of the spending they have tried to remove from the bill is ordinarily handled through the regular appropriations process. They wanted that spending to be handled in the regular order through the Appropriations Committee, and therefore they are going to target things that should not be handled through that process. Then I heard described items like Pell grants. Now, we have a lot of Pell grants, a lot of students who have benefited from Pell grants. They have all benefited from Pell grants because the Appropriations Committee has appropriated money for Pell grants, and we voted for that here in the Senate. There has never been a stimulus bill to pass Pell grants before. So if this is a targeted approach and we are going to have $6 billion in there for Pell grants, there seems to be a contradiction. It was also indicated that this deal is better than the House bill because this will really stimulate the economy as opposed to the approach in the House bill. Then there was described items such as $6 billion for special education. Well, once again, everybody is in favor of special education, but how does special education--$6 billion-- stimulate the economy? I suppose you could say: Well, it at least enables us to hire more special education teachers. How long does it take to educate a special education teacher? About 4 or 5 years in college? Hopefully, we are out of the recession by then. There was a description of $87 billion in ``targeted increases'' in Medicaid. Well, it appears to be the very same amount of money that came out of the Finance Committee--$87 billion for Medicaid. The CBO has said that of this $87 billion, only $10.8 billion is targeted for Medicaid. The rest is, in effect, free cash for the States. This is not a targeted approach at all. Moreover, the committee--and I will see when we understand how this bill is actually written--provides a 27-month cliff. In other words, in order not to look as if it is spending too much money, it assumes that after 27 months everybody will just be removed from the rolls. Well, I defy my colleagues in this body, after a lot of people have been added to the Medicaid rolls, after 27 months to just inform them they are going to have to be removed because we did not provide the funding for it. Obviously, the program is going to be continued and the cost to the American taxpayer will be much greater. Finally, just to comment about working together, we all try to work together, and it is true that the American people want us to work together. But they do not want us to work together to waste a lot of their money. So the question still remains: Is the deal that was struck today a better deal in terms of wasting the public's money and being effective at stimulating economic growth? Certainly, the case was not made in 45 minutes on the floor this evening. I will be looking forward to the debate here after we have had a chance to read the bill, to understand why the proponents really think this will be better, and we will be willing to debate that. In the meantime, I remain convinced that we do need a targeted--a really targeted--approach and that it needs to be aimed toward stimulating the economy and creating jobs, just not spending more money.

Mr. KYL. The following Senators are necessarily absent: the Senator from New Hampshire (Mr. Gregg) and the Senator from Texas (Mrs. Hutchison).

Mr. KYL. The following Senators are necessarily absent: the Senator from New Hampshire (Mr. Gregg) and the Senator from Texas (Mrs. Hutchison).

Mr. KYL

Mr. KYL. The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).

Mr. KYL. Mr. President, at the conclusion of my remarks, I am going to ask unanimous consent to print in the Record some recent op-eds. I would like to quote from some of them because they reflect the emerging consensus of experts around the country as to what this so-called stimulus package is all about and what the results of it will be. A couple of these I wish to talk about because they are from unlikely sources in the political spectrum. One might assume, for example, that the Washington Post would be very supportive of moving forward with a so-called stimulus bill. But this morning in the Washington Post, there is a pretty significant question raised and a concern raised about whether the bill should move forward as it is. I am advised that because of the division of the time, rather than 15 minutes remaining, the Republicans have only 1 minute. That probably means I have about 30 seconds. What I will do, if we do extend the time as the manager indicated after noon, I will conclude my remarks at that time, or if the Senator has some time now.

Mr. KYL. Mr. President, I appreciate the Democratic whip getting that cleared for everybody's sake and also for permitting me to continue to speak. I appreciate it. This Washington Post editorial quotes the President, first of all, contending that the opponents of this bill are peddling the same failed theories that helped lead us into this crisis. I am one who is very skeptical about this bill. I am not quite sure what the President is accusing me of. What we asked is that a program be built from the bottom up that would be targeted at helping people who are in need, that would be targeted at helping to create jobs in a quick way, that will actually quickly create jobs that could stimulate the economy and that will not put a burden on future budgets and on future taxpayers by creating new permanent programs and mandatory spending that takes a long time to spend out. The Post then goes on to criticize the attempt of the President to pin on all of the opponents some ideological objection. As it notes: . . . Ideology is not the only reason that senators--from both parties--are balking at the president's plan. As it emerged from the House, it suffered from a confusion of objectives. Here is the point I wish to emphasize. When the President talked not merely of a prescription for short-term spending but a strategy for long-term economic growth, here is what the Post says: This is precisely the problem. As credible experts, including some Democrats, have pointed out, much of this ``long-term'' spending either won't stimulate the economy now, is of questionable merit, or both. Even potentially meritorious items, such as $2.1 billion for Head Start, or billions more to computerize medical records, do not belong in this legislation, whose reason for being is to give U.S. economic growth a ``jolt,'' as Mr. Obama himself has put it. All other priorities should pass through the normal budget process, which involves hearings, debate and--crucially-- competition with other programs. I think that is right. That is one of the things Republicans have been saying. Some of the spending in the bill may be perfectly meritorious, but since this is emergency spending, it does not have to be accounted for in either reduced spending elsewhere or new tax receipts. It is simply added onto the budget deficit. What the Post and what we and others have been saying is that spending with long-term consequences is nothing more than the kinds of items we pass every year in the appropriations process, and it should be subjected to that process. The so-called stimulus bill should be reserved for those items that stimulate quickly. We have all heard the phrase ``timely, targeted, and temporary.'' Part of the problem with the bill is that because it creates new mandatory spending and it creates new permanent programs, it is not temporary. In the discretionary account, more than half the money does not even begin to be spent until the year 2011. I know all of us hope by 2011 we are out of this recession. I think the Post's criticism is very valid. I urge my colleagues to look at this a slightly different way. Rather than spending on programs that seem like a good idea and may have long-term, positive consequences, let's remove those items from this bill and focus strictly on the items that would actually stimulate the economy. There is a second op-ed piece that was written in my hometown newspaper, the Arizona Republic, on February 6, by Bob Robb, a columnist there who is very erudite and a good economist. He criticizes both Democratic and Republican ideas. He is an equal opportunity criticizer. We all benefit from that critique of his from time to time. Here is what he says about the Democratic proposal: The Democratic stimulus proposals are based upon a false premise and a deceit. The false premise is that all Americans are construction workers. The Democrats propose that the federal government build new stuff for virtually everyone. The Congressional Budget Office has already noted the constraints that exist on government's ability to get hundreds of billions of dollars of construction money out the door quickly. But even that ignores the constraint from those who would need to do the work. Residential construction is, of course, in a deep slump. Commercial construction not so much. And residential construction workers are not easily redeployed to do commercial and heavy construction. The skill sets are different. The deceit is that all this spending requires suspending ordinary budget constraints to jumpstart the economy. Most of the spending is actually in pursuit of long-term Democratic economic growth strategies. Democrats believe that the economy will perform better long-term with significant additional government investments in alternative energy sources, education, health care and social welfare programs. And we have heard that during this debate. He goes on to conclude: Democrats won the election and certainly have the right to try to advance their long-term strategies. But there is nothing about fighting the recession that justifies exempting these long-term strategies from the most basic of budget considerations: How are you going to pay for them? Even without the stimulus package, the federal government has already reached post-World War II records for spending and the deficit as percent of GDP. The primary economic effect of the Democrat's stimulus proposals will be to inflate private sector commercial construction costs and give the country an even more severe fiscal headache. That leads into the third op-ed by George Melloan in today's Wall Street Journal that I will have printed in the Record. He is a respected commentator and economist in these matters. I am not going to quote very much of his op-ed. The title of it is: ``Why `Stimulus' Will Mean Inflation.'' He concludes, as did Bob Robb, that will be the result of all of this spending which is declared emergency but is not distinguishable from most of the spending that we do in the ordinary appropriations process. But his concern is that as we inflate the currency of our country, it will be more and more difficult to get people to buy our debt, and the net result could be increasingly costly debt financing. As he notes, too, the credit for the rest of the economy will become more dear as well and entitlements will go up instead of being brought under control under this legislation. He predicts this will require the Fed to create more dollars, and the end result will be severe inflation in our economy. That is borne out by the fact that even though the legislation purports to end some of the mandatory spending programs after 2 years, the cost of 10 years for these programs that will supposedly expire is well over $1.3 trillion. I don't think very many of us believe that after 2 years we are going to stop this mandatory spending. My colleague, John McCain, offered a proposal. In fact, there were two. The Senator from South Dakota, Mr. Thune, offered another one. The idea was, once we are out of the recession, once we have had two quarters of economic growth, then surely that is the time to stop all this so- called stimulus spending. That is, in effect, what the proposal said. It was rejected by our Democratic colleagues. The reason is very clear: They don't intend to stop. They intend to continue it, and that is another $1.3 trillion that is not even factored into the cost of this $1 trillion-plus bill. Take the $1 trillion deficit we have now, $1.3 trillion on the bill before us, another $1.3 trillion, and as Everett Dirksen said on this floor a long time ago, pretty soon you are talking big money. We are talking trillions of dollars, and we should not be in that position today. Recently, the President spoke to some of our Democratic colleagues. He said the Republicans criticize this bill as a spending bill. I am paraphrasing. He said: Of course, it is a spending bill; that is the whole point. I understand what he was getting at. Many believe Government spending can stimulate economic growth, and I suspect in certain ways that can be done. A lot of us believe those benefits are limited and that there are better ways to stimulate economic growth. But that is the Keynesian theory. When the President says: Of course, that is a spending bill, that is the whole point; he is acknowledging what we have been saying on this floor for a week now, which is that this is a spending bill. He would say: But it also stimulates. What I said yesterday was that is kind of a trickle-down theory. The Government spends $1 trillion, throws it against the wall, and hopes some of it trickles down to actual families who need the support so they can then get their own budgets in balance and, hopefully, have something left over to spend. That is where ideas, such as those in the alternative proposed by my colleague, Senator McCain, come into play because they actually help families in a way that could also have a way of stimulating economic growth. That is what this package should be all about. I will summarize it this way. This bill spends far too much money for far too long a period of time without any requirement that it be offset in any way by reductions in spending or tax receipts, which is the normal appropriations process and will inevitably result in inflation which robs every American and, in particular, retired Americans who have to rely on their savings. We have to consider the long-term consequences, and I hope the better Republican ideas that have been, so far, pretty much rejected by our colleagues on the Democratic side can be brought to the floor as amendments and will be supported so there can be broader support for this legislation. If it is adopted on virtually a party-line basis, that is not going to be good for the country, and the end result will not stimulate the economy. Mr. President, I ask unanimous consent to have printed in the Record three items. The first is an editorial in the Washington Post, February 5, called ``The Senate Balks.'' The second is a column in the Arizona Republic, dated February 6, ``Bad Stimulus Ideas All Around.'' The third is a Wall Street Journal, February 6, George Melloan column, ``Why `Stimulus' Will Mean Inflation.''

Mr. KYL. Mr. President, again, I thank the manager of the bill and my colleague Senator Durbin for allowing me to give these remarks.

Mr. KYL. The following Senator is necessarily absent: the Senator from New Hampshire (Mr. Gregg).