Frank Pallone

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, absolutely, and again, particular statements the gentlewoman made about homeland security and the potential war, it goes back to what I was talking about, this whole idea of, I call it the State of the Union credibility gap. In other words, the President promises to accomplish a goal, but no action is taken that would achieve that goal, and I think it is very true with the homeland security issue. In other words, we get up and talk about how we are going to protect the homeland, but then when the money comes for the first responders back at home in our towns or counties, money has not been there; and even the war in terms of a potential war in Iraq, the budget does not include, the President's budget does not include the cost of fighting the war. So when we talk about this deficit, which we estimate to be about $300 billion at this point, it does not include the cost of the war, which could be 2-, 300-, maybe as much, and put us in deficit to $600 billion, and I think that is the problem. We are getting a lot of rhetoric from the President, but we are not getting the action that goes along with it, and I know I have my colleague here from Ohio who is going to talk about that also in the sense of the veterans' benefits. I had said earlier, and I know he is going to get into this in more detail, but the President gets up here and talks about how he is a champion of the veterans, but then the White House cuts funding for VA health clinics, forcing 164,000 veterans to be turned away, and I am hearing this all the time in my district about how the money is not there. I appreciate the gentleman coming down here, and I yield to the gentleman.

Mr. PALLONE. Mr. Speaker, again, I want to thank my colleague from Maine for his comments, and let me say, first of all, that when he introduces his America's Rx bill, I would be glad to be one of the cosponsors because I looked at it, I read about it, and I think it is a very good and needed legislation. He points out very effectively again why it is important for us to speak out on the Medicare issue and on the prescription drug issue. And again, I sound like I am just being critical of the President, but I think on this one, it is just a perfect example of where he is going to be giving the impression tonight that somehow he is going to reform Medicare, he is going to provide a prescription drug program, but then when we look at the data, it is just not there. It is essentially a privatization of Medicare. It essentially says if a person is willing to join an HMO or if they are willing to take Federal dollars and get into some other kind of private program, we will provide them with a prescription drugs benefit, but for the vast majority of the Americans who either will not want to get out of traditional Medicare or will not even have the option, because in a lot of States, particularly more rural States, they do not even have the option of an HMO, it is not going to be meaningful. We have worked for a couple of years now, and we know that there are very simple ways of addressing this problem. One of the ways to deal with the costs is our colleague from Maine's proposal, we call it the Allen bill, that would basically limit how much prescription drugs can be charged for, and I have been a cosponsor of that, but we also have a Democratic plan for a benefit package that would simply expand Medicare, create a new Part C or D, which is very much like what we do now for Part B with the doctor bills. A person pays $25 a month, they get 80 percent of the cost of their prescription drugs paid for by the Federal Government. They have a $100 deductible, and it is guaranteed to everybody. Everybody who wants it under Medicare gets it. They do not have to join an HMO. They do not have to go outside of traditional Medicare to get it, and that is the only way or the most effective way that we are going to accomplish the goal of guaranteeing a prescription drug benefit. The President not only does not do that, but he is looking to basically revamp Medicare itself and privatize it because he says there is not enough money, and I just hope that the public understands that we need to keep the drumbeat going so they understand what he is really doing, that he is really not credible on this issue. And I appreciate the fact that my colleague is here, and I will make sure that I cosponsor that bill when he is about to introduce it. I yield to the gentlewoman from Texas, who was already here this evening talking about the problems with the Bush economic stimulus plan.

Mr. PALLONE. Mr. Speaker, I took to the floor this morning during our morning hour debate to express my concern over what I call the President's credibility problem. I talked about a credibility problem in the context of not only what we expect to be in tonight's State of the Union Address, but also by reference to the State of the Union Address that the President made last year. What I am talking about essentially when I mention a credibility problem is the fact that the President essentially makes promises about what he is going to do to solve the Nation's problems, particularly the economic downturn; but when we look at what he proposes, the action that he proposes to solve the problem, it does not really solve the problem. So the promise is made essentially by the President that we are going to turn around the economic downturn, but when we look at the proposals that he announces to accomplish that goal, there is no way that they could accomplish that goal, because they are not designed to accomplish that goal. The credibility problem exists in so many areas. It is not only with regard to his economic plan, his so-called stimulus plan, it is also relative to the deficit. The President indicated last year that the deficit would be small, that it would be taken under control. Now we know that the deficit is likely to be at least $300 billion, and I would venture to say that if the President were able to get his economic stimulus package, his promise to make his tax cuts from last year permanent, to follow through and pay for a potential war in Iraq, that we would probably end up with a deficit that could be upwards of $2 trillion. That credibility problem also exists with regard to a number of other issues; for example, health care. The President says that we are going to reform Medicare and we are going to provide a prescription drug benefit for seniors in the context of Medicare. What we find out, and we will hear about tonight, supposedly, is a privatization plan for Medicare that does not guarantee a prescription drug benefit unless you leave traditional Medicare and you join an HMO or some other type of private insurance. The list goes on. We are told that we are going to do things for veterans, and then we see cuts in money for veterans' health clinics. We are told that we are going to implement a situation where no child is going to be left behind in terms of public education. That is the President's theme. But then we find that there is a huge credibility gap, a huge difference between the rhetoric and the reality, because, in fact, money for education is being cut. Affirmative action is another example. The President says he wants diversity, and he appears to give the impression that he is favorable to affirmative action. But then he asks the Justice Department to file a suit against the University of Michigan because of their affirmative action program. And I am not trying to imply the President is purposefully trying to deceive anyone, but I think the reality is that his ideas of what are going to accomplish the goals that he sets out to accomplish are very different from reality. And whether it is an economic plan, whether it is his idea of affirmative action, whether it is his idea of the deficit or his idea on health care, most of these ideas do not actually translate into any action that will accomplish the goals that the President commits himself to. I guess the worst example in this respect right now and the one that I think is the most injurious is with regard to the economy. We know that the economy has taken a significant down- turn. We know that some action needs to be taken here in Congress so it does not get worse. And yet if you look at what the President has proposed, it does not accomplish the goal. He calls it an economic stimulus package that is going to boost the economy. Well, let me go through some of the things that he claims he is going to do with regard to the economy and then talk about the reality of what would really happen with his proposal. He claims that his plan will have an immediate boost to the economy. That is why he calls it a stimulus package. But the Bush plan fails on the most basic level by not delivering the immediate stimulus needed to help boost the economy in the short term. By the White House's own projection, less than 10 percent of the package's total spending comes this year in 2003 when the economy is weak and people are out of work; and as a consequence, even by his own estimates, the Bush plan will create only 190,000 jobs this year, only 11 percent of the jobs lost since President Bush took office. Let me give you another claim. The President claims that his plan is fair and is going to provide 92 million taxpayers with an average tax cut of $1,083. Unfortunately, as with the last tax cut that we had from the President in 2001, this one overwhelmingly benefits the wealthy. Once it is fully phased in, the Bush plan provides more than 40 percent of the tax breaks to the richest 1 percent, with less than 17 percent going to the vast majority of Americans. I could go on and on. I see one of my colleagues is here, and I would like to yield time. I just want to mention the one thing, though, that is perhaps the most important in terms of what I call the ``credibility gap'' with regard to the President. He talks about the fairness of his economic plan because it stops the double taxation of stock dividends. Well, first, double taxation of stock dividends is not a huge problem because much of corporate income is not taxed at all now. Corporations often make aggressive use of tax shelters to avoid paying any tax on profits. Take, for example, the CSX Corporation. Over the 4 years, 1998 to 2001, CSX had a cumulative net profit of $934 million but received a net Federal income tax refund of $164 million. And it paid dividends in every quarter. I think if there is anything that is in his economic plan that has received the most attention in terms of its inability to accomplish the goal of giving the economy a boost is his effort to eliminate the taxation on dividends. Because, really, no economist that I know has suggested that somehow that is going to accomplish the goal. And it has gotten so bad that even a significant amount of Republicans oppose his dividend tax cut. In fact, today, most significantly the House Committee on Ways and Means chairman, the gentleman from California (Mr. Thomas), Republican, had said that he had serious questions about the dividend tax cuts. It is an article that is in today's Washington Post. And we will develop this a little more. But I just want to stress over and over again how important it is to look at the President's actions and what he proposes, not his rhetoric about what he is going to accomplish. Mr. Speaker, I recognize the gentleman from California (Mr. Schiff).

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, we all know that tonight the President will deliver his State of the Union Address, and that is often and is supposed to be an opportunity to reflect upon the state of the Nation, the economy, foreign policy, the potential war, and health care, which are just some of the issues that we expect the President to address this evening. My concern, and I have shared this concern with many of my Democratic colleagues, is that the President constantly comes forward and talks about what he is going to do to address the Nation's problems, to deal with the economy, for example, to deal with health care, for example, but many times those promises are not kept in terms of what action he actually follows up with to meet the commitments that he makes. I call it a credibility gap. Some of my colleagues on the Democratic side have taken notice of this credibility gap over the last 2 days; and I wanted to particularly mention that today because when I opened the New York Times this morning, I saw a column by Paul Krugman where he actually references a credibility problem with the President, and he talks about it in the context of not only tonight's State of the Union Address, but also in comparison to last year's State of the Union Address to basically draw out the conflict between what the President says he is going to do versus what he actually does. I would like to quote some sections of Paul Krugman's column and talk about it because I think this is very important in the context of tonight's State of the Union Address. The column says whether Mr. Bush is held accountable for the promises he made in his last State of the Union Address is a major issue. Krugman says that the President ``assured those who worried about red ink last year that `our budget will run a deficit that will be small and short-lived.' He offered comfort for those who remembered his father's `jobless recovery,' which felt like a continuing recession: `When America works, America prospers, so my economic security plan can be summed up in one word: Jobs.' ``Fast-forward a year. We now know that the `small' budget deficit will rise above $300 billion, and stay there. Even the administration's own, ever-optimistic budget officials now concede that we face deficits as far as the eye can see. Meanwhile, payrolls continue to decline; since the working-age population keeps rising, it's becoming ever harder for ordinary Americans to get jobs, or keep them. ``And there's a good chance things will get a lot worse; with markets sliding, consumers wilting, businesses fearful about the effects of war and oil prices rising, the pieces are in place for a full-blown double- dip recession. And the second dip would take us much further down than the first.'' I think this is of a major concern to me. The President identifies that we have an economic problem, that we have an economic downturn, and he says that he is going to do something about it, but what is he actually proposing? The heart of his economic proposal or package is eliminating the tax on corporate dividends, eliminating the tax on essentially the stock market dividends. Americans know that is not going to accomplish anything. It is not going to do anything to stimulate the economy. It is not going to put money in people's pockets or create jobs. So again, there is a credibility gap. There is recognition on the part of the President that there is a problem with the economy, but the actions that he seeks to take, unfortunately, will not correct the problem. The President talks about homeland security. He talks about the war on terrorism, both internationally and here at home, but as my colleague from California earlier this morning pointed out, money is not going back to the States and the localities for homeland security. Money is not going back for civil defense or to help the localities or the people that were affected in New Jersey, in my case, directly by the World Trade Center. Many of our towns are complaining that they are not getting the promised funding to deal with the homeland security problem. The President last year talked about how the deficit was going to be small, but we know that his economic plan will cause huge deficits. We are told if we implement his economic stimulus package and we make the tax cuts permanent that he proposed last year, and we have to fight a war in Iraq, we may end up with a deficit that is over $2 trillion. Think about what the President says about veterans. He promises to be a champion for our veterans, but he cuts funding for VA health clinics, forcing 164,000 veterans to be turned away. He promises that he is going to expand Medicare to include a drug benefit, but instead of actually doing something now to make a difference for seniors, he blocks generic drug legislation that will lower costs for seniors and for those who want to have access to lower- priced drugs right now. Mr. Speaker, on every one of these issues, look at what the President says tonight. In many cases it is misleading and false promises. It is a credibility gap that we are facing in terms of what he says he is going to do as opposed to what he actually does in these very troubled times.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, pursuant to House Concurrent Resolution 8 of the 108th Congress, I move that the House do now adjourn.

Mr. PALLONE

Mr. PALLONE. We need to continue. I thank the gentlewoman.

Mr. PALLONE. I appreciate it. Mr. Speaker, I think it all goes back to the same thing, which is as the Democrats we are talking about a short-term 2003 plan that does not spend a lot of money relatively and put the government in deficit, and that is specifically directed to jumpstart the economy. But what the President and the Republicans have proposed does not really even address the short-term economic needs in order to turn the economy around. It is just a long-range plan to basically provide more tax cuts for wealthy people: the stock dividends; the proposal to make the tax cuts permanent in another 10 years. If we look at that in the context of what the budget needs are, as the gentlewoman says, in this war on terrorism both at home or abroad, we have to wonder where all this money is going to come from and what the consequences are going to be in terms of the deficit.

Mr. PALLONE. Mr. Speaker, I want to thank the gentlewoman from California for her remarks. Obviously, she really set forth the differences between what the Democrats are trying to do with our economic stimulus plan versus the President and the Republicans' plans, which I do not think, and the gentlewoman agrees, that the President's and the Republican plan is really going to make a difference for the economy. It is just sort of a way of getting more tax cuts, more of the same, primarily to the wealthy and to corporate interests. It is almost like they are using the need for a stimulus plan as an excuse to basically continue the same old policies of more and more tax cuts for the wealthy, which have failed. One of the things that bothers me a great deal, and the gentlewoman hit upon it, is the fact that we still hear, although we do not hear it so much, but for a while we were hearing the Republicans say, oh, this recession really started under President Clinton, as if somehow the Democrats brought about the recession. The gentlewoman and I know, and the facts show, that we had the greatest, or one of the greatest, I think probably the greatest economic growth in the 10 years from 1991 to the end of President Clinton's term in 2001 or the very beginning of 2001, the greatest economic expansion the country has ever seen. All of a sudden, in March of 2001, 3 months into President Bush's term, we start to see the economic downturn. I had actually mentioned the other night, and this is from the National Bureau of Economic Research Business Cycle Dating Committee, and maybe it is sort of a minor point, but I only mention it because I see our Republican colleagues saying the opposite. And in this research, it says, ``In November 2001, the Committee determined that a peak in business activity occurred in the U.S. in March of 2001. A peak marks the end of an expansion and the beginning of a recession. The determination of a peak date in March is thus a determination that the expansion that began in March of 1991 ended in March 2001 and a recession began in March of 2001.'' The recession began, as the gentlewoman said, under President Bush's watch. Regardless of that, it has gotten worse. It gets worse every day. I have to say that I am very concerned that if we put in place this Republican economic plan and we continue the same-old-same-old policies of more tax cuts for the wealthy, that we are probably going to be in a worse situation in a few months than we even are today. I do not want to see that happen, but it is very possible. The other thing that really galls me too, and the gentlewoman brought it up, and the gentlewoman remembers and I remember it even more because I have been here longer is how the Republicans, before they took the majority here in the House under Gingrich, used to get on this floor and rail and rail and rail almost every night about the deficit and how the deficit was getting worse and getting worse all the time. There was one guy I remember, do I not know if he is still here, I do not think he is, who used to have one of the pages bring this sort of clock, digital clock that literally extended almost the entire length of this podium where I am standing, and every night he would come here and do a 1-minute or a 5-minute, and he would see the clock number going up with the higher and higher deficit. That was the centerpiece. The whole theme of the Republicans at the time was how terrible this deficit is. What happened? How come all of a sudden we do not see the guy with the clock anymore? I think he may have left Congress. But we do not see anybody on the Republican side coming down here. In fact, the other day the President said we should not worry about the deficit; it is no big deal. We will grow out of it. We should expect it. We are going to have this problem. It is just some kind of regular business cycle or something. It was ridiculous. I just appreciate the gentlewoman's comments. The other thing that the gentlewoman mentioned that I think was so important is this sort of notion of shared sacrifice or caring about the future generations in a time of war, and I think that is what the gentlewoman said, and she may want to dwell on it a little more, that in a time of war, the idea was that we sacrificed. We have a war against terrorism, we may have a war against Iraq, who knows, in the next few weeks or months. So why in the middle of all this are we getting this tax cut plan that primarily helps wealthy individuals and corporate interests? Why are they not paying their share, if you will, of the cost of this war? Why is there not a shared sacrifice? Why does it always have to be on the backs of the little guy, the average guy? It never used to be that way. It seems to me to be an opportunity for the President to get up and say, we have a potential war, we are in a war against terrorists, essentially, and it is costing us more money. I really do not understand the whole philosophy. It really baffles the mind. There was an article, there was an op-ed in The Washington Post actually today that essentially made that point. It was an analysis by Jonathan Weisman, and it is entitled, ``War's Cost May Dwarf Stimulus Effect.'' Essentially what he said in this opinion page is that we really should not be dealing with any kind of major tax cuts or any kind of a plan that causes a major deficit problem, because we might have a tremendous expense from the war with Iraq, and that the impact of that would create such a large deficit and have such a downward effect on the economy that this is not the time to be playing with a huge tax package, with a huge long-term tax package that has the potential for greater debt, and we should only be doing something, essentially, I mean, to counteract that; we should only be doing something like the Democrats are proposing which is quick, which is one year and does not have any major impact on the deficit. Mr. Speaker, I promised to yield to the gentlewoman from Ohio (Ms. Pryce) for procedural matters. Election of Members to Certain Standing Committees of the House

Mr. PALLONE. Mr. Speaker, I just wanted to follow up to some extent on the comments made by my Republican colleague from Colorado. I know he mentioned that today the House passed a Republican-sponsored bill that would provide an additional 13 weeks of extended unemployment benefits to workers who had exhausted their benefits. But I have to say that this proposal did not go far enough. We know that the economy is in a significant downturn, there are many people who have exhausted their unemployment benefits, who would not be able to continue to receive benefits under the Republican proposal, and also the Republican proposal is for a relatively short period of time, 13 weeks, as opposed to the 26 weeks that had been proposed by the Democrats. Basically what they agreed to today, the Republicans, was to pass a bill that would provide 13 weeks of extended unemployment benefits in every State during the first 5 months of 2003. However, even now the Republicans still refuse to provide any additional assistance to the 1 million workers who exhausted their 13 weeks of extended benefits last year but who remain unemployed. During the last recession in the early 1990s, these workers were provided 26 weeks of benefits; but this time they only received 13 weeks. Furthermore, there is $25 billion in the Federal unemployment trust funds, more than enough to both continue the extended benefits program this year and help exhaustees from the last year. Unemployment compensation goes to the families who must spend it very quickly, meaning it acts as an economic stimulus. Economists have estimated that each dollar of unemployment benefits leads to $2.15 in economic growth. I mention this because I think that to some extent people are going to read now that the Republicans passed this bill and say, that is great, we are going to have some more extended weeks of unemployment benefits, but the fact of the matter is a lot of people will not receive the benefits who really need it and it is for a relatively short period of time. The Democrats have said, of course, that we would go 26 weeks, to the end of June, and we would include all of those who have exhausted their benefits, the 1 million or so from last year who would get an additional 13 weeks under the Democratic proposal. The other thing, though, that was very upsetting to me today was not only that we did not go far enough in terms of unemployment benefits in what we finally passed here in the House but also even as President Bush announced his economic stimulus plan, which I do not think is an economic stimulus plan at all and I will go into that a little bit, it was announced as part of it that the effect on the deficit over the next 10 years would be about 674, $675 billion. We know that we are already back into a serious deficit problem this year, about $150 billion. After having several years under President Clinton when we actually had a surplus, now we are back into a deficit situation. And what President Bush proposes in his economic package will cost a tremendous amount of money and not necessarily put anybody back to work, not create the very stimulus that he claims to be talking about. But an important part of that is that it is going to put us so much further into debt, to the tune of something like $674 billion. But what did I hear? Instead of reacting the way the Democrats said and saying let us have a real economic stimulus plan that actually does something and does not cost that much because the Democrats are at just a little over $100 billion, what we are hearing from the Republican side of the aisle is that this economic plan of the President's is not big enough, is not going to put us enough in deficit. In fact, we have the majority leader, the Republican majority leader, the gentleman from Texas (Mr. DeLay) saying that he wants to boost the size of the Bush tax cut package. He is actually quoted in Congress Daily saying today that the Republicans, the House Republicans would move quickly to pass most of President Bush's 10-year $674 billion tax cut proposal, and they would likely increase the total size of the package. This is a quote: ``The House will pass a bill that will have all the tax relief that is in the President's bill and probably more,'' Mr. DeLay said, adding, ``I see the President's package as a floor, not a ceiling.'' Obviously, what the gentleman from Texas is trying to do is counteract the statements being made by the Democrats that the President's plan is not only ineffective as a stimulus but is also going to put us seriously into debt by suggesting, ``Oh, don't worry about that, I'll come up with an even bigger one.'' It is scary to think what the Republicans are thinking about in the House. They seem to be just perfectly willing to rubber-stamp whatever the President does and then go even further in terms of putting us into debt and doing something that is not going to be very effective for the American people. Why do I say it is not effective? Why do I say the President's plan that was announced yesterday is not effective as a stimulus package, that it is not going to do anything to put people back to work, that it is not going to do anything to improve the economy? If you look at it, the centerpiece of the President's plan is the complete elimination of all taxes on stock dividends. If you think about it, not only is that primarily going to benefit the wealthy instead of putting back money into the hands of the average American, but what guarantee is it that if you give this windfall essentially to people who have dividends, stock dividends, that they are going to invest it back in the economy and create jobs? We have no guarantee that the stock market is going to go up because of it. We have no guarantee that whatever savings are made are going to be reinvested in new means of production or creating new jobs. This is just speculation. And to say that the centerpiece of your plan is such a speculative proposal and to put us into debt so much more over the next 10 years is just, I think, totally irresponsible. According to a preliminary estimate by the nonpartisan Tax Policy Center, 45 percent of the benefits of the entire Bush proposal will go to the top 5 percent of taxpayers who have an average income of $350,000. In fact, those making over $1 million will see an average tax break of $88,000, more than 100 times the tax cut for the vast majority of taxpayers making less than $75,000. Let me also add, when I talk about this budget deficit that is going to be increased by 6 to $700 billion under the Bush plan, keep in mind that the President also said when he announced his proposal that he also wanted to make the tax cuts of last year permanent, which would probably double the amount of deficit. You could probably double that 6 to $700 billion figure and go up to, say, 1.4, $1.5 trillion, not to count the debt service that you would have on that. By the time it is all said and done, the thing that the President proposed or said he wanted to do yesterday not only in this initial so- called stimulus plan but also long term in terms of making the tax cuts permanent that were put into law last year, we would probably be talking about a $2 trillion deficit. We are going to go back to the worst of times that we have ever seen in terms of deficit. The consequence to the economy will be dismal. The impact in terms of creating even more of a downward trend on the economy from that kind of budget deficit is really incredible. Mr. Speaker, I wanted to talk a little bit about the Democratic alternative, and basically the Democratic alternative is radically different from what President Bush has proposed because it is based on certain very sound principles. First of all, it says that any economic stimulus plan should be front-loaded and fast-acting. The benefits have to accrue to the American people this year, in 2003. It has got to create jobs. It has got to put money in their pockets. It has to put money back to the States so that they can bail themselves out of some of the deficit problems that they have. It should also avoid mushrooming the deficit in the long term. The Democratic proposal basically is targeted towards 2003 and over the 10-year period would only create an additional deficit of about $100 billion. I think you could make a legitimate argument that the economy would grow enough to make up for that $100 billion because it is front-loaded and fast-acting. It would also boost consumer demand and investment because it would say that some money is going to go directly into consumers' pockets and some money is going to be given back to small businesses so that they can invest here and would be forced to invest here rather than take their stock dividends overseas or put them in some other country. Also the Democratic plan would help States through their fiscal straits. We know that so many States, my home State of New Jersey we estimate maybe a 4, $5 billion deficit that has to be overcome. Let the Federal Government help out a little bit with that. And also we are investing in infrastructure primarily by funding homeland defense, airport security, security for other infrastructure around the country. But I think the most important thing, and I do not want to keep repeating myself, is the fact that under the Democratic proposal we are basically doing something that makes a difference now in this next year. I should say in this year, 2003. Let me just briefly run through what the Democrats are proposing. We have a middle-class tax cut that basically gives a refundable tax cut. It is 10 percent of your taxes up to about $600 for a couple, structured to include those who pay payroll taxes. Basically it is going to be structured in a way that you get a rebate of up to $300 for an individual or up to $600 for a couple. We have business tax incentives to encourage investment so that the investment has to be here in the United States, this year. And we have assistance to the States including money for infrastructure and also to help States defray the cost of Medicaid, which is a big part of the reason why so many of them are in a deficit situation. And I mentioned the unemployment compensation benefits would be much more extensive than what the Republicans proposed today and passed today. I just wanted to say a little bit, a little commentary by some of the media. The media in the editorials that I have read have essentially panned the Republican proposal and said that the Democratic proposal would be much better and really make a difference in terms of economic growth. I just wanted to read some excerpts, if I could, just from two New York Times editorials and op-eds that were in the paper yesterday. This one is by Paul Krugman, it was in yesterday's paper, just to give you some highlights of it. He is talking about a sensible plan: ``A sensible economic stimulus plan would provide immediate, large-scale aid to beleaguered State governments, which have been burdened with expensive homeland security mandates even as their revenues have plunged. Given our long-run budget problem, any tax relief would be temporary and go largely to low- and middle-income families. ``Yesterday House Democrats released a plan right out of the textbook: aid to States and the jobless, rebates to everyone. But the centerpiece of the administration's proposal'' by contrast ``is the permanent elimination of taxes on dividends. ``So instead of a temporary measure, we get a permanent tax cut. The price tag of the overall plan is a whopping $600 billion; yet less than $100 billion will arrive in the first year. The Democratic plan, with an overall price tag of only $136 billion actually provides more short- term stimulus. ``And instead of helping the needy, the Bush plan is almost ludicrously tilted towards the very, very well off. If you have stocks in a 401(k), your dividends are already tax sheltered; this proposal gives big breaks only to people who have lots of stock outside their retirement accounts. More than half the benefits will go to people making more than $200,000 per year.'' I could go on and on but I think the point is well made. The Democratic proposal is a real stimulus package. It does not increase the deficit in a significant way. It gives money back to the average American. It is primarily skewed to help the average guy. The Republican proposal is primarily for the rich. It does not do anything short term, and it leads to an even greater deficit, worse than the one that we have right now. But the House Republicans are going to say they are going to push this and Mr. DeLay has already said that he wants to do an even bigger one; so we will just have to continue the fight. At this time I see the gentlewoman from California (Ms. Watson) is here, and I have probably spoken long enough and I would like to yield time to her on the same subject.

Mr. PALLONE. I have been hesitating to talk about whether the war is just or necessary, but I think the bottom line is if it is going to be fought or whether it is going to be fought, we have to think about the costs of it. This President's economic plan makes absolutely no sense in the context of whether it is a war against Iraq or the other axis of evil, or just the war against terrorism and homeland security. It really does not.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I just want to say how disappointed I was with the President's so-called economic stimulus package that was announced yesterday. First of all, there is no immediate jumpstart to the economy, and this is just more of the same: Tax breaks essentially to the wealthy, to corporate interests, and very little that means anything for the average American. Mr. Speaker, we have a tremendous problem with an economic downturn. We have more and more people who have lost their jobs. This is not the time to continue the same failed economic policies. The Democrats have talked about basically giving money back to consumers in the form of a rebate. We have talked about extending unemployment compensation for at least 26 weeks. In addition to that, our plan is a real economic stimulus. It gets the economy going again and does not basically put together long-term deficits. If you listen to what the President and the Republicans have been proposing, it is just going to put the economy and the Federal Government into debt even greater, as much as $2 trillion perhaps over the next 10 years. Why do we continue with the same failed Republican policies? Let us do something that gets people back to work, that creates jobs, that gives some money back to the States because the States have so many problems now with their own deficits. The Federal Government has to do something now that is going to make a difference for the average American, and that is not what we are hearing from the Bush administration. We are just hearing the same thing about giving more tax breaks, eliminating dividends with regard to stocks. These things are not going to do anything in the next year to actually help the American people. In fact, I am very fearful that there is a potential that the economic situation even gets worse unless we get together on a bipartisan basis.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, that is a very good point. And the other thing too is that everyone is sort of assuming that this recession is at its worst and somehow we are now going to turn it around; but if the government goes in the wrong direction with President Bush's plan, it could very easily get worse. There is nothing in that plan that is going to stimulate the economy. The consequence could very well be that the recession gets worse and unemployment gets worse. I hope that does not happen, but I think it would be naive for us to suggest that we have necessarily hit bottom. One of the reasons we need to do this, what the Democrats propose, is that we do not want things to get worse. It is not just a question of getting better, but not having the economy even move in a further downward direction.

Mr. PALLONE. Mr. Speaker, the other problem that we have too, which we really did not dwell on too much but I think it is important, is that it really was disgraceful that the Republicans, who are in the majority, with the President went home after December 28 and the people that did not have their unemployment compensation just ran out.

Mr. PALLONE. Mr. Speaker, I want to thank the gentlewoman from Ohio (Ms. Kaptur) for her remarks. Two things or maybe three things that I really appreciate. One, I think it is very important to bring up the crises or I should say the increase costs of oil and how that has steadily gone up in the last 2 years or so and is a major factor also impacting the economy and that this administration has not done anything in the first 2 years to make us more energy independent. They have fiddled around and talked about a lot of things, but nothing has actually been accomplished. The other thing is, in listening to the gentlewoman, it is almost as if President Bush is just going back to the old sort of trickle-down economics; in other words, we give all the money to the rich. Now we give this huge tax break with dividends primarily to the wealthy and somehow that is going to trickle down. But as the gentlewoman pointed out, that is not what happens because the money is just invested overseas, and one of the things that I mentioned before and that is an important part of the Democrat stimulus package is relief for small businesses, which is specifically targeted so that it has to be used to reinvest in new jobs, new means of production, and the majority of the jobs that are created in the United States these days are through small business. So we are doing the opposite. They are saying we will give a big boost to the big corporate interests and the wealthy and they are somehow going to spend it to create jobs; but there are no strings attached, whereas the Democrats have a proposal that specifically targets small businesses and insists that whatever tax savings or credits are specifically for new jobs and new production here, which I think is crucial because otherwise it is a waste, and the gentlewoman has pointed that out very effectively.

Mr. PALLONE. I just want to thank my colleague from Oregon for coming down and saying what he said. The thing that is amazing to me, I tried to point out in the beginning that essentially this recession began in March of 2001, I guess 3 months into President Bush's term. Not too long after that he imposed or got the Congress, primarily Republicans, to pass this huge tax cut which primarily went to the wealthy individuals and corporate interests. That has now been around, I guess, for a little over a year approximately and the recession has only gotten worse. So why now are we talking about another major tax cut that essentially does the same thing, making permanent those tax cuts from a year ago and then coming up with this exclusion of tax on dividends which admittedly is being done in order to try to boost up the stock market and therefore again primarily benefits wealthy people. It is sort of like a failed policy has not worked, so why are you going to make it worse? But even beyond that, the idea, as you say, of having the majority of this stimulus package be directly linked to trying to boost the stock market is such a risky thing. We all know the stock market's volatility. It is not necessarily dependent on any one factor. So to suggest that dealing with dividends is somehow going to increase the indexes dramatically I just do not buy, and I think it is so speculative and it is so much easier to do the kinds of things that the Democrats have proposed. I just want to thank you again for joining us. I yield to the gentlewoman from Ohio.

Mr. PALLONE. Madam Speaker, I take to the floor this evening for the first day of the new Congress basically to talk about the economy and my concern about the fact that the Republican majority, President Bush and the Republican majority now in both the House and the other body, really are not doing anything, in my opinion, to address the downturn in the economy, the loss of jobs, the loss of production. It is of a great deal of concern to me and I know to my constituents. This is their number one concern, what is this Congress and what is this President going to do to turn the economy around. Today is a very important day in that regard, because the President today, in Chicago, we understand, is unveiling his economic stimulus package, what he claims will be the answer to try to revive the economy. Every indication that we have had so far, as Democrats, is that his proposal will not do anything significant to turn the economic situation around, will not create more jobs. It is primarily a plan that benefits the wealthy, the corporate interests, and does very little, certainly very little in the next year or two, that would make any difference in terms of the economic situation in the United States and the world. Sometimes I think that the White House and the Republican leadership in both Houses here would like us to think that the situation is not that bad and so maybe we do not have to do much in Congress because the economic outlook really is not that bad. Let me assure them that that is certainly not the case. It certainly is not the case with my constituents in New Jersey and it certainly is not the case with any of my fellow Democrats that I talked to today or in the last couple of days since we have returned and since the swearing in. Just to give some idea, and I will not talk too long about this, Madam Speaker, but since January 2001, when President Bush first took office, private sector employment has been reduced by 2.1 million jobs. The number of jobs that have been lost in that period now, which is essentially 2 years, is over 2 million in the United States. If we look at other indicators, business investment since the first quarter of 2001, that is down 10 percent. If I look at the budget outlook, that has deteriorated by $5 trillion since January 2001. I do not need to show the statistics. Members are aware that the stock market has declined considerably, unemployment is up, the budget surplus that existed during the Clinton administration which was the first time in almost 20 years that we had actually turned around a budget deficit and we had a budget surplus, and that meant that we were paying down the debt and more jobs were being created and Americans had more money and long-term interest rates were down because of the surplus. In the last 2 years during the term of this Republican President, we have seen that situation go the other way. We now have a budget deficit that is something like $150 billion, and we anticipate that it will only get worse. It is only going to get worse unless something is done in this Congress to turn it around. The sad thing is when I listen to some of the suggestions that have been coming out of the White House in the last few weeks, including today, I am concerned that their proposal continues this country down the path of larger tax cuts for the wealthy, for corporate interests, and larger deficits that are only going to make the economic situation worse instead of better. One of the things by way of background that really bothers me in terms of what comes out of this Republican White House is the notion that somehow the recession began under the previous administration and that the recession is not a product of the Bush administration. Again, let me give some information on that. The National Bureau of Economic Research, Business Cycle Dating Committee, and this is a direct quote, ``In November 2001, the committee determined that the peak in business activity occurred in the United States economy in March 2001.'' A peak marks the end of an expansion and the beginning of a recession. The determination of a peak date in March is, thus, a determination that the expansion that began in March 1991 ended in March 2001, and a recession began in March of that 2001. So essentially we had 10 years of increased economic activity, of growth, and that ended in March of the first year that President Bush took office after a 10-year expansion that included the entire time that President Clinton was the President of the United States. I do not come here because I want to talk about who did this or who did that, but the bottom line is for Members to suggest that we are not in a bad situation economically today, by any indicator we clearly are, and clearly this recession began under President Bush and has only gotten worse in the 2 years he has been in office. Now what is the President proposing and why is he proposing what he is proposing today? Well, he claims that he is trying to put together an economic stimulus package that essentially will turn the economy around, create more jobs, get consumer spending up and improve the business cycle. If we look at what he actually has proposed, it is more of the same. It is more tax cuts, permanent tax cuts primarily for the wealthy. He thinks that he is going to turn the stock market around by a full exclusion of dividends; but, the bottom line is, again, that is only going to help wealthy people. Media reports on possible elements of the administration's package include the following: full exclusion of dividends from individual taxation; acceleration of marginal tax reductions from the 2001 tax cut; acceleration of child credit increase from the 2001 tax cut; more corporate tax cuts; and possibly some State fiscal relief rumored at $10 billion. But if we look at what the President is proposing today, it will primarily mean more of the same, more tax cuts and more benefits for the wealthy and for corporate interests, and it will balloon the Federal deficit. It will cost up to $6 billion over 10 years with more than 80 percent of the cost after 2003. I think what we are going to see from this administration is essentially more deficits, larger deficits, more money going to the wealthy, and very little, if any, short-term stimulus to the economy that will turn it around. Members do not have to believe me, though. I do not like to get in the well and just talk about what I think. I like to talk about what other third-party commentators have been saying about the President's plan; and I wanted to mention this evening, and I may read all or parts of two comments that were in the New York Times today in reaction to what has already come out about the President's tax proposals and the President's so-called economic stimulus package. The editorial in today's New York Times is particularly revealing, and I will read parts to give Members an idea why I think what they are saying is so true. The title is ``The Charles Schwab Tax Cut.'' It begins: ``The Bush administration never met a domestic problem that tax cuts couldn't cure, and today in Chicago the President is planning to call for more of the same. The centerpiece of Mr. Bush's new economic plan is to eliminate the tax on dividends that will cost the Treasury about $30 billion over the next decade. In a theoretical world, ending the dividend tax might make sense. Unfortunately, we live in the real one, where it's the wrong move at the wrong time for the benefit of the wrong people. ``Ending the dividend tax cut will not provide the economy with a short-term stimulus, the ostensible goal of the plan. Investors won't be seeing their savings until 2004.'' Eliminating the dividend tax, admittedly, has something to commend it, but as became all too apparent in the financial bubble of the late 1990s, the Tax Code currently contains some perverse incentives for companies to becoming overly indebted and to manipulate their short- term stock price, instead of paying dividends as a form of prudent profit sharing. The editorial continues: ``If Mr. Bush's mind had been on the long- term economy rather than on politics, he might have listened to the advice of his former Treasury Secretary, Paul O'Neill, and dropped the idea of further tax cuts altogether. But Mr. O'Neill is a former Treasury Secretary for a reason. The President cannot afford to look indifferent to the problems of average Americans in a sluggish economy. These days average Americans own stock, although most of it is in tax- sheltered retirement funds.'' This is what they say in conclusion, and I think it is important: ``Ending the dividend tax is something almost nobody has been crying out for, except the megabroker Charles Schwab, who made a pitch for it at the economic summit meeting at Waco last summer. The President happened to drop in on the panel on which Mr. Schwab was speaking and pronounced it a good idea. It may turn out to have been one of the most expensive courtesy calls in modern history.'' What the New York Times is essentially saying and what the Democrats are saying is that this elimination of the tax on dividends is going to cost the Federal Government a tremendous amount of money, $300 billion over the next 10 years, but it is not going to do anything to actually put money back into the pockets of consumers. It is not going to create any new jobs. It is not going to provide any real incentive for companies to start new production and create more jobs, do any investment in new production; and all it does is give another huge tax break primarily to very wealthy individuals who own most of the stock. How is this a stimulus? How is this in any way going to help the economy? I wanted to talk about what the Democrats have in mind, and then I want to give some third-party validation of what we have proposed. Over the last month, the House Democrats have gotten together and basically thought about what needed to be done to try to give some short-term stimulus to the economy, to create jobs, to put more money in people's pockets, to turn things around. We came up with a set of principles initially, and then yesterday we revealed our actual plan. I think the principles are important and need to be repeated before I mention some of the specifics of the plan. The principles say any economic stimulus plan should, first, be front loaded and fast acting; second, avoid a mushrooming deficit in the long term; third, boost consumer demand and investment; fourth, help States through their fiscal straits; five, spur the economy by funding homeland defense; and, last, devote every penny to short-term stimulus. We are not interested in looking right now at how something is going to impact 10 years from now. We need to get people back to work. We need to put money in consumers' pockets, and we need to make sure whatever we do does not have any ballooning effect and create more of a deficit down the road in 2 or 3 years. What the Democrats have proposed in that regard is very detailed, but I wanted to just go over some of the more important points, if I could. With regard to individuals in terms of individual tax cuts, basically we are proposing essentially a rebate that Americans get back 10 percent of what they earned in 2001 up to $6,000 of wages for a couple. This rebate is paid from the Treasury, not from the Social Security trust fund, because one of the other concerns that I have and all of us have as Democrats is not only do we do not want to increase the deficit, but we also do not want to delve into the Social Security and Medicare trust funds and aggravate the deficits that potentially could exist long term in those trust funds. We want to make sure that those trust funds have a surplus and that the money is available for Social Security and Medicare for senior citizens in the future. So our rebate plan does not tap any of the Social Security or Medicare trust funds. Let me give a little more detail about what the Democrats have in mind. The Democratic plan is $130 billion as opposed to the Republican plan, which is $600 billion. Now the $130 billion is a smaller plan because, again, we do not want to increase the deficit. We are trying to do everything in 2003 to stimulate the economy and not cause long- term deficits. But even with the $130 billion stimulus, we can create as many as a million jobs, increase consumer spending, and help States out of their fiscal straits because if the States have to significantly cut back on their budgets, that is going to be taking more money out of the economy and could also aggravate the problem in terms of Americans losing their jobs and not having money to spend. We have to address the States as well. The Democratic plan calls for a 26-week extension of unemployment benefits and a tax rebate of up to $300 per person, $600 per couple. It would also permit businesses to increase their write-off on new investments and provide $31 billion to State and local governments to help defray the cost of domestic security, Medicaid, highway projects and other programs. Just a little more detail because I do not want to get into all of the details tonight, but in addition to extending the unemployment benefits and offering a tax rebate, the plan would allow small businesses to write off up to $50,000 of the cost of new investments made in 2003 as opposed to the current maximum write-off of $250,000. The plan would also permit companies to depreciate 50 percent of the cost of new plants or equipment in 2003; current law permits them to depreciate only 30 percent. So we have a program that helps individuals by extending unemployment insurance for at least 26 weeks. We have a program that puts money back in consumers' pockets with the rebates that I mentioned, and we have a plan that helps small businesses, which is the backbone of our economy, to grow and invest in new production and create more jobs. Lastly, we have an answer that we think can make a difference for the States: as I said, $31 billion in State aid. The plan would give $31 billion to States which as I said are struggling with these budget shortfalls, a one-time increase in the Federal share of Medicaid payments amounting to $10 billion. It would also give them $10 billion in grants to help them pay for domestic security needs like airport protection and public health preparedness, as well as $5 billion in Federal aid for highways and $6 billion for critical State needs to help those most hurt by unemployment and the lackluster economy. So, as I said, Madam Speaker, the idea is to help individuals, help small businesses, and help the States. But all of it is designed specifically for the year 2003 to turn the economy around, to provide a stimulus, to create jobs. It is really a job creation program. If you look at what the Democrats have proposed, it is a job creation program. If you look at what the Republicans have proposed, it is a stock market-oriented program. And we know about the volatility of the stock market. I would venture to say that it is highly speculative. Even the White House will say that their dividend plan will not necessarily result in a significant increase in the stock market's performance. Yet they continue to make the highlight of their economic stimulus plan related to eliminating the tax on dividends. Again, I always say that rather than just listen to me, I would like to have some third-party validator of what I have mentioned this evening in the brief time that I have talked about the need for an economic stimulus. I saw an article, an op-ed that was in today's New York Times, also, by Paul Krugman. He basically criticizes the President's proposal and he talks about the Democratic alternative in a very succinct way. I would just like to read some sections of that now and include the op-ed in its entirety in the Record, if I could, Madam Speaker. It says: Here's how it works. Faced with a real problem--terrorism, the economy, nukes in North Korea--the Bush administration's response has nothing to do with solving that problem. Instead it exploits the issue to advance its political agenda. Right now a sensible plan would rush help to the long-term unemployed, whose benefits--in an act of incredible callousness--were allowed to lapse last month. It would provide immediate, large-scale aid to beleaguered State governments, which have been burdened with expensive homeland security mandates even as their revenues have plunged. Given our long-run budget problems, any tax relief would be temporary, and go largely to low- and middle-income families. That is what the Democrats want to do. What does Paul Krugman say? Yesterday House Democrats released a plan right out of the textbook: aid to States and the jobless, rebates to everyone. But the centerpiece of the administration's proposal is, of all things, the permanent elimination of taxes on dividends. So instead of a temporary measure, we get a permanent tax cut. The price tag of the overall plan is a whopping $600 billion, yet less than $100 billion will arrive in the first year. The Democratic plan, with an overall price tag of only $136 billion, actually provides more short-run stimulus. And instead of helping the needy, the Bush plan is almost ludicrously tilted toward the very, very well off. If you have stocks in a 401(k), your dividends are already tax- sheltered; this proposal gives big breaks only to people who have lots of stock outside their retirement accounts. More than half the benefits would go to people making more than $200,000 per year, a quarter to people making more than $1 million per year. Even the administration's economists barely pretend that this proposal has anything to do with short-run stimulus. Instead they sell it as the answer to various other problems. I do not want to keep reading, but the point I am trying to make is very simple. What the President appears to have done, and I do not necessarily want to give him bad intentions, is rather than doing a real economic stimulus that is going to have a short-term impact on the economy, turn the economy around and create jobs and put money back in people's pockets, he is trying to simply make more tax cuts primarily for the wealthy, for the corporate interests that are the primary backers of the Republican Party. And he does not even care about the fact that on a long-term basis this is only going to increase the deficit. I just cannot believe that this is the President's and the Republicans' answer to this economic downturn. I think that as Democrats, we have to do whatever we can over the next few weeks to bare this proposal for what it really is and to make it absolutely clear that this is not going to do anything to turn the economy around. Madam Speaker, I include the following for the Record: [From the New York Times, Jan. 7, 2003] An Irrelevant Proposal (By Paul Krugman) Here's how it works. Faced with a real problem--terrorism, the economy, nukes in North Korea--the Bush administration's response has nothing to do with solving that problem. Instead it exploits the issue to advance its political agenda. Nonetheless, the faithful laud our glorious leader's wisdom. For a variety of reasons, including the desire to avoid charges of liberal bias, most reporting is carefully hedged. And the public, reading only praise or he-said-she- said discussions, never grasps the fundamental disconnect between problem and policy. And so it goes with the administration's ``stimulus'' plan. Boosting a stumbling economy (``It's Clinton's fault!'' shouted the claque) isn't rocket science. All a sensible plan must do is focus on the present, not the distant future; on those who are suffering, not on those doing well; and on those who are most likely to spend additional money. Right now a sensible plan would rush help to the long-term unemployed, whose benefits--in an act of incredible callousness--were allowed to lapse last month. It would provide immediate, large-scale aid to beleaguered state governments, which have been burdened with expensive homeland security mandates even as their revenues have plunged. Given our long-run budget problems, any tax relief would be temporary, and go largely to low- and middle-income families. Yesterday House Democrats released a plan right out of the textbook: aid to states and the jobless, rebates to everyone. But the centerpiece of the administration's proposal is, of all things, the permanent elimination of taxes on dividends. So instead of a temporary measure, we get a permanent tax cut. The price tag of the overall plan is a whopping $600 billion, yet less than $100 billion will arrive in the first year. The Democratic plan, with an overall price tag of only $136 billion, actually provides more short-run stimulus. And instead of helping the needy, the Bush plan is almost ludicrously tilted toward the very, very well off. If you have stocks in a 401(k), your dividends are already tax- sheltered; this proposal gives big breaks only to people who have lots of stock outside their retirement accounts. More than half the benefits would go to people making more than $200,000 per year, a quarter to people making more than $1 million per year. (``Class warfare!'' shouted the claque.) Even the administration's economists barely pretend that this proposal has anything to do with short-run stimulus. Instead they sell it as the answer to various other problems. (It slices! It dices! It purees!) Above all, it's supposed to end the evil of ``double taxation.'' Now lots of income faces double taxation, in the sense that the same dollar gets taxed more than once along the way. For example, most of us pay income and payroll taxes when we earn our salary, then pay sales taxes when we spend it. So why has it suddenly become urgent to ensure that dividends, in particular, never be taxed more than once! That is, if they're taxed at all. In practice, the Bush plan would exempt a lot of income--rich people's income--from all taxes. Thanks to the efforts of lobbyists, today's corporate tax code has as many holes in it as a piece of Swiss cheese, and today's corporations take full advantage. Case in point: Between 1998 and 2001 CSX Corporation, the company run by the incoming Treasury secretary, John Snow, made $900 million in profits, but paid no net taxes--in fact, it received $164 million in rebates. This wasn't exceptional; the average tax rate on profits has fallen to a nearly 60- year low. Anyway, even to debate the pros and cons of dividend taxation is to play the administration's game, which is to change the subject. Weren't we supposed to be talking about emergency economic stimulus? No doubt the final version of the ``stimulus'' plan will contain a few genuine recession-fighting measures--a child credit here, an unemployment benefit there, a few crumbs for the states--for which the administration will expect immense gratitude. But the man in charge--that is, Karl Rove--is clearly betting that the economy will recover on its own, and intends to use the pretense of stimulus mainly as an opportunity to get more tax cuts for the rich. Ideology aside, will these guys ever decide that their job includes solving problems, not just using them? I yield to my friend from Oregon.

Mr. PALLONE. There is no question about that. Again, part of our Democratic stimulus package does provide for money to go back to the States for infrastructure, airports, highways, and the things that the gentlewoman mentioned. I think we are running out of time, so we are going to have to wrap it up; we only have a couple more minutes. But I just want to thank both of my colleagues. The bottom line is that this is just the beginning. The gentlewoman mentioned the media not comparing the different unemployment compensation packages. Part of it is because the Bush administration has not really said exactly what they are proposing. I gather from today that they are talking about 12 weeks, and we will find that out tomorrow. But we are going to have to insist beginning tomorrow that this package pass and pass in a way that is effective before we leave this week, let alone tonight. So I particularly appreciate the fact that my colleagues mentioned that, because I think it is something we are going to have to deal with literally tomorrow. But I thank my colleagues again, and we will continue to point out these differences between what the President is proposing and the Democratic stimulus package, not because it is partisan, but just because we honestly believe that the Republican proposal will not do anything to reverse the economic downturn.

Mr. PALLONE. And we did have votes today. We did have the adoption of the rules package. So it was not that we only had a ceremonial session. We did have votes. The other thing is that in the last few weeks I was hearing from some of our Republican colleagues about how maybe we did not even need to do it, to extend unemployment compensation because it has been going on too long, almost like it is some sort of welfare benefit or something. When the recession continues, and it is getting worse, there is no indication it is getting, things are getting better, it is only fair to extend it. I mean I could not believe I would even have to try to argue the case for it. But there are those on the other side of the aisle who do not think we should even do it.

Mr. PALLONE. Mr. Speaker, the amazing thing, we were trying, the Democrats insisted before we went home that we would stay here to pass a package, but of course the Republicans just adjourned. My understanding is, and I have not seen the proposal, I guess we may consider something tomorrow or Thursday, is that the Republicans are coming back with something like a 12-week extension which may or may not even be retroactive. That is a very short period of time, given what we are facing here. The Democratic proposal is for double that, basically 26 weeks, and goes back to December 28.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I rise today to draw attention to the disturbing rise in and acceptance of Anti-Semitism in the Arab world. An Egyptian satellite television station recently produced and is currently airing a new series that its producers openly acknowledge is partially based on a century old anti-Semitic tract entitled ``The Protocols of the Elders of Zion.'' ``The Protocols,'' which have long been dismissed by historians as false, are a work of fiction fabricated in czarist Russia to perpetuate and justify anti-Semitic violence and persecution. ``The Protocols'' were a series of 24 documents reportedly written by Jewish leaders that outline a plan for global domination by the Jewish people. They were later used again as anti-Jewish propaganda in Nazi Germany and are still used to this day by neo-Nazis and white-supremacist groups. The New Egyptian series, entitled ``Horse Without a Horseman,'' is looking to breathe new life back into this cornerstone of anti-Semitic hatred. The 41-episode television series, created specifically to air during the Islamic holy month of Ramadan, traces the history of the Middle East from 1855-1917. With a prime evening timeslot, the series is expected to have excellent viewership, as families gather at home to break the daily fast. This puts the series in the unique position to bring anti-Jewish sentiment into millions of homes throughout the Middle East. Israeli and American Embassy officials have raised concerns over the use of the fictional and inflammatory ``Protocols'' with the Egyptian government, but to no avail. With the increase in attention given to ``The Protocols'' in the Arab media, many believe that the imagery present in ``Horse without a Horseman'' is indicative of the rise in anti-Semitism in the Arab world since the September 11 terrorist attacks. Even here at home, The Arab Voice, a local Arab newspaper in New Jersey, recently printed excerpts from ``The Protocols.'' Despite knowledge that ``The Protocols'' are forgeries and have been used to incite anti-Jewish hatred and violence, the editors of The Arab Voice called ``The Protocols'' an ``educational tool'' for their readers. The irresponsible decision by The Arab Voice to give credence to ``The Protocols'' by reprinting the falsehoods in their paper only fuels and further perpetuates the tension between the Arab and Jewish communities. At a time when the American-Arab and Jewish communities could be making an effort to improve communication and cooperation, The Arab Voice's printing of ``The Protocols'' is both irresponsible and inflammatory. I ask my colleague to join with me in condemning ``Horse without a Horseman,'' The Arab Voice and any perpetuation of anti-Semitism either abroad or at home. It is critical that we remain vigilant and not allow attempts to spread hatred to be ignored or continued.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I would like to take this opportunity to express my concerns regarding the Pakistani Parliament and in particular, the efforts of the Islamic alliance to form a governing coalition in Parliament with either the King's Party, led by President Musharraf, or the People's Party, led by Benazir Bhutto. Mr. Speaker, during Parliamentary elections held in Pakistan last month, members of the Pakistani religious bloc known as the Islamic allies unexpectedly won 60 out of 342 seats. Not only was this surprising, but furthermore, the outcome of the elections was divided in such a way that no party won the number of seats necessary to form a government. As a result, the Islamic allies have been negotiating separately with the pro-Musharraf party and the Bhutto party in an effort to form a coalition and thereby create a majority. Their intent is to demand a reversal of constitutional amendments introduced by Musharraf earlier this year, and most importantly, to overturn the amendment that allows Musharraf to dismiss Parliament. However, what concerns me greatly is that the members of this Islamic alliance, or this Pakistani religious bloc, won their seats based almost exclusively on an anti-American platform. In fact, this party's primary campaign message criticized Musharraf's support for the war on terror and denounced Musharraf's cooperation with the United States. In addition, a component of this party's message demanded that the U.S. military leave Pakistan and Afghanistan immediately. Lastly, the Islamic allies have encouraged Pakistanis to offer sanctuary to both the Taliban and Al-Qaeda and to embrace the work of Osama bin Laden. Mr. Speaker, I believe that for these reasons, it is imperative that Pakistan's religious bloc remain unsuccessful in forming a coalition with Musharraf's party or Bhutto's party. If in fact this party gained a majority and was able to implement its anti-US policies, the consequences would be devastating. At this stage, it does not seem as if the religious bloc will be able to achieve forming a government. However, Mr. Speaker, it is in the best interest of the U.S. to monitor this situation closely.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I rise today to call on the London Metropolitan Police Commissioner Sir John Stevens to expeditiously complete the report on the February 1989 killing of Pat Finucane in Belfast. Sir Stevens has been investigating this case for almost 3 years. Pat Finucane was shot and killed by British-Loyalist paramilitaries while he sat eating a Sunday meal with his wife and three children. Since his murder in 1989, Amnesty International and the United Nations have called on the British Government to investigate any collusion between the RUC/British Government officials and the Loyalist paramilitaries. Unfortunately, after 3 years of investigation still no report has been made public. Prior to being murdered, Mr. Finucane was a human rights lawyer who defended several individuals that were detained by the RUC. According to the UDA, Ulster Defense Association, which claimed responsibility for his murder, Mr. Finucane was profiled as an individual who was helping support the procatholic, pro-Republican cause in Northern Ireland. Last week, Sir John Stevens announced, for a second time, that the Finucane report would be delayed as a result of a British military witness being reluctant to speak to the police. Stevens claims that the report will be released `before next spring', however, there continues to be speculation that the report may be delayed further should a public inquiry be ordered. There are few who will dispute the facts in this case. According to Brian Nelson, a former British military intelligence agent who also served as chief intelligence office of the UDA, he directly assisted in the targeting of Pat Finucane and passed a photograph of Pat Finucane to a UDA member just days before the killing. However, Mr. Nelson claims have never been examined in an open court. To date no one has been prosecuted for the murder of Pat Finucane. The facts in this case seem quite straighforward--once again a pro- Loyalist police force used its authority to further sectarian rule and continue the rash of violence against the Catholic Community. I call on Prime Minister Tony Blair and London Metropolitan Police Commissioner Stevens to finally release the current report and then immediately open a full public inquiry into this matter. My hope is that by putting an end to this long drawn-out process we can bring both justice to the individuals who undertook this gruesome act and take steps to ensure that this doesn't happen again. This whole matter once again reinforces my belief that for too long both the British government, along with their police force, and the Loyalist paramilitary groups in Northern Ireland have worked in tandem to usurp the rights of the Catholic Community. A full public inquiry into this matter will show the world that the only way peace can last in Northern Ireland is for a full fair and just reform in policing in Northern Ireland. Northern Ireland must immediately implement all of the Patten Commission's recommendations on policing. Mr. Speaker, if there is to be a just and lasting peace in Northern Ireland we must learn from what happened to Pat Finucane and ensure that it never happens again.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I rise today in opposition to the rule. I have to say the idea of having a new Department of Homeland Security is a good one, but it should not be at the detriment or to the detriment of hardworking government employees. Mr. Speaker, this so-called compromise, and I do not think it is a compromise at all, it does not go far enough to ensure the rights of workers in this new department to collectively bargain. Once again, this is just another attempt by the Republican Party to use back channels to destroy the Americans workers' right to organize. The bill adopts the President's proposals to waive all of the provisions of the civil service laws for employees of the new department, and it would permit the President to strip employees of their union representation for any national security reasons. Basically, it is eliminating effectively the right to collectively bargain. Why is this necessary? Why in the minds of the administration is this necessary? Historically, civil service has been a way of preventing abuse on the part of the President and the executive branch, and I do not see any relationship between national security and the war against terrorism and workers' rights. There is absolutely no reason to suggest that for national security reasons or because of the war against terrorism that we have to eliminate or cut back on workers' rights. I think what is really happening here is there is an ideological opposition on the part of the President and the Republican Party to collective bargaining, to union representation, to civil service. It is very troublesome to think that is the case and that somehow national security or the war against terrorism is being used by this administration, the Republican leadership, as an excuse to work their idealogical will against government employees. They should not do that. They should not use this, so to speak, as the excuse to basically cut back or eliminate workers' rights. I know that there is a rush to pass this. Everyone says we have to have this new department. It is certainly true that we do. But I do not think that those of us who care about workers' rights, who care about collective bargaining should simply say that is okay, that in the name and in the rush to create this new department that somehow we should eliminate workers' rights. Mr. Speaker, I urge opposition to the rule and opposition to the underlying bill.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, this is the ultimate Republican do-nothing Congress. I woke up this morning, and I called the cloakroom; and I could not believe that they are going to simply pass a CR to carry the government over until January with the new Congress and not address all the pressing problems that we need to look at here. First of all, think about the fact that we have a budget crisis. We have a budget deficit now, it was announced a few weeks ago, of $150 billion. The effect on the economy, the downward trend on the economy that this will contribute to is unbelievable. Now, as the gentleman from Wisconsin (Mr. Obey) says, we may be adding another $30 billion to that because of the fact that we are wiping out these PAYGO provisions. So more deficits. We are in an economic downturn. Mr. Speaker, what is the Republican Party going to do here? What is the Republican leadership going to do about the economic slow down? Are they going to deal with the fact that we have a higher unemployment rate, that a lot of people's benefits for unemployment will end sometime in December? Are they going to address that? Are they going to address the fact that seniors are crying out for a prescription drug benefit? I read in the paper the other day that the President said he wants to address the need for a prescription drug benefit. Then why are we going home? Why are we not dealing with it? Why are we not figuring out how to pay for it? The energy crisis. We face a major energy crisis. I understand a conference report on the energy bill has been filed. Is it going to be taken up today or tomorrow before we leave town? Mr. Speaker, so many of these issues are not being tended to. The Republicans have only passed two appropriations bills, the Defense and Military Construction; and I do not mean to suggest that they are not important. Of course, they are very important because the President is saying that we may have to go to war against Iraq. But what about the budget consequences of that? Where is the money going to come from? Why are we not dealing with the budget in general and having some kind of budget conference where we sit down on a bipartisan basis between now and the end of the year and figure out how to pay for defense? How we are going to pay for these other important domestic issues? Now, the Republican Party does not want to address it. They say, oh, we won the election so we will just wait until January. We will have a majority in both Houses, we will have the Presidency, and we will deal with it then. Mr. Speaker, it is a complete abdication of their responsibility, and it is not what they said during the course of the election when they said they were going to address these things. We have another 6 or 7 weeks here when we could address these problems, both domestic and international; and it is terribly irresponsible for the Republicans to say, no, we are not going to do that; we are simply going to go home. No one should be confused about what is going on here today. They are simply passing a continuing resolution so the government does not shut down, and coming back in January with the new Congress. That is completely unacceptable and irresponsible. This Congress under the Republican leadership, this House, has the worst legislative record in the whole history of the United States Congress, and this act today of trying to pass this rule just confirms it.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, the Republicans are about to take up a CR that keeps the government going until January 11. What they are not saying is that they are abdicating their responsibility to govern. The Republican leadership in Congress has achieved one of the worst legislative breakdowns in the Nation's history. Of the 13 fiscal year 2003 appropriations bills, Congress will complete before the end of this session only Defense and Military Construction. Everything else is being carried over until the next year. A review of the past half century of legislative calendars shows nothing close to such nonfeasance. Even in 2000 when Congress approved 21 continuing resolutions before completing its work December 15, the House at least had passed each of the 13 appropriations bills. What is happening now is we are simply abdicating our responsibility. The Republicans do not want to do anything. They simply want to wait until the new session of Congress. But the fact of the matter is that we have a responsibility to pass the budget, to pass the appropriations bills, to deal with them now, and to work between now in November as well as in December, not simply wait until the next session of Congress to address all of these issues.