The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“ECONOMIC STIMULUS” mentioning the Federal Reserve System was published in the Senate section on pages S478-S480 on Jan. 30, 2008.
The publication is reproduced in full below:
ECONOMIC STIMULUS
Mr. BAUCUS. Madam President, the psalmist prayed:
Do not cast me off when I am old. Do not forsake me when my strength fails.
That is really the question before us as we get to the economic stimulus bill, which is the bill that is going to send out rebate checks to Americans: Will the Senate cast off 20 million seniors? Will the Senate forsake 20 million of the neediest Americans?
A vote for the Finance Committee substitute is a vote for 20 million American senior citizens who have worked hard all their lives, who have paid taxes for a lifetime. They contribute to the economy today. But the underlying House-passed bill would not give them a rebate check.
The House-passed bill says no to 20 million American seniors. The House bill gives checks only to the more affluent seniors whose incomes are high enough that they pay taxes now. The House-passed bill would not give a stimulus check to seniors who are scraping by on Social Security income alone and have no tax liability. To state it differently, the House-passed bill says no to the most neediest seniors, not only 20 million American seniors, but the House bill says no to the 20 million American seniors who happen to be the most needy. These 20 million seniors have given a lifetime of labor. They have given a lifetime of service, and they have paid a lifetime of taxes. The House-passed bill would not give them a stimulus check.
Think of a grandmother who needs money for food, medicine. America's economy is slowing down. Times are getting tough for her. Prices for food, gasoline, and home heating oil have skyrocketed right before our eyes. She has a harder time making ends meet. For many of our Nation's senior citizens, their only source of funds for these necessities is a once-a-month envelope from Social Security. Any Social Security beneficiary will tell that you she has not seen the amount of her check increased enough to cover today's rising costs. I am sure the benefits may be going up a little bit, but they clearly do not cover the increase in rising costs. Again, the Finance Committee package says yes to those 20 million American seniors who we believe should be included. They should also get a rebate check. The House-passed bill says no to those 20 million American seniors. It says to seniors who happen to be the most needy, no, we are not going to give you a rebate check. That is the basic reason why I believe the Senate Finance Committee package passed today is by far the better alternative.
Just think, when Congress acts on an economic stimulus package this week, tomorrow, whenever it is, we should insist on that tax rebate for the 20 million low-income seniors who can use that money right now. A rebate for seniors is no feel-good measure. Obviously, it is the right thing to do. Rebates for 20 million more seniors will help the economic stimulus package work better. Why is that? Because seniors are among America's most likely to spend a refund right away and pump cash back into the economy.
This chart basically demonstrates that. According to the Bureau of Labor Statistics, Americans over age 65 are responsible for over 14 percent of all consumer spending. People over 65 spend 92 percent of the their yearly incomes. That is represented by the horizontal bar in blue, a little bit of purple over on the right. So people over 65 spend 92 percent of their yearly income. People over age 75 spend 98 percent of their incomes. That is higher than any other demographic group over the age of 25.
Seniors spend the money they receive. They have to, in most cases, spend the money they receive. It is the right thing to do, to give senior citizens access to that rebate check. Why exclude them? Why cut seniors out as the House does? That is not right. In addition, seniors spend the money they receive. Seniors over age 65 spend 92 percent of the money they receive, and seniors over 75 years of age spend 98 percent of the income they receive. So seniors will spend that rebate check right away. That will make the rebate check all the more effective in helping the economy.
The Senate needs to do the right thing by America's seniors and by the American economy. We should extend the tax rebate to 20 million American senior citizens living on Social Security. The Finance Committee substitute will help 20 million seniors who were left out of the House bill. The Finance Committee amendment will provide seniors with a rebate check of $500 and $1,000, if they are married.
What is more, the Finance Committee amendment helps a quarter of a million disabled veterans with rebate checks. So far I have talked only about senior citizens. The House-passed bill does not give rebate checks to disabled American veterans. The House bill does not provide low-income disabled veterans rebate checks. That is, the House bill does not give rebate checks to a quarter of a million, and that is because they do not provide low-income disabled vets with rebate checks.
The House discriminates against lower income seniors, 20 million American seniors. It discriminates against lower income disabled vets. It says no to a quarter of a million disabled veterans. We in the Finance Committee say, no, we should say yes to seniors. We should say yes also to disabled veterans who will get the same rebate check as an upper income disabled vet.
What is more, the Finance Committee amendment helps people who have lost their jobs. Don't you think that is the right thing to do, help people who have lost their jobs, particularly as we are either in a recession or close to a recession? The Finance Committee amendment provides an additional 13 weeks of unemployment insurance, and high unemployment States will qualify for an extra 13 weeks. The House bill does not provide an extension for unemployment insurance. It says no. It says, no, I am sorry, too bad. If you have lost your job and your 26 weeks is already up, which is the case for a higher proportion of America's unemployed today than at any other time in recent history, the House says, no, sorry. Even though you need the money, even though you would have clearly spent the rebate check, they say, no. The House bill doesn't provide that extension.
There are almost a million more unemployed Americans than there were unemployed a year ago. The Congressional Budget Office found that unemployment insurance has a great bang for the buck. That is, people who are unemployed who receive their unemployment insurance spend it. In fact, economy.com, a company which analyzes these things--their person testified today or yesterday before the Budget Committee--found that each dollar spent on extended unemployment insurance benefits would generate $1.64 in increased economic activity. That is a good one. In straight economic terms, for every $1 spent, $1.64 is the result in increased economic activity.
The bipartisan stimulus bill enacted after 9/11 included an unemployment insurance extension. President Bush signed that extension. Why don't we do it now? We all know what dire straits the economy is in. The Federal Reserve system cut the Fed funds rate another half percent. When you add it up in the last 4 or 5 months, 1 percent plus three-quarters plus another half, what does that amount to? That is a 2\1/4\-percentage points reduction in the last several months. They are worried. But those rate cuts take time to work their way through the economy. An economic stimulus package has an effect right away. That is why we believe we should have components in the economic stimulus package which improve upon the House bill and give 20 million seniors rebate checks and a quarter of a million disabled vets rebate checks and also extended unemployment benefits.
The Finance Committee amendment helps American businesses that need help. The Finance Committee amendment would extend what is called the carryback period for net operating losses from 2 years to 5 years. Why is that important? Generally, a cyclical business has some profitable years followed by loss years. During loss periods, the company will carry back the net operating losses for the lost years to the prior profitable years. They will file a quick refund claim. The quick refund claim acts as a cash infusion and allows the company to survive the loss period. The House bill doesn't take care of that. The housing industry would greatly benefit from an increased carryback period.
This whole economic downturn was sparked by a so-called subprime problem, the housing problem, a glut of houses. And the expanded period would allow builders to avoid selling land and houses at distressed prices.
Additionally, it would enable less costly financing, improving business conditions for an eventual return of the housing market. The expanded period would give the housing industry cash to meet payroll. That is not a bad thing to do when we are in an economic downturn. That would stop additional job losses. The National Association of Manufacturers has written us in the committee in support of the Finance Committee's net operating loss proposal because they know it is the right thing to do to help maintain jobs.
These are all good reasons to vote for the Finance Committee substitute. It would help disabled veterans. It would help unemployed Americans. It would help businesses struggling with the business cycle. It would help 20, I think the figure is 20 million American senior citizens. I start where I began. I repeat this point because it is so important. The biggest difference between the Finance Committee substitute and the underlying House bill is 20 million seniors. A vote for the Finance Committee substitute is a vote for those seniors. Keep this in mind: 20 million, right here. That is the number of seniors to whom we would give rebate checks because it is the right thing to do, to add 20 million to the House-passed bill, which does not give rebate checks, which is clearly the wrong thing to do.
Senators should not cast off seniors. Senators should not forsake them. Rather, let us recognize their lifetimes of labor, recognize their key role in stimulating the economy. Look at our senior citizens. They are the real salt, the rock of America. Our mothers and fathers and grandfathers, most of them passed through the Depression era. Some are a little old for the Depression era, but they have values that are so important for our country. They are the people who paid taxes all their lives. They worked all their lives. They provided service to so many of us and our families and to other neighbors in the community. Let us recognize their key role in stimulating the economy, and let us pass the Finance Committee substitute for those 20 million American seniors.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. HARKIN. Madam President, I ask unanimous consent that the order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
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