Supporting the President's Budget
Delivered on the floor of the United States Senate
Next week the Senate will consider the Budget Resolution for fiscal year 2010. This will be a crucial debate.
For 50 hours on the Senate floor we will make fundamental decisions about the shape of our economy – and the prosperity of our county – that will guide our nation for many years to come.
We need to face facts -- we have inherited the worst economic crisis in generations.
Passing the economic recovery package was the first step to getting our economy back on track, but there is much more to do.
The next step is passing a smart, fair and responsible budget that makes our economy work again.
President Obama has proposed a budget that does just that -- it restores fairness for middle class families, it re-establishes responsibility in the budgeting process and it makes smart investments in America’s future.
This budget begins to repair years of neglect in national priorities, and makes critical investments that we need in order for our economy to recover -- particularly in the areas of energy, education, and health care.
President Obama has proposed a return to the balance our country once enjoyed – careful investments in our future, while protecting working families who have lost ground over the last decade.
Smart Investments in America’s Future
If we fail to make a number of critical investments now, we impair our nation’s ability to recover.
Many economic experts tell us that in order for our economy to fully recover and for our nation to take the leading role that we for so long enjoyed, we must:
- Lessen our dependence on foreign oil and develop renewable energy sources that reduce costs and create jobs
- Make it more affordable for more Americans to attend college and compete for good jobs in a global economy, and
- Address health care costs that hurt families and make it unaffordable for small businesses.
This budget allows for critical investments in health care.
The President’s budget would begin the transformation of our health care system by allocating more than $630 billion over 10 years for fundamental health care reforms.
The budget would support the adoption of health information technology and the widespread use of electronic health records.
It would expand funding for research that compares the effectiveness of medical treatments, so that patients and physicians have better information on what works and what doesn’t.
It would invest $330 million in training the doctors, nurses, and dentists we need to fill shortages of health professionals, especially in rural communities.
It would invest over $1 billion to step up food safety efforts at the Food and Drug Administration to prevent and control food borne illnesses.
These investments would come when we really them.
Over 47 million Americans are without health insurance. Nearly one million families in Illinois have at least one uninsured family member, including 360,000 families that earn over $50,000 in income.
Being uninsured is no longer only the concern of the poor – it is a risk for all of us.
Doug Mayol’s story
Americans like Doug Mayol of Springfield, Illinois know this all too well.
Since 1988, Doug has owned and operated a small business in downtown Springfield that sells cards, gifts, and knick-knacks. He is fortunate that his only employee is over 65 and qualifies for Medicare and also receives spousal benefits from her late husband. If this were not the case, Doug does not think he would be able to provide her with health insurance.
As for himself, Doug knows that because he has a pre-existing condition he faces the real possibility of becoming uninsured. Almost 30 years ago, Doug was diagnosed with a congenital heart valve defect. He has no symptoms, but without regular health care he is at greater risk of developing serious problems.
Like most Americans, his health care premiums have risen dramatically in recent years. In 2001, he paid $200 a month. In 2005, he paid $400. After he turned 50 the next year, his rate shot up to $750 a month.
To keep his insurance affordable, he chose a smaller network of providers and a higher deductible to bring his monthly cost back down to $650. But then last year his monthly payment jumped to $1,037 a month. Only by taking the highest deductible allowed was he able to bring the cost down to $888 each month.
Doug isn’t even a costly patient. With his high deductible, his insurance company has never paid a claim for illness or injury beyond routine primary care. Yet his costs have exploded.
But yet he can’t afford not to have health insurance. Because of his faulty heart valve, he needs antibiotics before undergoing even a simple procedure, like dental work.
Though Doug should see a cardiologist periodically, he avoids it because he fears it would add another red flag to his medical record.
Why, in the wealthiest nation on earth, do we accept a system in which a small businessman with insurance has to delay preventive care simply to avoid the short term costs, even though the long term costs could be far greater?
All Americans want the best healthcare system in the world.
Yet we all know that health care reform is no easy task.
The process will be complicated. We will all have to compromise. We will all have to work together to find a workable solution.
But we must start by laying the financial foundation for the large-scale change we need. This budget would do just that.
The President’s budget also offers a promising vision for education.
The budget provides funding for innovations in the classroom,
… improved student assessments,
… teacher training,
… principal preparation,
… programs that reward strong teacher performance, and
… a significant expansion of early childhood education.
These initiatives will help us build the education system we need to compete in the global economy, not just today, but in the next generation.
And the budget would change the way we finance higher education in this country.
The budget would finally end the Federal Family Education Loan, or “FFEL,” program that has been proven to be expensive, inefficient, subject to corruption, and ultimately a bad choice for students.
It certainly was an unfortunate choice for Holly Clark from Chicago.
Holly Clark’s story
Holly wanted to be a teacher. To pay for college and graduate school, she borrowed over $60,000 in student loans.
She chose the FFEL program because she thought she would lock in relatively low interest rates until she was able to pay the loans off in full.
Because of fluctuating interest rates and changes in the program, however, she now pays 7.5% in interest each year, which is a higher rate than she pays for her mortgage.
Holly heard about a federal program that encourages teachers to work in a low-income school for five consecutive years by forgiving a portion of the debt. She taught for four years in an inner-city school, but then the school administrators left and the school became extremely unsafe. She left that job. But she still has her loans. And she’s not sure she’s going to be able to repay them without giving up her teaching career.
Elimination of FFEL
We can do better for people like Holly Clark. The FFEL program has proven to be costly to taxpayers and sometimes unfair to borrowers.
The President’s budget proposal shifts the origination of student loans to the Federal Direct Loan program, starting in July of next year.
That change saves taxpayers $94 billion over the next decade. And the Direct Lending program will ensure that students like Holly who would like to work in a public service job after graduation are getting the best deal, without a middleman, when lining up loans for school.
The budget will also make spending on Pell Grants mandatory, freeing this essential student aid program from the political process and indexing the grants to inflation.
We can’t transform our education system overnight into the kind of world-class preparatory process that our kids deserve and that we need in today’s global economy.
But we can start to provide the investments and the programs that will help to get us there soon. This budget would do just that.
The President’s budget also provides a down payment on weaning America from our dependence on foreign energy.
The President lays out an aggressive path to reduce the consumption of fuels that are contributing to climate change.
Left unchecked, scientists predict that global warming will lead to more heat waves and droughts over the next century,
… result in lower agricultural productivity,
… threaten coastal areas from sea level rise,
… increase severe storms and flooding, and
… reduce biodiversity.
These changes would have multiple ramifications, redistributing food, clean water, energy and even people as crises lead to emigration. Our own national security is affected.
President Obama’s budget proposes a cap and trade system to reduce greenhouse gas emissions. We can reduce emission by 14% below 2005 levels by 2020, and by 2050, we can cut emissions by 83% below 2005 levels.
The revenue generated from auctioning greenhouse gas emission allowances would be used to fund tax cuts for working families and for programs to green the economy.
And, $150 billion over ten years would be used to develop clean energy technologies that would create jobs while helping us to reduce our greenhouse gas emissions.
If this budget had already passed and this funding was already available, Lee Celske (Sell-ski) of Aledo, Illinois might have been able to put a small portion of that funding to good use.
Lee Celske story
Lee has figured out how to create temporary green houses out of recycled glass. These houses are cheap -- about $30,000 -- quick to assemble and he thinks a good option for communities recovering from natural disasters. These are energy efficient temporary homes that could withstand a Category 5 hurricane.
The factory that makes the house shells would employ 30 high-tech, high-paying, green-collar workers.
Over the past 14 months Lee has pre-sold nearly $2 million worth of houses, relying on loan guarantees from his bank that would underwrite the factory once sufficient sales were in place.
But then, suddenly, the bank pulled the financing.
Lee has done nothing wrong. The small company is ahead of schedule on its growth targets, and would create precisely the kind of green jobs that America should be developing.
Yet his progress has been stopped cold by the freeze in the credit markets.
The President’s budget would help finance these entrepreneurs in the green economy.
This budget can create good jobs, strengthen national security against the threats that energy dependence creates, and protect the environment before climate change inflicts permanent damage.
These are investments we have to make now to reap the benefits in the future. This budget would do just that.
Tax Relief for the Middle Class
The President’s budget also keeps President Obama’s pledge to provide a tax cut for every American family earning less than $250,000 per year.
95% of Americans will not see their taxes increase a single penny under his budget.
After eight years of stagnant wage growth for the middle class,
… with costs for health care, education, and energy steadily outpacing wages,
… with the unemployment rate above 8% and growing,
… and with as many as 13 million families at risk of losing their homes to foreclosure,
…American families need a break.
This budget would do just that.
Rebutting the Criticisms: Spending Too Much
Here’s what this budget would not do: spend too much, tax too much, or borrow too much.
My Republican friends have said over and over again that this budget would “spend too much.”
Here’s my question: if the government doesn’t spend right now, who’s going to?
A recession is, by definition, two or more quarters of negative growth. We’ve now had five negative quarters.
Businesses aren’t making equipment purchases, and households are cutting back on spending.
In short, no one wants to buy anything.
If no one wants to buy anything, how can anyone sell anything?
If no one can sell anything, how is the economy going to recover?
To combat this vicious recessionary cycle, the government has to replace some of that lost demand.
That’s what the $787 billion American Recovery and Reinvestment Act was all about. And that is the effect that the tax cuts and the spending in this budget will provide.
But this budget doesn’t just spend money for the sake of spending money. These are targeted investments in the areas that will yield the greatest benefits: health care, education, and energy.
A smaller federal budget during a recession as severe as we’re in would only slow demand further. The economy would continue to shrink. And the help we need – bringing health care costs under control, strengthening education, and weaning the country off foreign oil -- would suffer even further neglect.
This budget does not spend too much.
Rebutting the Criticisms: Taxing Too Much
My Republican friends also have said that this budget would “tax too much.”
Since 95% of Americans would not see their taxes increase by one penny, apparently the critics of this budget are worried about the taxes that the richest 5% of Americans will be asked to pay.
Haven’t we seen enough recently about how well the wealthiest people in America are compensated?
I recognize that not every wealthy American has contributed to the drowning of the American economy, and not every wealthy American pulls down a hefty bonus each year.
But we are all in this together. And we are asking those who are doing quite well to share just a little bit more in the sacrifices that all other Americans are making to help put the country back on track.
What the President has proposed is reasonable. 95% of Americans will pay the same or less in income taxes.
No one in America will pay more in taxes than what they would have paid during the Clinton Administration.
And to those who say that raising taxes on anyone is a sure way to ruin the economy, look back to how our economy performed in the 1990s.
Most Americans would trade the prosperity of late 1990s with this economy of the last decade.
This budget does not tax too much.
Rebutting the Criticisms: Borrowing Too Much
My Republican friends also have said that this budget would “borrow too much.”
Where was this concern about our nation’s debt during the last eight years?
Where was this worry about borrowing too much when massive tax cuts were being shoved through Congress using the very reconciliation procedures that the other side is now complaining about?
Where was this worry about borrowing too much when nearly all of the Republicans voted to permanently repeal the estate tax, which would cost the American taxpayers $1 trillion se they provide a tax break to the wealthiest ¾ of 1% of Americans?
Where was this worry about borrowing too much when the Bush Administration turned the budget surplus it inherited from the Clinton Administration into the largest pile of debt this nation has ever seen?
I worry about the debts we are leaving for our children and grandchildren.
But I believe that if we invest now to turn the economy around more quickly, we will be in a much stronger position to address our long-term fiscal challenges.
I won’t accept criticism about the amount of debt we face from the party that ran up that tab in the first place.
Preparing a budget is about making choices.
It is a moral document, one that describes what you believe in.
President Obama has proposed a budget that would make critical investments in our nation’s highest priorities, at a time when America needs them most.
This budget would provide a little bit of help to hard-working families that desperately need it.
This budget would bring true, long-lasting change to America.
I urge my colleagues to support it.
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