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Murray Calls For Financial Jumpstart, Long-term Economic Planning

Jan 31 2008

In Senate floor speech, Senator calls for quick stimulus now, but urges investment in infrastructure, housing and youth employment

(WASHINGTON, D.C.) – U.S. Senator Patty Murray (D-WA), a member of both the Senate Budget and Appropriations Committees, today spoke on the Senate floor about the need for both a short-term jumpstart to the economy and a pro-active and forward-looking plan to ensure economic strength well into the future. 

"Every family knows that ignoring the need to spend wisely on things you depend on, and failing to live within your means, is a recipe for serious trouble down the road," Murray said.  "So while the economic stimulus we are working on today will do a lot of good in the short term, we have to insist that we deal with the real cause of our economic trouble."  

As Congress awaits the delivery of the President's budget on Monday, Murray urged investments in roads and infrastructure, housing counselors and programs that help get teens into the workforce and increase their employment opportunities well into the future.

"It’s time to take a lesson from American families, to balance the budget, to be honest about the true costs of the war, and think seriously about how to go forward.  It’s time to insist that the federal regulators who are supposed to watch out for economic troubles actually do their jobs.  And it’s time to stop ignoring our needs at home."

The full text of Senator Murray's floor speech follows:

Our Economy Needs a Jumpstart

Mr. President, in the last two years, millions of Americans have seen their primary source of wealth – their homes – plummet in value. As many as 2 million mortgage holders may lose their homes in the current subprime crisis.  And investors around the world are concerned about the state of our economy.

In my home state of Washington – and across the country – people are worried.  

Americans are losing their jobs, and they’re struggling to make ends meet - to buy groceries, to pay their power bills, and afford health insurance.

With our markets in decline, we have the opportunity now to give our economy a jumpstart and help prevent a full-fledged recession. Experts say that taking action now to stimulate the economy by giving millions of taxpayers a rebate could help increase production and lift employment.

Businesses – especially American manufacturers – need people to buy their products.  And Americans need money to spend.  

I believe that a quick stimulus bill that gives Americans some of their tax money back could make a real difference.  But we also must ensure that whatever action we take is temporary and targeted where it can do the most good.  I’m optimistic we can do that.

I want to thank our House colleagues for coming to a quick agreement with the President on a stimulus package.  Their proposal is a very good start. And I want to thank Chairman Baucus and Ranking Member Grassley for getting to work immediately on a Senate plan.  I hope we can all agree, get a bill to the President by Feb. 15, and get the economy moving again.

Economists Say a Stimulus Is Needed

Mr. President, in the last several days, I’ve talked with several economists who have appeared before the Budget Committee.  They’ve shared their analysis of what Congress can do to prevent our economy from a full recession, and I think the legislation passed by the Senate Finance Committee largely meets their recommendations.

The Finance Committee’s bill would give middle and lower-income Americans a $500 rebate check. It ensures seniors who receive Social Security will get a rebate.  It extends the rebate to ensure disabled veterans who wouldn’t otherwise qualify for a rebate, aren’t left behind.  And – I think this is particularly important – it restores the income cap, so that the rebates will go to the people who need it most.

Mr. President, any bill that we pass must ensure that the rebates are targeted at seniors and working families. They are the backbone of our economy.  They are the ones who need the money most, and they are the most likely to spend it.  You can be sure I’ll fight any proposal to change those provisions.  

But I want to add a few words just to underscore the importance of including seniors in this bill.

More than 20 million seniors depend on Social Security for their income.  And they spend 92 percent of it – a greater proportionate share than all other adults.  Seniors are among those hurt worst during an economic downturn because of increasing health care costs.  And – as our Finance Committee chairman has pointed out – seniors have worked hard all their lives, they paid taxes all their lives, and many of them still pay sales, property, and other taxes.

So, Mr. President, leaving seniors out of any stimulus bill would overlook their importance in our economy, it would make our stimulus bill less effective, and – most important – it would be enormously unfair.

We Also Need Longer Term Investments

Mr. President, I’m encouraged by the progress we’ve made so far.  I think a temporary, targeted stimulus is the shot in the arm our country needs. And I’ve been pleased to see that the President has been willing to work with Congress. But I also believe there is a great deal more that we can and should do that would help millions of struggling families and turn our economy around over the longer-term.  And I know many of my colleagues agree.

So I hope that the President continues to see the value of working with us on longer-term investments that will pay off for years to come.   

Summer Jobs

One investment I have high hopes for is a summer jobs program for teenagers.  The unemployment rates for teenagers have jumped in the past year.  For all teens, it’s 17 percent – up from 13 percent in December of 2006.  Among African-Americans, ages 16 to19, it is almost 35 percent as of last month.

Mr. President, a summer jobs program would have a number of immediate and long-term benefits.  

Teenagers are likely to quickly spend all of the money they earn, so it would provide an immediate economic stimulus.  A summer jobs program also would help begin to create a new generation of workers.  And research shows that teens who get work experience earn more over their lifetimes.  

Last November, I held a field hearing of my HELP Subcommittee on Employment and Workplace Safety at South Seattle Community College.  We focused on the need to create multiple pathways to career success for young workers.  Representatives from the private sector and organized labor talked about the need for a new generation of skilled workers, while students said they aren’t getting enough information about their career options and opportunities.  I heard about the real need for green-collar workers – and the dire need for skilled trade-workers who drive our communities’ economic engines.

Quite frankly, Mr. President, attracting these young people to our labor force is something that I believe is vital to the economic future of our nation.  

But Mr. President, the summer jobs program has one other benefit for our communities.  Teens with jobs are also less likely to commit crimes or join gangs. 

Mr. President, a columnist for the Seattle Post-Intelligencer recently wrote a story about a 17-year-old boy, who was killed earlier this month in what police believe, was a gang-related shooting.

The columnist, Robert Jamieson, interviewed some of the boy’s friends for the piece.  One friend said the boy had applied for nearly a dozen jobs, but just couldn’t get anyone to call him back, so he turned to other means.  

Mr. President, tragically, too many of our young people face the same choice – between joining a gang, and sticking with a discouraging job search.  

I think that story illustrates why a jobs program for our young people is one of the most important investments we can make in the near future.  

I want to work with my colleagues on a bipartisan basis to provide the opportunities and the resources to ensure that this generation of workers – and the next – has the skills that employers need to compete in the global economy.  

Infrastructure

Mr. President, I also believe we can create jobs and stimulate the economy by making desperately needed investments in our infrastructure, including: our roads, bridges, levees, and mass transit systems across the country.  

Investing in our infrastructure would create jobs and increase spending on construction materials, immediately infusing millions of dollars into our economy. For every billion dollars in federal spending on highways and transit alone, we create a whopping 47,500 jobs.  These investments would pay off in the long-term as well, by helping ensure our roads, bridges, and mass transit systems are safe and strong.

Homeownership

Finally, we must do more to address the housing crisis that has spread across this country.  While the economy may be headed toward recession, the housing market is in a depression.  

According to the New York Times, the number of homes set for foreclosure is higher than any time since the Great Depression.  We are seeing communities in this country where people are literally abandoning their homes because they can’t afford their mortgages, and they can’t find a willing buyer.  

Homeownership has always been a sign of prosperity in our country.  But for millions of Americans right now, it has become a trap.  And with each foreclosure, the foundation of our communities weakens too.

Mr. President, there were warning signs more than a year ago that this crisis could affect the whole nation, but President Bush took a hands-off approach and ignored the problems.  

Regulators failed to take aggressive action, and now economists believe the worst is yet to come.  Our economic strength depends on Americans having a safe and stable place to live and raise their families.  Our economy won’t be stable again until the housing crisis is corrected.

We must take action to help prevent more drastic problems.  And we must ensure this situation can’t happen again.  Families facing foreclosure must be able to get mortgage counseling or help refinancing their mortgages.  

The Finance Committee’s bill also includes critical tax relief, which I support, for businesses that were directly impacted by the homebuilding industry, which has come to a stand-still.

And we must reform the lending system to prevent more families from losing their homes.  I think we should have two main goals: First, we must modernize the FHA to enable the federal government to offer an alternative to the non-traditional loans we have seen explode in the past few years.   And second, we need to ensure that government lenders can replace some of the worst subprime loans with sound, traditional mortgages.  

We Need a New Direction

Mr. President, I believe those investments will have a positive ripple effect on the economy for many years to come.  I guarantee that I will back on this floor many times over the next several months pushing this Congress to take action.

But, Mr. President, the current economic trouble we face now is a direct result of this Administration’s failure to plan for the future and lead us in the right direction.  Just like any American family preparing to balance its checkbook, we need to take stock of our finances and get our books back in order.  

American families understand how to live within their means.  When they sit down to work out the yearly budget, they consider all of their costs, decide how to invest their savings, and then they balance their checkbooks.

The Bush Administration inherited a budget surplus, but they squandered it with policies paid for by borrowing funds from future generations of Americans.  By waging a war in Iraq and failing to be honest about the true costs of that war, President Bush has racked up a mountain of debt with no strategy to pay it back.  

Instead of looking out for the needs of everyday Americans, he allowed his friends on Wall Street to take massive paychecks while allowing predatory lenders to work unregulated.  At the same time, the Bush Administration has failed to invest in our roads and bridges, in health care, in education, energy independence, and in our safety here at home.  

These are things that help our citizens get to work, and stay healthy and safe – things that keep our economy stable over the long-term.  And the longer we go without addressing our crumbling highways, skyrocketing health care costs, or our dependence on foreign oil, the higher the cost will be when we have no choice and limited options to fix a problem.  

We saw that with Katrina and with the Minnesota bridge collapse, just to name a few.

Every family knows that ignoring the need to spend wisely on things you depend on, and failing to live within your means, is a recipe for serious trouble down the road.  So while the economic stimulus we are working on today will do a lot of good in the short term, we have to insist that we deal with the real cause of our economic trouble.  

It’s time to take a lesson from American families, to balance the budget, to be honest about the true costs of the war, and think seriously about how to go forward.  It’s time to insist that the federal regulators who are supposed to watch out for economic troubles actually do their jobs.  And it’s time to stop ignoring our needs at home.

President Bush has shown a willingness to work with Congress on this economic stimulus package.  I hope he continues to see the value in working with us on the longer-term policies that our economy and American families badly need.