FOR MORE INFORMATION: Mathew Beck Office:
202-225-8933
Charting a Course from Recession to Recovery in an Age of Reform
Chairman Levin delivers remarks on the economic agenda at the National Press Club
(Washington D.C.)- Ways and Means Committee Chairman Sander M. Levin (D-MI) delivered the following remarks at the National Press Club today as a featured guest in their Newsmaker’s Luncheon series. Below are Chairman Levin’s remarks as prepared for delivery. You can also click here to watch his remarks and the question and answer session which followed.
“Charting a Course from Recession to Recovery in an Age of Reform” ** As Prepared for Delivery **
“In the 27 years that I have been in the Congress, there have been some momentous challenges, sometimes contentious, other times not.
“The recession of the early 1980s; the conflict with the Soviet Union and its end; the debate over the Clinton healthcare proposal and the Republican takeover of the House in 1994; the terrorist attacks of 9-11; and the war in Iraq.
“I recall vividly heading home right after the vote on the 1993 Clinton Deficit Reduction bill. As so often, I looked forward to a town hall meeting. Held in the center of a local mall, it was indeed a turbulent session.
“Today is still very different.
“We are at a major crossroads. In a democracy, every generation or so, there occur conditions which can be described by a seemingly strange label:
“A Perfect Storm’ -- defined as a ‘rare combination of circumstances that aggravate a situation drastically.’
“This volatile combination today includes:
1. The deepest economic recession since the Great Depression, an historic financial meltdown and the globalizing of our economy. All impacting seriously families and communities.
2. Bush Administration policies that contributed to an historically high level of income inequalities, with very upper income families doing still better and the incomes of middle class families stagnating further, amidst an historic increase in the national debt replacing projected budget surpluses.
3. Neglect of public programs intended to provide safeguards for families in need. A disgraceful example is the doubling of the Social Security Disability backlog in eight years, hundreds of thousands waiting two or three years or more for a decision. And an unemployment insurance system that too often failed to help many jobless workers.
4. The largest U.S. trade deficits in recorded history – twice as large as the previous record in the 1980s and a major drag on economic growth and a contributor to the global financial crisis.
“When such a combination creates a ‘Perfect Storm’, there are rarely going to be perfect answers. Most if not all actions will likely be imperfect, but inaction is more often than not the most imperfect.
“Major change is the only course. This will inevitably in a democracy bring a clash of ideas. The clash now has been intensified by the loss of moderates within Republican ranks. I tried several decades ago to be elected Governor of Michigan against a moderate Republican. If I might say so, he and I today are much closer in our ideas than he is to those dominant in today’s Republican Party.
“Healthcare became the arena for an intense battle of ideas and rhetoric.
“The Obama Administration inherited a healthcare system the best in terms of innovation and almost the worst among industrial nations in terms of cost and coverage. The unsuccessful Clinton reform effort was followed by eight years of inaction under the Bush Administration as costs and coverage problems grew still worse.
“So we acted. Basic change creates resistance and the nation heard claims of impending disaster similar to those heard surrounding the passage of Social Security and Medicare.
The Jobs Agenda:
“It turned out that prognostications were wrong. The clash has not immobilized -- but energized -- those of us in the Majority. This happens when people do what they believe in and believe their actions will be in the best American tradition, spreading the wings of opportunity and community.
“On return last week, we turned to the number one priority -- jobs. The deeper the recession the longer is the traditional lag in job creation on the way out of the recession. Actions have led to significant stabilization; we must undertake additional efforts to spur job growth.
“The President signed the HIRE Act into law last month, providing a direct incentive for small businesses in particular to hire and invest.
“The House approved, unfortunately with only a handful of Republican votes, the Small Business and Infrastructure Jobs Tax Act to assist small businesses and extend the very successful Build America Bonds (BABs) program, and provide a variety of other tools to help our state and local governments finance infrastructure improvements that create jobs. Finance experts have deemed the BABs program ‘one of the economic recovery efforts biggest successes.’
“Our next step is to look at the Green Jobs Economy. The Ways and Means Committee held a very useful full-day hearing on this subject last week and we are looking at further legislation. At the hearing representatives of General Electric and Dow spoke eloquently about the need for an active public partnership with the private sector to develop technologies shaping our economic future. They said this could not happen relying only on markets themselves. That also characterized progress made in the Recovery Act, through programs like the battery grants and the 48C tax credits for clean manufacturing. It is also the underlying premise of the R&D tax credit, at the heart of the so-called Extender bills that have passed both Houses.
“These bills are being worked on right now, and with the Small Business Infrastructure Jobs bills, need to be passed and sent to the President before Memorial Day.
Safeguards for Workers
“Workers are at the heart of our efforts and I am still outraged at how Senate Republicans handled the temporary extension of unemployment benefits these last two months.
“There is today twice the number of long-term unemployed compared to any other time on record before this recession. Unemployment benefits have traditionally been a strong bipartisan effort, yet some Republicans claimed their opposition was rooted in concern about the deficits after years creating them. They seem to have discovered fiscal responsibility when it comes to unemployed workers but not when it came to paying for tax cuts for the very wealthy.
“We must extend unemployment and COBRA health insurance assistance through the end of the year so families will have a sense of security as they continue to look for work.
“For those dislocated by trade, the Recovery Act dramatically expanded the Trade Adjustment Assistance (TAA) for workers program.
“For the unemployed, The Recovery Act provided the beginning of long-needed reform with incentives for States to reform UI coverage so that it includes workers too often excluded in the past, especially low-wage and part-time workers. Twenty-eight States have already changed their laws to draw down part or all of the money for which they are eligible.
“The Recovery Act also included an important improvement in the Temporary Assistance for Needy Families (TANF) program by providing funding to help States with rising welfare caseloads and to assist them in creating or expanding subsidized employment programs. Thirty-five States are now operating or planning to operate a jobs program using this funding.
“For the disabled, Congress has provided increased funding in the past several years since Democrats regained the Majority to reduce the huge backlog in Social Security disability claims. Two-thirds of these claims are ultimately approved while people wait years – years where they are falling deeper and deeper into despair and even dying.
“With these steps, we have put in place a much improved framework, overcoming years of neglect in order to equalize opportunity in this country.
“Our tax policy is also an important tool to equalize opportunity.
Taxes
“The expired estate tax is four months into the year without resolution. This uncertainty is unacceptable and unfair. For instance, many wills are written to leave as much to the children as is below the estate tax threshold, with the rest going to the surviving spouse. Today that means the children may well be left with nothing.
“Eight months from now the 2001 and 2003 tax cuts will expire after a decade that saw a major skewing of the income distribution to the most affluent. During the last economic expansion, from 2001 to 2007, the top one percent of Americans received two-thirds of the increase in national income while middle class incomes essentially stagnated. The divergence of income we have seen in the last decade means that we should keep the middle income tax cuts and let those for the very wealthiest expire. This course was set by Statutory PAYGO, which protects the middle class tax cuts but says that anything beyond that will have to be paid for. This represents a vital step for fiscal responsibility.
“Once we replace present instability with a modicum of stability we can have the discussion about comprehensive reform of the tax code to make it simpler, fairer and more supportive of economic growth and job creation. Mr. Rangel put forth a comprehensive proposal on tax reform and the Committee will continue to take the lead in this area.
“Finally, another area with a direct impact on jobs is trade.
Trade
“The Bush Administration took a hands-off approach to trade policy - wedded to the view that the more trade the better no matter its terms or contents.
“We need to both expand trade and spread its benefits more broadly and ensure that American workers and American businesses are competing on a more level playing field.
“President Obama has expressed the need for trade to be ‘reciprocal - that it is not just going to be a one-way street’, and his Administration has taken important steps to use our trade laws to stand up against unfair or unbalanced trade practices.
“The Obama Administration inherited trade agreements with Korea, Columbia and Panama clearly containing important positives for expansion of international trade. But also with flaws that we made clear to Bush Administration negotiators needed to be addressed and now need to be fixed.
“Last week we held a bi-partisan meeting of key House Members with the new USTR leadership working on the important WTO Doha negotiations. It was indeed a constructive session giving some hope that we can begin to revive a bi-partisan trade policy. We agreed, as has been expressed by a broad range of private sector interests, that there is a need to ‘correct imbalances’ in the present state of negotiations. It is appropriate that USTR do the negotiating but working far more closely with Congress than in previous years.
“We will also work with the Administration as they begin negotiations in a Trans-Pacific Partnership (TPP) agreement. There are opportunities in this important region for American businesses and workers as well as challenges for us to address, particularly with the inclusion for the first time of a non-market economy, Vietnam, in a regional trade negotiation.
“We will also offer our support for the Administration’s G-20 initiative to address unsustainable global trade and financial imbalances – including by addressing other countries’ trade-distorting currency policies. China’s currency is clearly undervalued and is an important cause of our major trade deficits. I will be working with the Obama Administration over the next few months as it addresses, as it must, the currency issue in multilateral negotiations.
“So many pending issues of 2010 fall under the jurisdiction of the Ways and Means Committee. Moving ahead responsibly and responsively, we have held hearings recently on China currency and energy and technology issues and we had a Committee markup of the most recent jobs bill. We will continue to follow this approach in the months ahead as we evaluate and act on critical issues.
“Much is being reported now about the political outlook for November. Congressional Democrats know that repairing the damage of the combination of harmful Bush Administration policies in many key areas and its inaction in others and replacing them with sound policies require both persistence and patience and a vigorous dialogue with the American people.”
“We know that responding to the dynamics of a ‘Perfect Storm’ means resistance as part of the price of progress. We have confidence that the path forward we are charting builds on the finest American traditions and will succeed.”
