WASHINGTON, DC-In a speech on the Senate floor, U.S. Senator Bob Casey (D-PA) discussed the state of the economy in Pennsylvania and the economic stimulus package being considered in Washington. Senator Casey expressed his preference that the stimulus package include measures that will provide the maximum impact on the economy while also providing help to people most in need.
“When you look at economic data in Pennsylvania and across the country, we see a lot of bad news: health care costs are up, college tuition is up, mortgage delinquencies and foreclosures are up, the federal debt is up, and the only thing that isn’t up is wages,” said Senator Casey. “We have to invest in strategies that work: Food stamps, not just because it helps individual Americans and their families, but we know by investing in that strategy, they will spend the money quickly. We need people to spend money very rapidly to dig us out of the hole we are in. Food stamps, unemployment benefits, and aid to the States--we have to provide investments in strategies that will work.”
The full text of Senator Casey’s speech along with economic data for Pennsylvania is below.
Remarks of U.S. Senator Bob Casey
January 25, 2008
I stood before the Senate a couple of days ago and talked about the fact that we have a war in Iraq that we cannot forget about. In fact, if you listen to some of the news, you would think there are only one or two issues we have to worry about, but the war continues to be a central issue for the American people. We also have to be very concerned, as Senator Dorgan and others have reminded us, about the economy.
I was asked recently by a reporter--acouple of different reporters, actually--who said to me very simply--or asked me, I should say, very simply the question: Are we in recession? I answered them without blinking, without even stopping to think, because I know it is the truth, and the answer is yes, we are in a recession. I don't care about, nor do I need to wait, for some academic dissertation or some economist to tell us what is the textbook definition of a recession. We are in a recession. We have to do something about it. I think it is as plain as could be.
So what do we do about this recession? How do we respond to it? Thank goodness, there is a lot of bipartisanship on this issue, both parties coming together to try to do something about it. But I think we have to describe for people in Washington what this means for real people. I will talk about it in the context of Pennsylvania and Pennsylvania families, by way of highlighting this issue. I ask unanimous consent to have printed in the Record two pages I am going to be referring to from the Joint Economic Committee, Pennsylvania Economic Snapshot, dated January 23, 2008.
There being no objection, the material was ordered to be printed in the RECORD, as follows:
Over the past seven years, the Bush economy has made it more difficult for most Americans to get ahead. Under the current Administration, the basic goals of the American dream--raising a family, owning a home, paying for college, saving for retirement--have become intimidating hurdles for hardworking people. Slow growth in families' wages has been compounded by double-digit cost increases for health care, energy, and college tuition. Democrats are fighting for a new direction in economic policy, aimed at restoring broad-based growth, reducing the high costs of health care and energy, improving retirement security, and increasing prosperity for all Americans.
REAL HOUSEHOLD INCOME HAS STAGNATED; JOB CREATION HAS BEEN ABYSMAL
Pennsylvania's Median Household Income Increased By Only 1.3 Percent Since 2000. In Pennsylvania, real median household income averaged $48,148 over the 2005-2006 period, compared with $47,524 over the 1999-2000 period. Despite strong gains in productivity, workers' wages are only marginally higher than they were 25 years ago, and nationally, the inflation-adjusted income of a typical American household fell by $962, or 2.0 percent, to $48,201 between 2000 and 2006.
Pennsylvania's Job Growth Under the Current Administration Lags Far Behind Previous Presidents. The current president is competing with his father for the worst job creation record of any president since Herbert Hoover. Since taking office in January 2001, only 6 million jobs have been created, as compared with 20.8 million new jobs created during the Clinton administration at the same point in time. In Pennsylvania, only 101,900 new jobs have been created since Bush took office--or 1,200 new jobs per month--as compared with a total of 528,900 new jobs under Clinton--or 6,400 per month. In particular, the manufacturing sector has been hit hard by the economy under the current Administration, with payrolls nationwide declining by 3.2 million jobs between January 2001 and December 2007, and by 202,000 in Pennsylvania over the same period.
FAMILIES ARE FEELING THE SQUEEZE OF RISING EXPENSES
Rising Energy Costs Lead to Higher Gas and Home Heating Prices for Pennsylvania Residents. Rising energy costs are making it more difficult for Pennsylvania families to stretch their household budgets. In January 2001, the average retail price per gallon of gasoline in Pennsylvania was $1.43. The average gas price per gallon is $3.15 as of January 18, 2008. When adjusted for inflation, this represents an increase of 86 percent. At the same time, this winter is expected to hit Pennsylvania families hard, as average home heating costs have risen by 18.9 percent per household from $1,216 to $1,447 in the past year.
Health Care Premiums Rose 45.8 Percent in Pennsylvania Since 2000. In 2005, the average inflation-adjusted health care premium for family coverage in Pennsylvania was $11,470, a 45.8 percent increase from 2000, while the average premium for individual coverage was $4,332, an increase of 50.0 percent since 2000. Nationwide, the inflation-adjusted average monthly premium for family health coverage in the United States rose by 39.7 percent from 2000 to 2005, even as real median household income declined by 2.7 percent over the same period.
Pennsylvania College Tuition Rose 32.5 Percent Since 1999. Pennsylvania parents of college age students have also been hard hit under the current Administration, as inflation-adjusted tuition for Pennsylvania's four-year public colleges increased 32.5 percent between the 1999-2000 and 2005-2006 school years to $8,994 per year. With that $2,208 increase over just six years, Pennsylvania families are finding it more and more difficult to afford to send their children to college, and they are not alone. Nationally, public college tuition has risen at more than double the rate of inflation in recent years. Between the 1999-2000 and 2005-2006 academic years, average inflation-adjusted tuition and fees at U.S. public colleges and universities increased by 36.3 percent.
Child Care Costs For Two-Child Families Averaged $1,273 Per Month in Pennsylvania. Child care continues to be a hefty burden on the budgets of Pennsylvania parents, with inflation-adjusted monthly care for an infant averaging $689, and monthly care for two children averaging $1,273.
THE HOUSING CRISIS IS ERODING HOME WEALTH, HURTING THE BROADER ECONOMY
The Subprime Mortgage Crisis Is Impacting All Pennsylvania Homeowners. Under the Bush administration's watch, unregulated mortgage originators were given financial incentives to sell risky, unaffordable subprime mortgages to vulnerable borrowers. As these adjustable rate mortgages reset to higher rates, the number of families unable to afford their payments and threatened with foreclosure is skyrocketing. In Pennsylvania, mortgages in delinquency have increased from 81,900 in the third quarter of 2005 to 121,100 in the third quarter of 2007. According to a recent report published by the Joint Economic Committee (JEC), the number of subprime foreclosures in Pennsylvania will total 45,500 between third quarter 2007 and the end of 2009.
High Foreclosure Rates Drag Down Neighboring Property Values and Household Wealth. The mortgage foreclosure crisis will have severe costs for Pennsylvania homeowners, not only in direct costs, but in its effect on home values and declining property taxes. According to the JEC, subprime mortgage-related foreclosures will cost Pennsylvania $2.46 billion over the second half of 2007 through the end of 2009. Nationally, the expected economic costs of forecast foreclosures total nearly $104 billion. Moreover, these numbers do not include the larger effects that the foreclosure crisis may have on the economy. Home prices, which drove up consumer spending when they rose earlier this decade, are in decline now, and consumers may begin to draw back on spending, negatively impacting GDP growth.
THE ECONOMIC COST OF THE IRAQ WAR IS STAGGERING
The Iraq War Will Cost $36,900 Per Pennsylvania Household. According to the JEC's recent report, the direct and indirect costs of the Iraq War will be massive, especially if the Bush administration continues to keep large numbers of troops there. Even assuming significant force reductions, the cost of the Iraq War will total $107 billion for Pennsylvania taxpayers by 2017; the total cost to the country will be an estimated $2.8 trillion.
POVERTY REMAINS PERSISTENTLY HIGH
In Pennsylvania, 1.4 million Residents Were Living in Poverty Over Last Two Years. In Pennsylvania, 1.4 million residents were living below the poverty line during the 2005-2006 period, an increase of 28.8 percent over the 1999-2000 period. Unfortunately, this problem is not confined to the adult population as 17 percent of Pennsylvania's children are living below the poverty line. Nationally, 12.3 percent of Americans were living in poverty as of 2006.
THE RANKS OF THE UNINSURED CONTINUE TO GROW
Over Last Two Years, 1.2 million Pennsylvania Residents Had No Health Insurance. A growing number of Pennsylvania residents are living without health insurance. During the 2005-2006 period, an average of 1.2 million Pennsylvania residents--9.9 percent of the state's population--had no health insurance; this was 274,000 more than during the 1999-2000 period. Furthermore, 7.4 percent of Pennsylvania's children had no health insurance. Across the country, the number of Americans without health insurance totals 47 million, up 8.6 million since the current Administration took office.
First, delinquencies, mortgage delinquencies, are up from the third quarter of 2005 to the third quarter of 2007, up by some 40,000 mortgages, just in Pennsylvania. Then, stretching back over a couple of years, we look at gas prices. From January of 2001 forward, up 86 percent, gas prices in Pennsylvania; home heating costs, in 1 year--1 year--up 18.9 percent; health insurance for families. If you look at it over a 5-year period, 2000 to 2005, health care premiums for families are up 45.8 percent. And one more: Childcare costs per month for two children, which is the case for a lot of families, childcare costs per month for two children is averaging $1,273.
That is just in one State and a couple of highlights. We could go on and on, but I won't.
There are the economic realities for Pennsylvania families, and we could add more to that list. So when a reporter or anyone else asks me, Are we in a recession, my answer is, You bet we are. A lot of families in Pennsylvania and across the country think we have been in a recession, or their families have been in a kind of recession for years now--not just since the holidays, not just in the last year, but for many years. So I think the data is compelling and overwhelming and irrefutable.
But let's think about it even more broadly. In terms of health care, Families USA did a report this past November--again, just in Pennsylvania--and they have done it for a lot of States, but Pennsylvania was the first one they announced. I will read one sentence from a long report, one sentence from this report by Families USA on the issue of health care. I think one sentence tells the story. During this same period that they referred to earlier in the report, meaning 2000 to 2007, during that 7-year period:
The average worker's share of annual family premiums rose from $1,656 to $3,281, an increase of more than 98 percent.
What they are saying in that one sentence is that in the State of Pennsylvania, over that 7-year period of time, the workers' share of annual family premiums went up 98 percent--98 percent in one State, the workers' share on health care. I don't even need to refer to the rest of the report. That tells the story.
So that is all the information. That is all the data. But what do we do with it? We saw in the news today and yesterday that there has been an agreement of sorts that has been brought about on the economy, and I think we should all be encouraged by the fact that the President and the Congress are working together on a stimulus package. But what does that mean, and what are the elements of it? I won't go into all of it, but I think one thing we have to be guided by--and we have heard over and over again this sound bite in Washington, but we should say it again. These are not my words. We have all quoted these, but they summarize it pretty well: Whatever stimulus package we have in place for the American people has to be timely, has to be temporary, and has to be targeted. Another way to say that is we have to put in place policies for the stimulus that we know will work.
I want to refer to a chart here that tells that story pretty well. We have seen this chart before, but it bears repeating. Other Members of the Senate have used it. The targeted stimulus proposals, the ones that deliver far more bang for the buck. It is very simple: What do you get for a buck in stimulus expenditure?
We know this from the data. This isn't some Democratic operative; this is what Mark Zandi from economy.com put forth: food stamps, spend a dollar and get $1.73 back; unemployment, spend a dollar in stimulus, get $1.64 back. States are in a fiscal mess. We won't go into that, but if you spend a dollar, you get $1.36 back in return. Then it goes down from pay, with payroll tax rebates and temporary income tax. We know that expending tax cuts for the wealthy, which is on the table right now, doesn't work. We know what works.
We have to make sure, in my judgment, that if we put together a bipartisan stimulus package--and we still have to work on this in the Senate--that we invest in strategies that will work, not what we would like to do or hope to do or not what one side or the other believes is a good idea. We have to invest in strategies that work: Food stamps, not just because it helps individual Americans and their families, but we know by investing in that strategy, they will spend the money quickly. We need people to spend money very rapidly to dig us out of the hole we are in. Food stamps, unemployment benefits, and aid to the States--we have to provide investments in strategies that will work.
Another thing we have to do is make sure that when we are dealing with the housing crisis, we spend dollars and have strategies that lead to help in the short run. I was one of three Senators who put in the budget $180 million for counseling. It is not some far-reaching plan to deal with the subprime crisis; it is dollars right now. In fact, the dollars for counseling would get dollars into the hands of nonprofit groups in the country to help families out of this next month, so to speak. Those dollars--$180 million--will begin being spent in March. That will work. Those counselors are experts. They are certified, and they know how to work with families. We have to invest in that.
I will conclude with this thought. If you walked through the streets of New Orleans after Hurricane Katrina, I don't think many people would be scratching their heads and wondering whether that was a category 5 hurricane or a category 4. It didn't matter; it was devastating. I don't think we ought to wonder whether an economist tells us we are in a recession. We are in a recession.
We know something about the aftermath of Hurricane Katrina. When all of the reporting was done, when that horrific nightmare engulfed so many families, who were washed out of their homes and their hopes and dreams were gone, I think we learned a lot from what didn't happen before the hurricane.
We know as Americans that devastation doesn't always come with the awful swiftness of a hurricane. Sometimes it happens much more gradually, over time, when you don't make the right decision and prioritize and when you don't make the right investments. We are not doing that right now. We are not making the investments we should make in children in the dawn of their lives. We are not making an investment in fiscal responsibility to the extent we should. We are not investing in our infrastructure. Maybe all of those decisions can lead to a kind of slower moving Katrina or slower moving hurricane, which is an economic hurricane, or a devastating hurricane that dashes the hopes and dreams of children and their families.
So when we make a decision about what will be in the stimulus package to help people in the short run, we also have to get to work on a long-term strategy for economic growth, investing in our children, and making sure families can grow. I am concerned about how we are doing that or not doing it in Washington. We should learn from the horrific nightmare that was Hurricane Katrina. We should learn from, frankly, information such as this that tells us what will work in the short run to get us out of this mess and stimulate the economy and get dollars in the hands of Americans who will spend the dollars, which will jump-start or jolt our economy. I think we can come together and do that. I don't think what we have seen so far gets us to that point.
I am grateful for the opportunity to talk about these issues. I know they are central not just to Pennsylvania and our families but in States such as Minnesota and other States across this country. We have a lot more work to do to get the stimulus package right to help our economy.
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