SECTION: CAPITOL HILL HEARING TESTIMONY

LENGTH: 760 words

COMMITTEE: SENATE BUDGET

HEADLINE: TESTIMONY EVOLVING FISCAL CHALLENGES

TESTIMONY-BY: DEBBIE STABENOW , SENATOR

BODY:
January 25, 2001 Statement by Senator Debbie Stabenow Senate Budget Committee Mr. Chairman, I would like to welcome Chairman Greenspan. The year 2001 will be a year we will long remember in our nation's economic and budget history. For the first time since 1835, we can see the light at the end of the national debt tunnel. With projections of a unified surplus of approximately $5 trillion, we have a chance to fully pay off the national debt in the next 10 years. But, we can only do this if we maintain the fiscal discipline of the last 10 years. By the end of Fiscal Year 2001, we will have paid off approximately $600 billion of our national debt in the last four years. This shows that it can be done - we can pay off our debt. But we must be vigilant about it. When we pay down the national debt, we help lower interest rates. This is critical to keeping our prosperity going for two reasons: -First, lower interest rates help our businesses expand and invest in new technologies by lowering the cost of borrowing. They will also increase our competitiveness overseas, which is important to a State like Michigan that exports cars and other products all over the world. -Second, lower interest rates also help consumers by lowering the cost of car loans, home loans and student loans. These lower costs are basically a tax cut for American businesses and families. For example, if a family has a $ 1 00,000 mortgage at a 7 percent rate instead of an 8 percent rate, they would save $816 per year and almost $25,000 over the life of the mortgage. Mr. Chairman, I hope we can build a bipartisan consensus to pay off our national debt as our Committee moves forward this year. If we take a balanced approach, which could include tax cuts, a Medicare prescription drug benefit, and other modest investments, we could succeed in our quest to be debt free in this decade. Thank you.

LOAD-DATE: January 26, 2001, Friday