September 12, 2002

Mr. Chairman, I commend you for holding this hearing and for your diligence in examining ways to address our economic recovery. I welcome the panelists and I look forward to hearing their views on this important matter.

One year ago, our economy was beginning to slow down and weaken, and then it came to a virtual halt in mid-September. Thankfully, our economy was able to avoid a complete collapse, and the recession of 2001 proved to be the country's mildest in 30 years. This was due to the fact that American consumers continued spending. Unfortunately, the unemployment rate continues to hover around 6.0 percent, and the economy appears to be growing more slowly than its potential growth rate, which can signify the need for additional stimulus from the government.

While most of us agree that the economy needs a kick-start, it is important that we make certain that any legislation aimed towards stimulating the economy does in fact do that without being counterproductive to our overall economic health.

The numbers are daunting. In August, the Congressional Budget Office (CBO) confirmed that the President's tax cuts last year accounted for 34 percent of the decline in the baseline budget projections since January 2001. Eleven days after President Bush's inauguration, CBO projected that the budget would have a surplus of $5.6 trillion over the next 10 years. CBO's new projections show that the surplus for that period will now total only $336 billion. While we must address the current unemployment rate and economic fragility, it is critical that we do not pass any other irresponsible tax cuts that will further deteriorate our long term health. We must ensure that our long-term economic soundness is not continued to be borrowed against since high deficits mean that families will be forced to pay higher interest rates on their mortgage, children's education, and car payments.

I think that we took an important step this Summer by passing the Accounting Reform Bill which was vital to restoring the public's confidence in the integrity of America's financial marketplace. After the Senate votes on the homeland security bill, we are going to begin floor debate on pension reform and maybe even a minimum wage increase measure which will provide additional security to American workers and retirees. We also need to pass a terrorism insurance bill to ensure that construction and real estate projects can go forward.

However, with more than eight million people out of work, and with more than 1.5 million without work for more than six months, clearly our economy is not recovering quickly. With nearly one million workers having already exhausted all federal unemployment benefits as a result of the March economic stimulus package, and with estimates showing that number more than doubling by December, when the extension program ends, it is imperative that Congress extend unemployment benefits now.

I am pleased to be a cosponsor of Senator Kennedy's Economic Security Act of 2002, an extremely important piece of legislation that will help millions of workers nationwide, including thousands in my state. In Connecticut, approximately 12,000 workers were receiving extended benefits in early August, while more than 13,000 workers had already exhausted their benefits. My state lost 1,900 jobs in July and will lose more than 2,300 jobs at Ames and the JC Penny Catalog Outlet alone.

Unemployment insurance provides an infusion of funds to help individuals and families continue to have a roof over their head and food on the table. But unfortunately, because of the way the law is structured, some of those most in need of unemployment insurance don't qualify for it. If you have not worked in a job for long enough, if you want to work part-time, or if you just don't make enough money, you most likely will not qualify for unemployment insurance. I am pleased that the Economic Security Act provides assistance to those lower-wage and part-time workers who are often the first to be let go in any economic downturn. It's time to enact this common-sense package and again, I look forward to hearing from our panelists today.

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