Steve Andreasen

Economic Security

October 21, 2002
Rochester Community and Technical College

I want to thank the Rochester Community and Technical College for allowing us the use of their atrium, and welcome those students and faculty, administration and others for coming here this morning.

I've been saying for months that Minnesota is at the center of the political universe this year. Based on all the office holders and candidates that have been on this campus the past week, I think that was an understatement.

A month ago, I gave a speech at St. Mary's University in Winona. I said then that this election, now just two weeks away, was boiling down to three issues: Leadership, National Security, and Economic Security.

I think Leadership has to begin within the Democratic Party. Democrats - incumbents and candidates - need to be active participants on both national security policy and economic policy.

That is why I stepped forward in my St. Mary's speech to tell you my own view on Iraq. First, we should do everything possible to disarm Iraq through international inspections and monitoring; second, we should pursue military action in Iraq only as a last resort; and third, we should work to achieve the broadest possible support from our Allies and the United Nations Security Council, so that we share the risks and the costs of any military action.

National security will be a heavy part of your Congressman's responsibilities in the months and years ahead. This District deserves an experienced voice on these issues in the United States House of Representatives. I can be that voice.

Our Economy Today

At the same time, Southern Minnesotans will need a voice in Congress on the equally vital issues of economic security. Folks in Minnesota understand that our nation's security cannot be measured solely by our military might or progress on a foreign battlefield.

We need to take urgent action to restore and strengthen our economy, provide for the security of our society, and protect our environment. Our nation must be strong at home if we are to be strong overseas. In short, we need leaders in Congress who will work equally hard on economic security as on Iraq and the battle against terrorism.

Many Minnesotans are fighting a battle every day just to stay ahead of this nation's crippled economy. Things are bad, and there are few, if any, signs, that they will get better, without urgent action to restore and strengthen our economy.

Things were not this bad two years ago. In fact, they were pretty good. When this Congress was sworn into office, the Government projected a surplus of $5.6 trillion over the next ten years. Promises were made to maintain the Social Security and Medicare reserves, and not spend these dollars on other federal programs; to provide a prescription drug benefit to seniors; to increase our commitment to education; and of course, to have a tax cut.

My opponent, Mr. Gutknecht, made a number of memorable statements about the economy during this time.

On February 14, 2001, he issued a statement from his office saying, "With $5.6 trillion in predicted surpluses, we can provide meaningful tax relief for hard working Americans and guarantee the Social Security and Medicare trust fund remain untouched."

Less than one month later, on March 8, he issued another statement in support of the administration's tax cut, saying, "Even with the most conservative estimates, there is more than enough money to pay down the recoverable debt and provide tax relief."

On March 28, Mr. Gutknecht, commenting on the $5.6 trillion surplus, said that "Even a recession of average size would not alter this outlook much."

And on April 9th, in a News Column posted on his website, he went even further, suggesting that the $5.6 trillion surplus "could grow by an additional $2 trillion."

I'll say this for Mr. Gutknecht: he is consistent. Unfortunately, with respect to our economy, he was consistently, and tragically, wrong.

21 months later, over $5 trillion of our hard-earned federal budget surplus is gone, much of that going for tax cuts for the wealthiest one percent of Americans. Some have pointed to the tragedy of the September 11th attacks as the reason for this negative turnaround. But that simply doesn't square with the facts. According to the Congressional Budget Office, 25 percent of the reduction in the $5.6 trillion surplus can be traced directly to last year's tax cut, with only 10 percent flowing from expenses related to September 11th and its aftermath.

As a result, we will be raiding Social Security and Medicare to pay for other federal programs for the next decade. The federal government is still delinquent on its pledge to provide 40 percent of the funding for special education - roughly $200 million last year for Minnesota - a broken promise that affects every school district. And we are still waiting on a prescription drug benefit for seniors.

During this Administration's term, with its economic plan in place, the unemployment rate is up from 4.2 to 5.6 percent. Total employment - the number of American jobs - is down. The number of Americans without health insurance is up. Business investment is down. Health care costs are up. The stock market and investment retirement accounts are down. Many folks I' ve talked to in Southern Minnesota are worried about whether they can retire on time, and in comfort.

Perhaps the best summary of our economy over the past 21 months is this: almost everything that should be up is down; and almost everything that should be down is up.

Economic Security and Investment Plan for Southern Minnesota

I do not want to go back to the days of sprawling federal deficits, high interest rates, high unemployment, and high inflation. But in the absence of urgent action to restore and strengthen our economy, that is where I fear we are heading.

The House Republican plan for curing our economic ills involves more of what has gotten us into trouble: more tax cuts for large corporations; and making last year's tax cuts targeted to the wealthiest one percent permanent. That's a plan that fails to address our current problems; and it may make them much worse.

That's not leadership.

That said, many Democrats simply point to the problem, but fail to provide any answers or alternatives.

That's not leadership, either.

What kind of action do I think is required? Here is my Economic Security and Investment Plan, which I will work for in Congress.

First, in order to rejuvenate our economy and protect Social Security and Medicare, the Administration and Congress must come to grips with our deteriorating federal budget.

Already, the Administration's budget and tax policies and our nation's economic downturn have made it impossible to deliver on the Federal government's commitment to provide its share of funding for special education; to provide a prescription drug benefit to seniors; or to protect the Social Security and Medicare surplus. On that basis alone, Congress will need to look at both spending, and revenue, when it reconvenes next January. If we are at war with Iraq, this becomes even more imperative.

Like any business or family that suffers a dramatic turnaround in its business or personal finances, the government should follow this simple piece of advice: when you are in a hole, stop digging.

Thus, I would introduce legislation next year that would freeze, beginning in 2004, further reductions in the top tax bracket passed by the Congress last year. This will affect only those Minnesotan Household's who earn over $370,000 per year, all of whom will still benefit from reductions in tax rates on the first $370,000 of their income, as well as the one percent reduction in the top tax bracket already in effect.

This would provide over $100 billion in revenue through 2011. This would be a serious down payment towards restoring fiscal balance, including the Social Security and Medicare surplus, at the earliest possible date. And it would help give us the flexibility to deal with any international crisis and urgent domestic priorities.

As further insurance against using the Social Security and Medicare surplus to fund other federal programs, I would also propose that this same legislation require Congress to review each year, beginning in 2004, whether to go forward with further reductions in tax rates scheduled for the following year.

I am convinced we need to take this step to help protect our nation and our economy; otherwise, we will shortchange both, or, continue to spend the Social Security and Medicare surpluses to fund current needs. That's bad policy, and our country - and our future - can't afford it.

Protecting Social Security and Medicare begins with protecting the Social Security and Medicare surplus. We should not squander this surplus through blind implementation of tax cuts targeted overwhelmingly at the wealthiest one percent of Americans. And we should not, as my opponent has proposed, privatize Social Security. The ups and downs of the stock market - so vividly illustrated this past year - should not have to be factored into Social Security benefits, for this generation, or the next.

Second, both Republicans and Democrats promised during the 2000 campaign to provide a prescription drug benefit for Senior Citizens. I would deliver on that promise, and would introduce legislation that would provide a prescription drug benefit under Medicare. As a first step towards containing health care costs, I would also introduce legislation that would facilitate the introduction of lower-cost, generic drugs into the market more rapidly.

Third, I would introduce legislation that would earmark the appropriate amount of federal dollars for providing the federal government's promised share of funding for special education over an appropriate period of time. For Minnesota school districts, this could mean an additional $2 billion over 10 years. Every schoolteacher I've spoken with, every school administrator, has told me this will make a real difference for Minnesota kids.

Fourth, I would introduce legislation to provide targeted tax cuts for new business investment to create new jobs; and for alternative energy research and production.

Alternative energy is an area where Southern Minnesota excels. Moreover, alternative energy can help reduce our energy dependence, increase our national security, and protect our environment. Wind, bio-diesel, and ethanol are far preferable alternatives to opening the Alaska National Wildlife Refuge to oil drilling, an ill-advised scheme supported by my opponent, who said during our debate in Rochester last week that, "if anyone has been up to Alaska, they're seeing miles and miles of flat nothing."

Fifth, I would move forward with legislation creating a Commission on Agriculture Reform, which I proposed this past August. This Commission would include farmers, ranchers, food processors, environmentalists, consumers, and agribusiness, and would examine Federal Agriculture policy and make recommendations for reform.


Our economy today is hurting. More important than any economic statistics, facts, or figures, is the human cost of this tragedy. We can close our eyes and simply go forward with the policies put in place in the spring of 2001, and hope for the best. That is my opponent's plan. Or, we can take our fate into our own hands, reexamine the past, make necessary changes, and move forward together.

That is my plan. I believe it is the right thing to do. If you do too, please vote for me, Steve Andreasen, on November 5th.

Paid for and authorized by Andreasen for Congress