We come here at an important time.

Every American understands the challenge of our economy in very personal ways.  Lifetime savings have been wiped out by greed, bad judgment, criminal activity and the natural course of economic cycles.  Jobs have been lost - retirements postponed - personal debt has increased and more and more of our fellow Americans are squeezed out of health care.  Long term unemployment has doubled.  The stock market has plunged more than 30 percent.

We have seen the weakest level of economic growth and business investment in 50 years.  These aren’t just statistics: this is what America’s families are dealing with every day.

Too many working families feel like they are on a treadmill - working harder and harder just to make ends meet.  They worry about how they’ll be able to pay the taxes, pay the bills and how they’ll ever pay for retirement.

I think we need to do more than just call for economic recovery.  We have to demand real economic reform and renewal and revitalization.

We have to show the courage of our convictions. Instead of just quoting the words of Franklin Roosevelt and John Kennedy and Robert Kennedy, we need to match their leadership with our own, with thinking equal to a new and different time.

All of us recognize that government is not by itself the solution to our economic problems.  The economy of the 1990s was driven primarily by monetary policy that encouraged growth... and by businesses retooling and investing in new technologies.  And it was helped by sound fiscal policy - investing in the right things but getting the budget back into balance.

Now we find that monetary policy is nearly exhausted.  Businesses are reluctant to spend.  And this administration has taken the government out of the equation by single-mindedly pushing irresponsible new tax cuts.

The Bush administration has made their choice very clear - from the snows of New Hampshire in early 2000 to this moment, they have chosen tax giveaways that reward the wealthiest Americans over tax cuts for everyday working Americans.

>From the moment they were inaugurated, they have chosen to throw tax giveaways to the largest companies, instead of helping to grow our small  businesses.

Let me be clear - our country is not well served by class warfare and I won’t engage in it.  But I do believe in fairness.  It is wrong to give tax cuts to those who have been the most rewarded over the last 10 years at the expense of working families and the middle class - especially with no certainty the money will be invested where it makes a difference now. We need to stand up and make clear that it matters.  It matters in terms of fundamental fairness.  It matters in holding together the social fabric of
our nation.  And it matters in terms of putting money into the economy where it has the most effect.

Not only do the new Bush tax cuts make no economic sense, but this administration has chosen to turn fiscal responsibility on its ear - turning a budget in surplus to a budget with endless deficits - and making it difficult for us to invest in our future.

As all of you know, even challenged, America has the best economy and the best workforce in the world. But we can do better.  And I believe a different, smarter set of choices can help unleash our potential.  We can kick our economy into gear while reforming economic policy so that it focuses on actually helping people - creating jobs, raising incomes and promoting growth.

The choices we make should be guided by three basic principles:

Does it make life better for people who get up and work hard everyday?

Is it fair - helping most Americans not just a fortunate few?

And does it work? Does it actually create jobs and expand economic opportunity?
 

ECONOMIC GROWTH IN THE 1990s VERSUS TODAY

It’s important to remember we don’t come to this moment in a vacuum.  We have a recent history that tells us a lot.  Under the leadership of a Democratic president, we had the courage to tackle the budget deficit and get the nation’s fiscal house in order. We knew it was the best way to bring down interest rates - creating a pool of affordable and available capital for critical investments in new plants, equipment and technology¼ a boom in housing construction and home ownership¼ creating jobs and building wealth across the country.

We helped create an economic climate that brought our country the greatest growth ever -- the lowest unemployment, the lowest inflation, the most jobs created. We balanced the budget, created a surplus and started paying down the debt.

We had what some called a “virtuous cycle.”

But this administration has replaced that virtuous cycle with a tax cut we told them we could not afford.  They insisted on it anyway.  And now we have deficits as far as the eye can see.
 

THE WRONG CHOICES OF THE BUSH ADMINISTRATION

Now, all of us love the idea of a tax cut.  I’m proud to say I’ve voted readily to reduce marginal rates and give tax breaks where they create jobs and make economic sense.  But the hard fact is that the new tax cuts proposed by the President do neither.

How can anyone reasonably suggest to our fellow Americans that the way to get the economy moving today is to cut taxes 8 years from now?

And as for fairness, we’re not calling for redistribution - what we want is for average, middle class Americans who work hard to be able to get ahead just like their parents did. 20 years ago, the average CEO made 42 times what the average worker made.  Now it’s 531 times more.  It’s out of whack.  Yet 40 percent of Bush’s tax giveaway goes to that very top 1 percent. I
think that’s an attack on the fundamental fairness that holds this country together.

And perhaps most outrageous if the violation of generational responsibility --  The largest cost of the Bush tax giveaway will not be born by any of us here today - it will be paid for by our children. That’s right - we’re borrowing from Social Security and Medicare to put money in some peoples’ pockets today - and sticking our children with the bill.

We need to repeat the truth again and again.  The new Bush tax cuts are unfair, unaffordable and unquestionably ineffective in growing our economy -- because they come at the expense of choices we need to make now so more Americans can enjoy greater wealth and a higher quality of life later.

Because of those cuts this Administration is clinging to, there are priorities going completely ignored - all of which make a difference in the quality of our lives - education, health care, transportation, our environment.

So our task is to get our economy moving again now.  To create jobs and raise incomes... to grow out of the deficit... and to meet our needs.

PLAN TO REVIVE ECONOMIC GROWTH IN THE SHORT TERM

How do we do that?

First, we should give every working American some tax relief now. I propose a payroll tax holiday on the first $10,000 of income.  Every worker in America would immediately receive  a $765 tax cut and every two-income family would get a cut of $1,530. Money to help families pay for new school clothes, put a down payment on a new car, or save for the future.

It’s fair, it’s affordable and it will immediately put money into the pockets of most Americans - including the millions of middle class Americans not helped by the President's tax giveaway. Most important, it will help our economy now - not a decade from now.

Next, we should extend unemployment benefits that run out at the end of this year for 820,000 families. It puts more money into the economy and sparks consumer demand. But more importantly, it is the right thing to do for people who are newly out of work, need health insurance and help taking care of their families.  It is extraordinary to me that the President lobbied hard to pass a bill to help businesses with terrorism insurance, but was content to allow unemployment insurance for workers to run out 3 days after Christmas.

I believe there are two other ways we can help hardworking families while boosting consumer demand: One -- raise the minimum wage and two -- expand the Earned Income Tax Credit that rewards low-income families for being on the payroll instead of the welfare rolls.  Frankly, the Republican response on the minimum wage is an extraordinary story of modern economic America. Even as the American worker has increased productivity almost 75% in the last three decades, you would have to raise the minimum wage to $8.14 an hour just to restore the purchasing power it had 33 years ago - and all we’re trying to do is get it up to $6.55!  Hardworking families deserve a raise. And fairness demands it.

As you know, our economy has experienced a period of enormous excess capacity.  We need to burn that excess up and encourage businesses to invest again.  Too often Democrats have given the impression that you can love jobs but bash the people who create them. We can’t deny the important role businesses play in our economy -- and I believe if we are going to get America moving again, we need to empower the businesses that hire more workers to invest and expand.

I propose a new job creation tax credit to encourage employers to start hiring and raising wages again. This tax credit would give a 1-time break from the payroll tax for every new job and for any raise given to an existing employee. It would benefit every business, from the smallest Mom and Pop shop to the largest employer. Most importantly - it would start creating jobs now.

And to encourage investments in the jobs of the future - I think we should excite the capital markets by eliminating the tax on capital gains for investments in critical technology companies - zero capital gains on $100 million issuance of stock if it’s held for 5 years and has created real jobs. And we should encourage the measurement of the real value of companies by ending the double taxation of dividends.

You know politicians are always talking about the importance of small business.  How they create 90% of the jobs and are the engine of job creation.  I say it’s time we did something to really help them.

During this credit crunch,  we should let every rapidly growing small business defer up to $250,000 of federal taxes if they are reinvested in the business. I can think of no better single idea to stimulate the economy - it would create more than 600,000 jobs within three years at little cost to the Treasury.

You know, one of the things I learned in the military - and John Glenn will know it well - whether on a ship, a small boat, or flying an airplane as John did - you live and die by your preventative maintenance and equipment investment.  The same is true for bridges, rail, highways, buildings, and water and sewer systems.  Ask Jane Campbell or Jack Ford - ask any mayor of a city or any small town in rural America --  and they will tell you that long overdue in this country is an investment in our infrastructure - especially transportation.

It’s how you create jobs. It’s how you move products. It’s how you make our cities work.  And it’s how you help people spend time with their families instead of in traffic jams.

And I believe it’s past time we used our ingenuity... our incredibly creativity to fundamentally improve our transportation system by embarking on an extensive commitment to build high-speed rail where it makes sense and alternatives where it does not.  Why should we lag behind France, Germany and Japan?  We can create jobs, reduce traffic and help people and products
get where they need to go.

Each of these are measures we can take to create jobs now and spark economic growth.  But we also need to rebuild trust between investors and corporations.  We need to encourage Americans to have confidence in the markets.

Unfortunately, while this President talks tough on corporate accountability - his administration has worked tirelessly to undermine reform and sabotage any meaningful oversight of the accounting industry. They even tried to cut next year’s budget for the SEC by $200 million - further weakening enforcement of corporate crimes.

Frankly, we need a President whose approach to abuse is a little more like Teddy Roosevelt and a little less like Herbert Hoover when it comes to keeping an eye on corporate America. We need an SEC chairman who will put investors ahead of industry, an Accounting Oversight Board chairman who will make sure they correct the books, instead of cooking them,  And we need to give the SEC the tools it needs to enforce the laws.

PLAN TO ENSURE LONG TERM ECONOMIC GROWTH

And just as we need to renew American confidence in the markets, we have to restore long-term confidence in our government with budget and tax reform.  That means simplifying the tax code and making sure it puts the interests of all Americans ahead of the special interests.  It means closing tax loopholes and cutting corporate welfare.  And it means a long-term effort to keep our budget balanced - cutting wasteful spending so we can invest in economic programs that work.

And if we’re serious about fairness - and about holding the fabric of America together - we must eliminate unfair tax shelters and cut corporate welfare. This will not only save taxpayers money - it will put government back on the side of the people and allow us to focus on actually creating jobs.

Just think - offshore tax havens and shelters enable corporations and executives to evade an estimated $70 billion in taxes each year.  How can anyone in this country suggest we have a fair system when companies can take $70 billion off the table?  That undermines the very essence of our government.  It’s a system only companies like Enron could love. And did they ever.  Enron held over 800 subsidiaries in countries with no taxes on income, profits, or capital gains --  692 in the Cayman Islands alone.  I believe in opening new markets and I want American companies to win.  But I know we can distinguish between legitimate businesses and sham transactions.  Assets in offshore entities have climbed from an estimated $200 billion in
1983, to an estimated $5 trillion today - and too many are brass plate addresses with a fax machine in an offshore tax haven.

What does that say to the vast majority of Americans who actually pay taxes?   And the silence from this Administration speaks volumes! They’ve dragged their feet and fought every attempt to crack down on corporate loopholes.  It’s time we stood up and insisted on real reform and real tax fairness.

We must also take a hard look at federal spending.  We simply can’t afford to keep wasting money on the wrong things.

It won’t be easy.  The special interests will stop at nothing to keep their special deals.  That’s why I’ve joined John McCain in calling for a “Corporate Subsidy Reform Commission” modeled after the military base-closing commission.  A bipartisan group would recommend corporate subsidies to be eliminated and Congress would have to vote up or down on the entire package.

It’s the only way to stop the games that go on in Washington.  When I first came to the Senate, each year millions upon millions of dollars were lavished on a wool and mohair subsidy cooked up during WWI to make sure we’d have plenty of wool and mohair for our soldiers’ uniforms.  But even after we stopped making our uniforms out of wool and mohair, the subsidy continued.  I came to the Senate floor again and again - finally we killed it.  Or we thought we did.  Last year it came back. This kind of wasteful, no-growth, special interest giveaway is alive and well -- again.  But it’s just the tip of the iceberg.

We were presented a defense bill that gave away $250,000 to an Illinois firm to research caffeinated chewing gum; $750,000 for grasshopper research in Alaska; $250,000 for a lettuce geneticist in Salinas, California and $64,000 for urban pest research in Georgia.  This is our defense budget?

 By eliminating these expenditures would you balance the budget?  No. But that’s not the point.  The point is that no politician can - with credibility - tell you he’s ‘fiscally responsible’ if he stays silent while these games are played.  Is wasteful spending a tiny part of the budget?  Yes. But it’s far more than most working people will ever see in their lives and invested in choices that do matter -- that do grow our economy -- it can make a world of difference.

It’s a question of choices.  The Fossil Energy Research and Development program spends more than $400 million on R&D for oil companies who can afford their own R&D- and even duplicates research they’re already engaged in.  And for 130 years the Federal government has allowed companies to mine on publicly owned lands for free, in addition to letting them buy those lands way below market price -- $5 an acre or less.  If we simply required small, fair royalties and eliminated the giveaway of public lands we could save another $519 million over 5 years.

It’s time we made that our policy so we can invest in things that really matter.

INVESTING IN THE FUTURE

In fact I think it’s time for us to engage in a great enterprise of job creation for the long-term future.  And there’s a way to do it that not only plays to the best of America’s creative and entrepreneurial spirit, but that improves our quality of life.  In the 1960’s President Kennedy challenged America to go into space and go to the moon within a decade.  John Glenn was
one of our leaders on the journey.  As the President said then, we would do it not because it was easy but because it was hard. We need to now go to the moon here on earth by setting America on the course to energy independence.  And in doing so, we can create millions of new jobs, even as we improve the quality of our lives and our security.

Energy is the single greatest symbol of the wrong choices being made by this Administration. They think we can drill our way out of our energy problems - they stand pat as $1.8 billion in federal largesse is lavished on oil and gas while alternative energies compete for the scraps of a mere $24 million in federal venture capital - and they remain content to let hardworking
Americans be held hostage by a handful of nations that rig the world’s oil market.

 As a founding member of the OPEC oil cartel said years ago, the Stone Age didn’t end because we ran out of stone, and the oil age won’t end because we run out of oil.  We can’t drill our way out of our dependence, we have to invest our way and we should start in earnest now.

In fact we should accelerate all our efforts in technology -- speed up the development process -- push the curve - and join the competition so that American ingenuity can again lead the world.  For Americans who work in engineering, design, and industry the growth of wind, solar and geothermal would spark a surge in production.  And since developing new energy technologies is a research-requiring, pathbreaking activity, we can create thousands of well-paying new jobs. The machines of renewable energy will be made of steel, aluminum and glass. They will be machined, manufactured, distributed and maintained. I don't think we should take a backseat to the Germans or the Japanese in that effort.  This new direction for America should create jobs for Americans, and it's up to us to insist it does.

Let’s do it - let’s intensify research and development of technologies that will help us detect, prevent, contain, and counter biological and chemical agents that could be used by terrorists. Today there’s little incentive for private investors to enter a tiny market where government may be the primary customer. So why don’t we take federal seed money and create a privately
managed venture capital fund for the development of anti-bioterrorism technologies, and for the encouragement of new companies to enter this market?

Let’s help unleash all of our creativity on new health research.  Postponing the onset of Alzheimer's disease by just five years would empty half of all the nursing home beds in America and our overall health care costs would plummet.  Let’s set out
the challenge - invest in Research and Development - empower the National Institute for Health - and let’s make it happen - lets embrace an all out effort to cure these diseases which rob our parents and grandparents of their savings, their dignity, and their golden years.

These are all critical investments in our future - choices too long deferred by this Administration.  And you can’t talk about investing in our future, without talking about investing in the workers whose labor will define that future for us.

America’s success has taught us the extraordinary capacity of American workers.  We have the most talented, productive and persevering workers in the world. But the world keeps changing around them. And for some the effort to keep up can seem insurmountable.

We also know business needs access to good workers.  So we need to work with business, state and local governments to provide a seamless system of worker training.  I know we can give people the opportunity and the incentive to chart a course of lifelong learning and education.

We need to end-run the bureaucracy and simply provide any dislocated worker with up to $4,000 in qualified job training services.  Scholarship funds could be used not only for skills training, but also for resume writing, job-hunting, interviewing and career research.

We also should create Empowerment Accounts for low-income Americans.  Each dollar saved in the account is matched and funds can only be withdrawn to get additional education or worker training, start a business or buy a home.  This innovative tool would help millions of American families start paving their path to economic success.

So America has a choice between two competing visions.

The Bush Administration sees an America where tax cuts for the wealthy are the only priority - even if they prevent any real investments for economic progress, bust the budget and violate the very value of fairness.

I see an America where every working family has real opportunity for a better life, an America where when it comes time for tax cuts, the middle class are first in line The opportunity to find a job that enables them to care for their family, to buy a house, to create a nest-egg, and enjoy a secure retirement.

I see an America where our government stops slanting the field towards the special interests - and starts representing fairness for all Americans.

I see an America that focuses on the economy today - not a decade from now.

I see an America where we actually focus on growing the economy, invest in our workers, help small business, and lead the world in cutting-edge technologies and research.

We can do it - I know we can - if we have the character, the commitment and the courage to follow through -- the kind of courage demonstrated time and again by one of our greatest Americans, John Glenn.  John Glenn learned lessons in combat about responsibility -- and leadership.  His generation learned how to meet the challenge of difficult times at home and around the world -- and they succeeded in meeting both.  I believe we can do that again in our country.  I believe our generation can rise to this challenge - that even as we win a war, we can rebuild our economy, we can create jobs and we can drive a new wave of innovation in a new century.

There are a couple of old sayings that John Glenn and I both learned in our military days: The Army says they never leave their wounded.  The marines say they never leave even their dead.  I say it's time we joined together in our country - all of us as Citizen Soldiers - committed to a cause greater than ourselves -- to make certain in deeds, not words, that we have an economy where no American is left behind.  That's the mission we have to undertake - all of us - in the days ahead - never stopping until our dream is a reality for every American.  Now let's go out of here and get the job done.