Opening Statement of the Hon. Bill Thomas, a Representative in Congress from the State of California, 
and Chairman, Committee on Ways and Means

Hearing on the President's Fiscal Year 2003 Budget

February 5, 2002

Good morning.  And welcome back, everyone. The President's fiscal year 2003 budget plan is, above all else, on target for the times we are living in.  And because of the considerable foreign and domestic challenges that our nation now faces, a wealth of unanticipated circumstances and fiscal demands has forced us to change our thinking just since September 11th.  We have been attacked as a nation, and I believe we must respond as a nation.  And that has fundamentally altered the fiscal landscape.

The President's proposal is part of a strategy to protect our country and citizens.  I think it is quite right that for now, it cannot be business as usual.  President Bush has presented us with a sound fiscal blueprint. Its underlying growth assumptions are measured and reasonable.  Its fundamental and concise goals - win the war, protect the homeland and revive the economy - make sense in our current extraordinary circumstances.  Those three factors - win the war, protect the homeland, revive the economy - I believe fundamentally define the President's 2003 budget.

Maintaining the viability of our domestic economic life demands action.  The President's agenda, as he said in his State of the Union address, can be summed up with one word: jobs.  The war against terrorism must and will shape the fiscal agenda for the next at least several years.  Yet ensuring economic security and job creation matter enormously to people across this country.  People need to know that they will have a paycheck - if not now, soon. 

The President's proposals constitute a sensible fiscal strategy that will serve as a platform for strong and sustained economic growth. As we know, the economy has been in recession since March of last year.  We believe now there is more good news than bad.  Unemployment hasn't risen as much as had been feared.  Production of durable goods, at least on the short-term measurables, is on the rise.  Fourth quarter GDP came in a bit stronger than expected. Indeed, the chairman of the Federal Reserve signaled his growing confidence that recovery is underway in his statement before a Senate committee last week.

Those who argue that last spring's tax bill has contributed to the recession, in my opinion, are frankly out of touch with the facts.  Most of that law hasn't yet kicked in.  The laws of economics don't get repealed when disaster strikes.  Cutting taxes still generates economic growth and raising them in a recession still spells trouble.

Lower taxes don't just put money in people's pockets.  They help fund the business investment, innovation and expansion that must form the backbone of a long-term economic revitalization.  They encourage further competition and the return of venture capital to the marketplace.

Against the backdrop of a recovering economy, the need for economic stimulus is perhaps less obvious than in the first months after September 11th.  This House acted in October to pass a stimulus package, and again in December in a slightly modified form.  The Senate has yet to act.  And based upon the latest headlines, it seems as though there may be an attempt to make sure that the Senate cannot complete a package that reflects the will of the Senate.

I don't believe that a stimulus package is no longer necessary.  Part of the comments that I will direct towards the Secretary would be his feeling about the need for a stimulus package.  Perhaps in October, we would have been a bit bolder and stronger, but even today, perhaps there may need to be a package.

The aftermath of September 11th has, to a degree, shaken the people's confidence in their economic future.  Markets are not yet convinced that we have the right plan.  We should not be shy in insisting on action to ensure the durability of economic recovery.  In the face of current danger, waiting to see what happens is rarely the right strategy.

Since we were last in session, a number of events have occurred that I believe force us to shape the committee's hearing agenda, as well as it required a reshaping of the President's budget.  I want to announce that on February 13th we will be holding a hearing focusing on health insurance tax credits for the uninsured.  And beginning on February 26th, in consultation with the ranking member, I want to schedule a series of hearings.  This committee, as well as other committees, will have responsibilities focused on the question of retirement security.  And this committee, as it almost always does, should not react to a single specific circumstance but rather look at the broad underlying fundamentals as to whether or not they need correction.

So perhaps we could start on February 26th by looking at defined contribution pensions, the question of individual retirement savings, 401(k)s.  We would then move to a defined benefit plan hearing, focusing on what are called in the steel industry "legacy costs." We would also look at other defined benefit plans and the veracity of the system that we have constructed in the past to sustain those programs, notwithstanding the failure of companies. This would lead to a series of hearings on Social Security solvency and reform for the 21st century.

So we will have an aggressive agenda out in front of us, addressing somewhat immediate concerns but hopefully placing them in the context of long-term fundamental adjustments to the system.

Mr. Secretary, it is a pleasure to have you with us.  And prior to asking you to speak to us for your assigned period of time, the Chair would now recognize the ranking member, the gentleman from New York.