To withdraw normal trade relations treatment from the products of the People's Republic of China.

Mr. Speaker, tonight I want to focus on some very important issues which impact the middle class of our country, and I do that as the only Independent in the U.S. House of Representatives. And as an Independent, the views that I am going to express are somewhat different than the views of many of my colleagues.

The first point that I want to make is in a sense an obvious point to most people in this country, especially perhaps the 50 or 60 percent of the American people who have given up on the political process and no longer vote, and that is that in Washington, D.C., in the White House and in the United States Congress, money, big money plays an enormous role. There is a reason, and I am going to get into this in greater length in a moment, why we are hemorrhaging decent-paying manufacturing jobs and those jobs are going to China where workers there are paid 50 cents an hour and why corporate America is laying off millions of American workers to take jobs abroad. And one of the reasons that we have a disastrous trade policy is the huge amounts of money that come into Congress, that go into the White House, which have opened up access so that these corporations can go a long way toward destroying decent-paying jobs in America. Money talks. There is a reason why in the United States of America our people pay by far the highest prices in the world for prescription drugs.

I border in Vermont, the State that I represent, Canada, the Canadian Nation. And in Canada people pay in some cases one-fifth, one-third, one-half of the prices that people in the United States pay for the same exact medicine made by the same company. There is a reason for the fact that in the United States we are the only country in the industrialized world that does not in one form or another regulate the drug industry and prevent them from charging Americans any prices they want, and that reason is big money.

The pharmaceutical industry contributes huge amounts of money to Members of Congress. They have lobbyists running all over this place. Several years ago when the President of the United States had a major fund raiser, there was the pharmaceutical industry up there on the dais with him. There is a reason why the United States today is the only Nation in the industrialized world which does not have a national health care program guaranteeing health care to all people, and that reason is money coming into Washington, D.C. from the insurance companies and other people who profit off of a health care system which is disintegrating before our eyes. There is a reason why pollution all over America is rampant, and that has to do with the money that utilities and other large corporations contribute to political parties and to the White House.

Front page, New York Times today: ``Lawyers at EPA Say it will Drop Pollution Cases,'' and the article goes on to point out, of course, that ``Representatives of the utility industry have been among President Bush's biggest campaign donors, and a change in the enforcement policies has been a top priority of the industry's lobbyists.'' In other words, they have now been given permission to pollute because they are major campaign contributors.

There is a reason why this Congress and this President have passed legislation which provides enormous tax breaks for the wealthiest people in our country, hundreds and hundreds of billions of dollars in tax breaks that will go to millionaires and billionaires, while at the same time we have the highest rate of childhood poverty in the industrialized world for our children, where we have working people living in their cars because they cannot afford the housing that is available to them. That has everything to do with the money that the wealthy and large corporations contribute into the political process.

Mr. Speaker, the corporate media, which, of course, is owned by big money interests, does not talk about what is happening in our country too much in terms of what is going on in the lives of ordinary people, but in my view, in many respects the United

States is rapidly becoming three separate nations. On one hand we have an increasingly wealthy elite composed of a small number of people with unbelievable wealth and power. That is one group. Small numbers but incredible wealth, incredible power. And then we have the vast majority of the people who are in the middle class, and the middle class in our country today is, as most Americans know, shrinking. The average American today is working longer hours for lower wages than he or she used to. People are going bankrupt at frightening numbers. It is extremely rare when we can see one breadwinner in the family earning enough money to pay the bills in almost every instance in the middle class. Now, two people are needed to work, and sometimes these folks are working unbelievable hours and are becoming stressed out. That is the middle class, shrinking, people working longer hours for lower wages, wondering how they are going to be able to send their kids to college. And at the bottom, at the bottom of the ladder, we have a growing number of Americans who are living in abject poverty, people who are barely able to keep their heads above water, people who are in many instances working for $5.15 an hour, the minimum wage, and those people, after 40 hours of work, 50 hours of work, are falling further behind. They cannot afford to get their cars fixed to get the work. They cannot afford child care for their children, and that is what is happening to our low-income people, and poverty in America, as we all know, is increasing.

What we very rarely hear discussed in the House of Representatives, in the corporate media, is the growing gap between the rich and the poor and the fact that in our country we have the most unequal distribution of wealth and income. The fact that there have been rich and poor is not new. That has always gone on. But the disparities in wealth and income that currently exist in our country today have not been seen since the 1920's. In other words, instead of becoming a more egalitarian country, a country in which the middle class is growing, where fewer people are living in poverty, what we are seeing is more and more inequality in terms of the distribution of wealth and income.

Today, Mr. Speaker, the wealthiest 1 percent of the population owns more wealth than the bottom 95 percent. That is right. The richest 1 percent owns more wealth than the bottom 95 percent. Some people may think that is okay. Let me be frank. I do not think that that is right, that that is moral, that that is what this country should be about. The CEOs of our largest corporations today earn more than 500 times what their employees are making, 500 times. While workers are being squeezed, being forced to pay more for health insurance, while their pensions are being cut back, the CEOs of large corporations in many instances make out like bandits. And I am not just talking here about the crooks, the dishonest people, the illegal people who ran companies like Enron and WorldCom and Arthur Andersen and those companies. I am not talking about them. I am talking about the highly-respected CEOs like the retired head of General Electric, Jack Welch, who, when he retired in 2000, received $123 million in compensation and $10 million a year in pension benefits for the rest of his life, and he did that after throwing tens and tens of thousands of American workers out on the streets as he moved his plants abroad to China, Mexico, and other countries. Good job, Jack. He is sure worth $123 million now that he has laid off tens of thousands of American workers. I am talking about people like Lou Gerstner of IBM, who, from 1997 to 2002, received $366 million in compensation while slashing the pensions of his employees and the health care benefits of IBM retirees. Right on, Lou. $366 million for him; cuts in pensions and health care benefits for his retirees. A great American. I am talking about C.A. Heimbold Jr., Bristol-Myers Squibb, who received almost $75 million in 2001 while helping to make it impossible for many seniors in this country to purchase prescription drugs because they are priced so high.

Today the Nation's 13,000 wealthiest families who constitute 1/100 of 1 percent of the population receive almost as much income as the bottom 20 million families in the United States. That to my mind is not what America is supposed to be.

New data from the Congressional Budget Office shows that the gap between the rich and the poor in terms of income more than doubled from 1979 to 2000. In other words, we are moving in exactly the wrong direction. The gap is such that the wealthiest 1 percent had more money to spend after taxes than the bottom 40 percent. The richest 2.8 million Americans had $950 billion after taxes, while the poorest 110 million had less, 14.4 percent.

Mr. Speaker, it is increasingly common to see in my State of Vermont, and all over this Nation, working people working not at one job, not at two jobs in order to pay the bills, but in more instance than we can imagine, working three jobs, working incredible hours, not 40 hours but 50 hours, 60 hours. Is this what the new global economy is all about, seeing men and women all over America working one, two, three jobs with minimal benefits?

When I was growing up, the expectation of being in the middle class, and I know this is a very radical concept that some young people might find difficult to understand, but the concept then before computers, before the explosion of technology, concept of being in the middle class in those days was that one person in a family could work 40 hours a week and earn enough money to pay the bills and take care of his or her family. Imagine what a radical idea that was, one person. The reality now is that we find very few families in the middle class where one person works 40 hours and earns enough money to pay the bills.

In terms of what is happening to the middle-class, we have lost over 3 million jobs in the last 3 years, and, with 9 million workers unemployed, unemployment is over 6 percent. That is a serious problem. But in truth, the unemployment situation is far worse than that, because official unemployment statistics do not include those workers who are no longer actively searching for work. So if you are in a high unemployment area, if there are no jobs and you are not actively working, you are not included. Those figures do not include workers who are working part-time because they cannot find full-time work. Those figures do not include Ph.D.s who are driving cabs and skilled workers who are doing unskilled labor because there are no jobs around that fit their skills. But, nonetheless, we have 9 million people who are unemployed.

Importantly, of the 3 million jobs that we have lost over the last 3 years, 2.7 million were in the manufacturing sector. This is an issue that I want to spend a moment on, because what is happening in our manufacturing sector today is a disaster for this country and bodes very, very poorly for the future of our Nation.

The bottom line is, and Congress must finally recognize this, our trade policies are failing. NAFTA has failed. Our membership in the WTO has failed. Perhaps, above all, permanent normal trade relations with China, PNTR, has failed.

The time is now, and, in fact, it is long overdue, for the United States Congress to stand up to corporate America, to stand up to the President of the United States, to stand up to editorial writers all over America, all of whom have told us, year after year, how great unfettered free trade would be. Well, the evidence is in. They were wrong. They were horrendously wrong.

They told us that unfettered free trade would create new jobs. Instead, we have lost jobs.

They told us that unfettered free trade would improve the standard of living of the middle-class. Instead, real wages have gone down.

Let us be very clear: The decline of manufacturing is one of the reasons why our middle-class is shrinking and why wages for middle- class workers have declined. When we talk about the loss of 3 million jobs in the last 3 years, we should appreciate that 90 percent of those jobs were lost in manufacturing, and, with the loss of manufacturing jobs, we have seen a decline in real inflation-accounted-for wages over the last 30 years.

Today, American workers in the private sector are earning 8 percent less than they were in 1973; 8 percent less. Now, just think about that for a moment. In the last 30 years there has

been a revolution in technology. We all know that. We all know what computers have done, what e-mail has done, what faxes have done, what cell phones and satellite communications have done. We know what robotics in factories have done. In other words, we are a much more productive Nation than we were 30 years ago. Almost every worker is producing more.

Given that reality, that we have new tools that make us more productive, why is it that the average worker in the private sector today is earning 8 percent less than he or she was earning in 1973? This is a major issue that we have got to put up there on the radar screen, and an issue that needs to be discussed all over our country.

Let us be honest about it: Manufacturing in this country today is in a state of collapse. In the last 3 years, we have lost 2.7 million manufacturing jobs, which comprise 16 percent of the total; 16 percent of manufacturing jobs have been lost in the last 3 years.

In my own small State of Vermont, the third smallest State in the country, we have lost some 8,700 manufacturing jobs between January 2001 and August 2003. And here is the tragedy: When we talk about the loss of manufacturing jobs, we are talking about the loss of decent- paying jobs, often with decent benefits.

In Vermont, for example, on average, someone working in manufacturing makes over $42,000 a year. That is a decent income. When that employee loses his or her job, when that job goes to China, in almost every instance the new job that is acquired by that worker pays less and provides lower benefits.

Mr. Speaker, in 2002, the United States had a $435 billion trade deficit; a $435 billion trade deficit. This year, the trade deficit with China alone, one country, China, is expected to be $120 billion, and that number is projected to go up and up and up in future years.

In recent years we have seen the trade deficit rise from $11.5 billion in 1990 to $49 billion in 1997 to $120 billion this year. And here is what is scary; the National Association of Manufacturers estimates that if present trends continue, our trade deficit with China will go up to $330 billion in 5 years.

Now, our disastrous trade policy is not only costing us millions of decent-paying jobs, it is squeezing wages. It is lowering the wages for the average person. Many employers are making it very clear that if workers do not take cuts in their health care coverage or do not take cuts in wages, that they will move operations to China, to Mexico, or elsewhere.

One of the areas where people are most severely hurt is among the young entry level workers, people without a college education.

Mr. Speaker, for entry level workers without a college level education, the real wages, that is, inflation-accounted-for wages, that they receive have dropped by over 28 percent from 1979 to 1997, which are the latest figures that I have seen. The drop for women during that period was only 18 percent.

How did that happen? Why did that happen? Well, the answer is fairly obvious. Twenty-five years ago, 30 years ago, if you graduated high school you had, as often as not, the opportunity to go to work in manufacturing. You did not get rich, but you were able to make a living, you were able to have decent health care and other benefits.

But with the decline of manufacturing, what job opportunities are now open to young workers who do not have a college degree? Well, everybody knows what is open. They can go to work at McDonald's for the minimum wage, or a little bit more than that, or they can go to work at Wal- Mart. But the sad truth is that those jobs do not pay anything close to a living wage.

What I think can best show what is happening in our economy today is that not so many years ago the largest employer in the United States was General Motors, and workers who work at General Motors today and worked at General Motors 20 years ago earned a living wage with decent benefits.

Today, Mr. Speaker, our largest employer is Wal-Mart. And that is what has happened to the American economy. We have gone from a General Motors economy to a Wal-Mart economy, where people earn low wages and miserable benefits. Today, Wal-Mart employees earn $8.23 per hour, or $13,800 annually, wages which are below the poverty level.

In other words, the largest employer in America, Wal-Mart, now pays workers wages that are below the poverty level. Many of these workers qualify for Federal food stamp programs, which means that Wal-Mart is being directly subsidized by U.S. taxpayers. They pay inadequate wages, workers cannot make it, the Federal Government subsidizes Wal-Mart and allows those workers to get food stamps.

Wal-Mart, as you know, has been sued by 27 States for not paying the overtime pay their workers are entitled to, and, recently, on the front pages of our newspapers, Federal agents raided their headquarters and 60 of their stores across the country, arresting 300 illegal workers in 21 States. That is the largest employer in the United States of America.

That is what the transformation of the American economy is all about. We have gone from an economy where workers used to work producing real products, making middle-class wages with good benefits, to a Wal-Mart economy, where our largest employer now pays workers poverty wages with minimal benefits and has a huge turnover.

Frankly, Mr. Speaker, in hindsight, it did not take a genius to predict that unfettered free trade with China would be a disaster. Many of us have been saying that right here on this floor for years. With educated, hard-working Chinese workers available at 30, 40, 50 cents an hour, and with corporations having the capability of bringing their Chinese-made products back into this country tariff-free, why would American multinational corporations not shut down? Why would they not shut down their plants in this country and move to China? It does not take a genius to figure out that that is what they would do, and that is what they are doing.

Should anyone be surprised that Motorola eliminated 42,000 American jobs in 2001 while investing $3.4 billion in China, or that it plans to invest $10 billion there by 2006?

Who is shocked that General Electric has thrown hundreds of thousands of American workers out on the street in the last 30 years, while investing $1.5 billion in China? From 1978 to 1995, GE eliminated 269,000 jobs in the United States. Meanwhile, of course, its former CEO, Jack Welch, managed to put together an estimated fortune of some $900 million for himself.

Boeing has laid off 135,000 American workers. In the last 30 years, General Motors has shrunk their U.S. workforce by 250,000. IBM, another major corporation, has signed deals to train 100,000 software specialists in China over a 3-year period. Honeywell has built 13 factories in China. Ethan Allen Furniture, which does business in my State, has cut jobs at three sawmills and 17 U.S. manufacturing plants. Nobody, nobody, should be surprised at those developments.

China, for American multinational corporations, is a great place to do business, if by ``doing business'' we mean making products for export back into the United States that companies previously made here. Not only are wages extremely low in China, 30, 40, 50 cents an hour, but if workers attempt to stand up for their rights and they try to form a union, they get arrested. They go to jail.

That is a great place to do business. In the United States we have environmental standards. Factories, plants cannot throw their garbage into the air and into our waterways. Not in China, which is rapidly becoming one of the most polluted countries in the world.

It is a great place to do business: Low wages, people go to jail when they form unions. If people stand up and protest against their former government, they go to jail. Massive pollution. What a wonderful place to go and support the authoritarian government in China.

Mr. Speaker, I want to read a quote, and I think some of our Members and Americans will really be quite surprised by this quote, but I think it needs to be brought out, and it needs to be discussed, because this is what is going on in America today. This is a quote from Jeffrey Immelt, who is the chairman and CEO of General Electric, obviously one of the largest corporations not only in America, but in the world, and this is what he said at an investor meeting on December 6, 2002, a

little less than a year ago. This is the chairman of General Electric: ``When I am talking to GE managers, I talk China, China, China, China, China. You need to be there. You need to change the way people talk about it and how they get there. I am a nut on China. Outsourcing from China is going to grow to $5 billion. We are building a tech center in China. Every discussion today has to center on China. The cost basis is extremely attractive. You can take an 18 cubic foot refrigerator, make it in China, land it in the United States, and land it for less than we can make an 18 cubic foot refrigerator today, ourselves.'' Jeffrey Immelt, Chairman, CEO of General Electric.

There it is. This is not an American company; this is a company prepared to sell out every American worker and run to China where they can exploit people there and bring that product back into this country tariff-free. And it is not just General Electric. I quoted GE. I could have quoted a dozen other corporations.

Mr. Speaker, the trade problem with China is now so severe that it is not only a question of companies located in the United States moving to China, but it is companies located in Mexico moving to China. Everyone knows that Mexican wages are a fraction of the wages in the United States, but for many American corporations and international corporations, wages in Mexico are too high, which is why hundreds of factories have shut down there and have gone to China, causing major problems for Mexico. Mexico cannot compete with China, and we signed a trade agreement with them which says that American workers are supposed to compete against the desperate people of that country.

Over the years, advocates of unfettered free trade have tried to gloss over the bad news about the decline in factory employment by promising that a new high-tech economy was in the making. It would be a new economy in which millions of workers, young people, would be able to be sitting in clean offices, working behind their computers, earning $50,000, $60,000, $70,000 a year. We do not have to worry about those old factory jobs, let them go to China and Mexico, because we have all of these high-tech jobs that are going to pay people really good wages. That is what they told us. Do not worry about blue collar jobs, we have the white collar jobs.

Unfortunately, Mr. Speaker, the advocates of free trade are wrong again. We now know that blue collar manufacturing jobs are not the only casualty of unfettered free trade. Estimates are that some 50,000 to 60,000 high-tech, white collar jobs have been lost in this country in the last 2 years, and that many of them have ended up in India. When Americans argue with the phone company about whether their phone bill is right or wrong, they are not going to be talking to somebody in Boston, New York City or Los Angeles; more often than not, they are going to be talking to somebody in India. That is who we are going to be talking to, more and more. And that whole phenomenon of outsourcing information technology jobs is happening more and more.

According to Forester Research, a major consultant on this issue, they say, ``Over the next 15 years, 3.3 million U.S. service industry jobs and $136 billion in wages will move offshore. The information technology industry will lead the initial overseas exodus.'' That is from Forester Research.

According to Booz Allen Hamilton, companies can lower their costs by as much as 80 percent by shifting tasks such as computer programming, accounting, and procurement to China. That is your job going abroad. Among many other companies moving high-tech jobs abroad is Microsoft, which is spending $750 million over the next 3 years on research and development and outsourcing in China.

Recently, Intel Corporation Chairman Andy Grove warned that the U.S. could lose the bulk of its information technology jobs to overseas competitors in the next decade, largely to India and China.

In other words, Mr. Speaker, not only has unfettered free trade cost us much of our textile industry, our footwear industry, our steel industry, our tool and die industry, our electronics industry, our furniture industry, as well as many, many other industries, it is now going to cost us, unless we change it, millions of high-tech information technology jobs as well.

Mr. Speaker, I want to place into the Record a recent press release from the University of California at Berkeley. Its headline is, ``UC Berkeley Study Assesses Potential Impacts of Second Wave of Outsourcing Jobs From the U.S.,'' and this is the way it begins: ``A ferocious new wave of outsourcing of white collar jobs is sweeping the United States. According to a new study published by the University of California Berkeley, researchers say the trend could leave as many as 14 million service jobs in the United States vulnerable. Study authors, who are both researchers at the Fisher Center for Real Estate and Urban Economics housed at UC Berkeley's Haas School of Business, say that not all of the jobs are likely to be lost, but they note that jobs remaining in the United States could be subject to pressure to lower wages, and that the jobs that leave may slow the Nation's job growth or generate losses in related activities.

What are those jobs? Well, if you are a telephone operator, watch out. If you deal with health records, if you are a payroll clerk, if you are a legal assistant or a paralegal, if you are an accountant, if you are a financial research analyst, if you work behind a computer, there are folks in India, there are folks in China who can do that job for a fraction of the pay that you are being paid, and your boss is interested in taking that job there.

Now, let me be very clear, Mr. Speaker. The United States needs to have a strong and positive relationship with China. I very much respect the Chinese people, and I am not here attacking China. I am here saying that the President of the United States, corporate America, and the United States Congress have sold out the American worker. China is doing fine. We do not have to criticize them. They are doing very, very well. They just sent a man into space. Their economy is exploding. The problem is not China. The problem is that corporate America, and all of their money, have influenced the United States Congress and the President of the United States. And not just this President, but Mr. Clinton, but Bush the first, but Ronald Reagan before him, into a trade policy which is a disaster.

The bottom line is that American workers should not and cannot be asked to compete against desperate people who make 30 cents or 40 cents an hour. That is wrong.

Now, trade in itself is a good thing. I am not anti-trade. But we need a trade policy, and I know how heretical it is to say this, but we actually need a trade policy that works for America and not just large multinational corporations. We need a trade policy that is fair for the American workers. We want to export our products that are manufactured by American workers, not export the jobs that American workers have. When the New York Yankees are engaged in trade, they do not engage in free trade by which they trade their best ball player for a third- string, minor leaguer, they do not do that. The United States has the most lucrative market in the world, and we are giving it away. Let us engage in trade that works for us, that works for the other side; not engage in trade which is decimating American manufacturing and increasingly, high-tech jobs.

Now is not the time to engage in an accelerated race to the bottom. We should be talking about how wages go up, not down; how poverty is eliminated, not increased. And that is why we need to change our trade policies, and that is why, Mr. Speaker, I have introduced H.R. 3228, which would repeal permanent Normal Trade Relations with China. Let us get it out in the open. Let us not be talking about currency. It is important, but it is not the major issue. The major issue is that our trade agreement with China, permanent normalized trade relations is a disaster. We have to repeal it, and then we can engage in a fair trade agreement with China and with other countries.

I am very happy, Mr. Speaker, to tell my colleagues that since we have introduced that legislation just a few weeks ago, we have garnered 54 cosponsors and it is strongly bipartisan, 14 Republicans are on board that legislation right now, and I appreciate that. We have a tripartisan piece of legislation, and it is something that I know

the American people support. If any person in the House of Representatives or elsewhere wants to learn more about that legislation, we have written it up on our Web site which is www.bernie.house.gov. We have a lot of information there about trade and many other important information about what is going on in Congress.

Mr. Speaker, when we talk about the decline of the middle class, when we talk about unemployment going up, wages going down, the loss of decent-paying jobs, we should also talk about what is happening to the quality of life of so many people in our country. We should recognize that the average American today is working incredibly long hours in order to pay the bills. Today, in fact, the average American employee works, by far, the longest hours of any worker in the industrialized world, and that situation is getting worse.

According to statistics from the International Labor Organization, the average American last year worked 1,978 hours, up from 1,942 hours in 1990. That is an increase of almost 1 week of work. Since 1990, the average American is now working an additional week a year.

Now, I see those workers in the State of Vermont and I see them all over the country. They are stressed out. They do not have enough vacation time. They are working day and night just to pay the bills. Again, we want to ask ourselves this simple question: What is going on in our country when we have increased productivity, more technology and, yet, more and more workers earning lower real, inflation-accounted for wages, and they are working incredibly long hours? What is going on in our economy?

The bottom line there is that we have got to begin to create an economy that works for the middle class and not just for the very, very rich. We have to create an economy where people are earning more income so they can work fewer hours, so they have more time to spend in leisure and with their kids and with their families.

I have talked, Mr. Speaker, about what is going on with the middle class. I have talked a little bit about the conversion from a manufacturing society, a General Motors society to a service industry economy, a Wall Street economy. But let us look for a moment at those people who are not even in the middle class. They have not made it into the middle class, those people who are living in poverty. Sadly, Mr. Speaker, while the rich become richer, 1.3 million more Americans became poor and entered poverty just in the last year.

We now have 34.8 million people who now live in poverty. In the midst of those people, Mr. Speaker, and what is happening, people we have got to ask about the 11 million Americans who are trying to survive on the pathetic minimum wage of $5.15 an hour.

And I wonder how it is that in this great institution we can lower taxes for billionaires, but I have not heard one word from the President of the United States about the need to raise the minimum wage above the pathetic level of $5.15 an hour.

Now, how does somebody survive who makes $5.15 an hour or $6 an hour. Does anybody care? Well, I will tell you how some of them do it. After working 40 hours a week, some of these workers, full-time employees, go to sleep, not in their houses, not in their apartments, but in their automobiles because they cannot afford the housing units that are available in their region.

And what, Mr. Speaker, about the 43.6 million Americans who lack any health insurance at all? What happens to those people? That is over 15 percent of our population. And what about the 3\1/2\ million people who will experience homelessness this year, 1.3 million of them children? And what about our elderly citizens who cannot afford their prescription drugs, who shrug their shoulders and nod their heads when doctors write out a prescription because they do not have the money to fill those prescriptions? How many of them die? How many of them see a deterioration in their health?

And what about the veterans, the veterans who have put their lives on the line defending this country and then try to get into a VA hospital that they are entitled to get into but they find out that they have to be placed on a waiting list? They were not placed on a waiting list when they were going off to fight, but now to get the health benefits they are entitled to, they are placed on a waiting list.

And just last year the President of the United States, after giving huge tax breaks to the richest 1 percent, threw over 150,000 veterans off of VA health care. Tax breaks for billionaires, inadequate funding for our veterans.

In the last several years we have seen huge increases in health insurance costs. And with the increase of unemployment, we have seen more and more working people lose their health insurance. And what happens to those people? What happens if you have no health insurance and you have an automobile accident and you end up in the hospital? Well, I tell you what happens. You go bankrupt. And the largest single cause of bankruptcy, personal bankruptcy in this country are for people who cannot pay the medical costs that have been generated because of an accident or an illness.

Mr. Speaker, our health care system today is a disgrace and is in a state of disintegration. More and more people are uninsured and more and more people are underinsured, that is, they have to pay higher and higher copayments, higher and higher deductibles, higher and higher premiums. There are millions of Americans today who have insurance, but who hesitate to go to the doctor when they should be going because they cannot afford the deductible and the copayment. And doctors will tell you that the patients they are seeing today are far sicker than the patients they used to see because people simply cannot afford payments out of their own pocket.

In my mind, the only solution to our health care crisis, the only right thing to do to really address the disintegration of our health care system is to do what every other major industrialized nation on Earth has done, and that is to move toward a national health care system which guarantees health care to every man, woman, and child as a right of citizenship.

The reality of our health care nonsystem is not only that 43 million Americans are uninsured, not only that more and more are underinsured, not only that we pay the highest prices in the world for prescription drugs; but the reality is that this system is the most wasteful and bureaucratic system in the world. Many people do not know this, but in the United States we spends twice as much as the Canadians, three times as much per person as the United Kingdom spends. And those countries provide health care to all of their people.

And study after study shows that if we moved toward a single-pay national health care system, we can guarantee health care to all of our people, quality health care, freedom of choice for the doctor that you want to go to and not spend one penny more than we are currently spending on our disintegrating nonsystem. And, Mr. Speaker, that is what we have got to do. We can no longer tolerate the disgrace of tens of millions of people being uninsured, people going bankrupt because they get ill, people delaying going to the doctor.

In areas of this country dental care is a disaster. Children have rotting teeth in their mouths because there are no dentists who will treat them or dentists available in the area. We need to finally move toward a national health care system and make health care a right of all people.

Now, Mr. Speaker, those are some of the problems facing our country. Poverty is increasing. Middle class is shrinking. Rich are growing richer. Large corporations and their CEOs, while they hide behind the American flag and they tell us how much they love America, they are prepared to throw millions of American workers out on the street and move to an authoritarian China because they can make more money there.

Now, I wish I could say, Mr. Speaker, that the Bush administration is in any rational way responding to these problems. But I think it really would be impossible to say that. Instead of addressing the very serious problems facing our veterans, facing our children, facing public education, facing the fact that middle-class families are finding it harder and harder to send their kids to college, instead of addressing the crisis of the high cost of prescription

drugs, the proudest achievement of the Bush administration is huge tax breaks, 40 percent of which went to the wealthiest 1 percent.

And in the midst of all of this, in the midst of workers working longer hours for lower wages, the decline of manufacturing, the Bush administration, if one can believe it, is now attacking overtime pay for American workers. Can you imagine that? Attacking overtime pay for American workers and trying to undo laws that have been on the books for decades which say that if you work over 40 hours a week you will get time and a half.

I am very proud that a number of Republicans joined many of us Democrats, Independents, on the floor of this House to say that that is wrong and that in fact we were not going to cut back on the overtime pay that workers earn and deserve.

Now, when we talk about the Bush administration, we should also point out a very strange irony. The President considers himself a conservative. That is fine. But, generally speaking, conservatives have told us over and over again, year after year after year, what a terrible thing it is to grow the deficit and grow the national debt because when you do that they have told us, and they were right, you are simply passing on today's problems to our children and our grandchildren. Over and over again I have heard from these podiums right here how terrible it is to grow the deficit. Well, guess what? We now have the largest deficit this year in modern American history and the largest national debt that we have ever had.

In the midst of that and accelerating that deficit and accelerating that national debt are the huge tax breaks that the President and the Republican leadership have given to the wealthy.

Now some people, many conservatives, they say why would a conservative President grow the deficit and grow the national debt. That is not conservative. Let me suggest my view as to why they are doing that. We can all understand that if the wealthy contribute large amounts of money, you are going to give them a tax break. I think that is obscene, but that is nothing new; that is politics. But there is something more cynical going on here. That is, I believe, by driving up the national debt and the deficit, what the President is saying is that we will be so deeply in debt that we have got to tear apart many of the important social programs that have protected tens and tens and millions of Americans.

It is my opinion that in many respects this President wants to undue many of the major gains that were won by working people over the last 100 years and bring us back to the 19th century where workers had no guarantees, and when trouble struck them and their families, they were dependent on charity and the largess of the wealthy.

I think that is one of the reasons why this national debt is going up, so the President and future Presidents will be able to say we can no longer afford to maintain Social Security; let us privatize it. We can no longer afford to protect Medicare; let us privatize it. Let us do away with Medicaid. Let us do away with the Veterans Administration. Let us do away with Pell grants. We cannot afford it. I think what this administration is doing, and this is the most right-wing administration in modern history, is essentially trying to remove all of the protections that the elderly, the poor, the sick, and the young have and were won over the last 100 years. That is what I think is going on, and I think that is a very, very dangerous trend.

Mr. Speaker, let me conclude my remarks by mentioning that this weekend I am going to be going to Madison, Wisconsin, to participate in a major media conference where we expect some 1,500 people from all over the country. I want to congratulate some of the organizers of that conference, Bob McChesney, John Nichols and many others for putting it together. The issue that they are going to be talking about and I will be talking about is the danger that faces our country when a handful of huge media conglomerates increasingly own and control what we see, hear, and read.

On June 2, the FCC by a 3-2 vote voted to make a bad situation worse and to allow even fewer large media conglomerates to control more and more media. That certainly will be one of the many issues that that conference will be dealing with.

I believe it is a very frightening day for democracy when so few large corporations control so much of the flow of information in this country. And if we are not able to overturn that FCC decision, and I and many of us are working hard on that, the day could come in the not- too-distant future where in a community like Burlington, Vermont, you can have one company owning the major television station, the major newspaper, and a number of radio stations. That is one of the rules that was undone; the prevention of that was one of the rules that the FCC just eliminated.

Now the good news is that the United States Senate, the other body, voted for a resolution of disapproval against that by a 55-40 vote. Liberals and conservatives came together, Republicans and Democrats came together and said that is not what media should become in America.

Mr. Speaker, I have a letter which has 205 signatures on it for the Speaker of the House, and it says to the Speaker, let the U.S. House of Representatives have a vote on doing what the other body did. Let us also have the opportunity to vote for a resolution of disapproval regarding the FCC decision. Three million Americans have contacted the FCC, and I think we should listen to those Americans, and I think the Speaker should give us a vote.

Mr. Speaker, as the only independent in the House of Representatives, not a Democrat, not a Republican, I want to take this opportunity to share some ideas that many Americans may not get a chance to hear very often. One of the concerns and one of the most important issues that I think is facing this country is increased corporate control over the media and the fact that fewer and fewer large corporations control what we see, what we hear and what we read.

What concerns me about that is not just that, for example, the Disney Corporation has just announced that it will not distribute Michael Moore's new film, Fahrenheit 9/11. They will not distribute that as had been previously arranged, because it is apparently too critical of President Bush and that it also might endanger some tax breaks that the Disney Corporation gets in Florida through President Bush's brother, the governor, there. That concerns me. That is not my major concern.

And it is not just that recently, as I think most Americans know, Sinclair Broadcasting, a right-wing company, decided that it would not carry Ted Koppel and Nightline's sensitive and respectful tribute to the over 700 young men and women who have been killed in Iraq, because somehow Sinclair believed that that was too political, too antiwar. Apparently it is not appropriate for the American people to actually see the face of war and the men and women who have died in that war.

But that is not my major concern about corporate control over the media and it is not just that when we turn on commercial talk radio, what we hear almost always, and with few exceptions, is the fact that there are extreme right-wing voices out there who pound away at right- wing themes and despite the fact that our Nation is almost equally politically divided, for millions of Americans, their only option on talk radio is one right-wing extremist after another. That is a concern, but not my major concern.

My major concern when I talk about corporate control over the media is that while we get inundated every single day by stories of Michael Jackson or Kobe Bryant or Martha Stewart or Britney Spears or a host of other celebrities, what we do not hear about much in the media and what we do not hear much about on the floor of Congress is the reality of what is happening to the middle class of this country, what is happening to ordinary working people. That, in fact, is the most important issue that we should all be talking about. It is the most important issue that the media should be focusing on and that Congress should be discussing.

So let me talk a little bit about some of those issues today, not about Michael Jackson, not about Britney Spears, but about what is happening to the middle class of this country.

Mr. Speaker, let me be very blunt. The United States of America today is rapidly on its way to becoming three separate Nations, not one Nation, but three separate Nations. One part of that Nation is an increasingly wealthy elite composed of a small number of people with incredible wealth and economic and political power; a small number of people, tremendous wealth, tremendous power.

Then we have the second part of America, the largest part, which is the middle class, the vast majority of our people; and that middle class tragically is shrinking, getting smaller. It is a middle class where the average American worker is now working longer hours for lower wages; and that is what is happening to the middle class.

And then the third segment of our society are those people at the bottom, and that is a growing number of Americans who are living today in abject poverty, barely keeping their heads above water, barely paying the bills that they need in order to survive. And those are the three Americas: a handful of great wealth, great power; a shrinking middle class; and more and more people who are living in poverty.

Mr. Speaker, there has always been a wealthy elite in this country. That is not new, and there has always been in this country and in every country a gap between the rich and the poor; but the disparities in wealth and income that currently exist in this country have not been seen since the 1920s. In other words, instead of becoming a more egalitarian Nation with a growing and expanding middle class, we are becoming a Nation with by far the most unequal distribution of wealth and income in the industrialized world. In other words, we are moving in exactly the wrong direction.

Today, the wealthiest 1 percent of Americans own more wealth than the bottom 90 percent. The wealthiest 1 percent of Americans own more wealth than the bottom 90 percent. The CEOs of the largest corporations in America today earn more than 500 times what their employees are making. While workers are being squeezed, while workers are being forced to pay more and more for health insurance, while their pensions are being cut back and promises made to them being swept back under the rug, while retiree benefits are being cut, while workers' jobs in this country are being sent abroad, the CEOs of the largest corporations make out like bandits. Their allegiance is not to their employees; it is not to the American people. It is to their own bottom line.

I am not just talking about the crooks who ran Enron, WorldCom or Arthur Andersen, all of those companies. I am talking about the highly respected CEOs, like the retired head of General Electric, Jack Welch, who, when he retired in 2000, received $123 million in compensation, and $10 million a year in pension for the rest of his life; and he did that after throwing many, many thousands of American workers out on the streets as he moved his plants abroad.

And I am talking about people like Lou Gerstner, the former CEO of IBM, who received $366 million in compensation while slashing the pensions of his employees. And I am talking about Charles A. Heimbold, Jr., of Bristol-Myers Squibb, who received almost $75 million in 2001 while helping to make it impossible for many seniors in this country to pay the outrageously high prices that his company and other companies are charging for prescription drugs.

Mr. Speaker, today this Nation's 13,000 wealthiest families who constitute 1/100th of 1 percent of our population receive almost as much income as the bottom 20 million families in this country; 1/100th of 1 percent earn

almost as much income as the bottom 20 million families in the United States.

New data from the Congressional Budget Office show that the gap between the rich and the poor in terms of income more than doubled from 1979 to 2000. In other words, what we are seeing is movement in the wrong direction. The gap is so wide that the wealthiest 1 percent had more money to spend after taxes than the bottom 40 percent.

According to data from the Congressional Budget Office between 1973 and 2000, the average real income, inflation accounted for income of the bottom 90 percent of American taxpayers actually fell by 7 percent. Meanwhile, the income of the top 1 percent rose by 148 percent and the income of the top 1/100th of 1 percent rose by 599 percent. Middle class shrinking, people working longer hours for lower wages, the very, very wealthiest people in this country seeing huge increases in their income.

Mr. Speaker, in my view, growing income and wealth inequality is not what America is supposed to be about. A Nation in which so few have so much and so many have so little is not what America is supposed to be about.

Mr. Speaker, it is increasingly common to see people in our country in today's economy work not at just one job but at two jobs, and occasionally it is not uncommon to see American workers have three jobs. Is that what this global economy in which we were promised so much is supposed to be about?

When some of us were growing up, the expectation for the middle class was that one worker in a family could work 40 hours a week and earn enough income to pay the family's bills. One worker, 40 hours a week. Well, in my State of Vermont and all over this country, it is increasingly uncommon when that occurs. In my State and all over America, the vast majority of married couples have both husband and wife out in the workforce. Sometimes that is the way they want it to be, but more often than not it is the way it has to be because inadequate wages and inadequate income require two breadwinners to work incredibly long hours in order to pay the family's bills. And then with husband and wife out working, we wonder and we are surprised when kids do not get the attention that they need and when kids get into trouble. Well, we should not wonder too much as to why that happens.

Mr. Speaker, in terms of what is happening to the middle class, we have lost over 2.6 million private sector jobs in the last 3 years; and with 8.4 million workers unemployed, unemployment today is at 5.7 percent officially. In real truth, however, the unemployment numbers are much higher than that because there are a lot of unemployed and underemployed people who do not fall within the official unemployment statistics. These are the people who are working part-time because they cannot find full-time jobs, and those numbers are soaring. We have seen an increase of 300,000 part-time jobs just last month. And there are people who are not counted as part of the unemployment statistics because they have given up looking for work when they are located in high unemployment areas.

Furthermore, there are millions of people today who are counted as employed, but are working at jobs that are far below their educational levels and their skill levels; but they also count as part of those people who are employed.

Now, when we talk about unemployment and we talk about the economy, one of the more important points to be made is that since the beginning of the Bush administration we have lost 2.8 million manufacturing jobs in our country; 2.8 million manufacturing jobs. That is an issue that I want to spend a moment on because what is happening in manufacturing today is a disaster for this country and bodes very, very poorly for our future.

The bottom line is, and Congress must finally recognize this, that our trade policies are failing. They are failing. NAFTA has failed, our membership in the WTO has failed; and perhaps above all, permanent normal trade relations with China, PNTR with China, has failed. The time is now, and it is long overdue for the United States Congress to stand up to corporate America, to stand up to the President of the United States, to stand up to editorial writers all over this country, all of whom have told us year after year after year how wonderful unfettered free trade would be.

Well, they were wrong. The answer is in. They were wrong. These people told us that unfettered free trade would create new jobs. Instead, we have lost millions of jobs, and we have run up a record- breaking trade deficit. They told us that unfettered free trade would improve the standard of living of the middle class; they were wrong. Real wages have gone down or have stagnated for millions of American workers.

Let us be very clear. The decline of manufacturing is one of the reasons why our middle class is shrinking and why wages for middle- class workers are in decline. When we talk about the loss of almost 3 million private sector jobs in the last 3 years, we should appreciate that the vast majority of that job loss has taken place in manufacturing. Further, the collapse of manufacturing is one of the reasons that real inflation accounted for wages have declined.

Today, American workers in the private sector are earning 8 percent less than they were in 1973. Now, just think for a moment, just for one moment let us take a look at this rather incredible piece of information. Every American knows that in the last 30 years there has been an explosion in technology. We all know what computers have done. We know what e-mail has done; we know what faxes and cell phone and satellite communications have done. We know what robotics in factories has done. In other words, we are a much more productive Nation than we were 30 years ago, and almost every worker in our economy is producing more.

Given the fact that productivity is expanding and increasing, that technology is exploding, what common sense might suggest is that workers today would be working fewer hours and earning more money because of the increase in productivity. But the reality is exactly the opposite. Why is it that in 1973, the average American worker, in inflation accounted for wages, made $14.09 per hour, while in 1998, 15 years later, he or she made only $12.70 per hour, a significant decline in real wages? And that is, to my mind, one of the most important economic issues that we have to deal with, productivity going up, technology exploding, and yet the real wages for millions of American workers is declining and the middle class is shrinking.

Let us be honest and acknowledge that manufacturing in this country today is in a state of collapse. In the last 3 years, we have lost 16 percent of all manufacturing jobs, 16 percent in the last 3 years, and we are back to levels that were last seen in the 1950s, early 1950s. We only have 14.3 million manufacturing jobs.

And, Mr. Speaker, here is the tragedy. People would not be all that upset if when we lost manufacturing jobs, if the new jobs that were created were paying as much or more as the manufacturing jobs that we lost. But the fact of the matter is that when we are losing manufacturing jobs, we are losing jobs that pay in almost every instance a living wage. In Vermont manufacturing, for example, pays over $42,000 a year. That is a good wage and those jobs often have good benefits. And what is happening now is that the new jobs that are being created which are replacing the old jobs that we are losing are paying significantly lower wages with significantly lower benefits than the manufacturing jobs that we have lost.

According to a study by the Economic Policy Institute, the new jobs being created in America on average pay 21 percent less than the jobs we are losing. So despite what some politicians and what corporate leaders might tell us, the trend is not toward better-paying jobs. The trend is toward lower-paying jobs with fewer benefits.

When we talk about the economy not only for the current generation, but for our children and for our grandchildren, the key question that we should be asking is what kind of new jobs will be created in the future? Will these jobs be good paying? Will they be challenging jobs that a well-educated American population can jump into with enthusiasm? Are those the kinds of jobs that will be available for our kids and for our grandchildren, or is it,

in fact, going to be something very different? Because when we talk about the future of America, to a large degree that is what we are talking about. What kinds of new jobs will be created in the future?

In that regard, the Bureau of Labor Statistics every 2 years does an important study forecasting the top ten occupations that will have the largest job growth in a 10-year period. In this case, the Bureau's forecast which was released on February 11, 2004, covers the years 2002 through 2012, a 10-year period.

And let me quote from Business Week Magazine as to what the results of that study showed: ``According to a forecast released February 11 by the Federal Bureau of Labor Statistics, a large share of new jobs will be in occupations that don't require a lot of education and pay below average.'' And pay below average. Those are the jobs, the newly created jobs, that our children and our grandchildren will be looking forward to receiving, jobs that require minimal education and pay low wages. The fastest growing of all of those jobs will be for medical assistance, nursing aides, orderlies and attendants, jobs that require nothing more and ``moderate on-the-job training.''

So the key point here is that instead of creating an economy where future generations will be challenged with jobs that require good education, good skills, the new jobs that are being created will require high school degrees. They will be low wage. They will have minimal benefits. In fact, of the ten occupations pinpointed by the Bureau of Labor Statistics, seven of them require only a high school degree; two require college degrees; and one an associate's degree, a 2-year education in college.

And that is an issue, in my view, that we should be paying a great deal of attention to because, Mr. Speaker, it tells us that a profound lie is being perpetrated on the American people. It tells us that unless we fundamentally change our public policies and do that very quickly, the middle class will continue to shrink and the jobs being created for the coming generations will be, by and large, low-wage and unskilled work, and that, in my view, is not what we want the future of America to be.

Mr. Speaker, when we talk about the economy and when we talk about trade and manufacturing, let us remember that in the year 2003, the United States had a $500 billion trade deficit, $500 billion record- breaking trade deficit. In 2003, the trade deficit with China alone, one country, China, was over $120 billion and that number, trade deficit with China, is projected to increase in future years. In recent years that deficit has gone up and up and up. In 1990, it was $11.5 billion; in 2001, it was $83 billion; 2002, $103 billion; in 2003, it was $120 billion.

The National Association of Manufacturers estimates that if present trends continue, our trade deficit with China will grow to $330 billion in 5 years, and that means, of course, that we are importing more and more and the gap between what we are importing and what we are exporting is growing wider and wider.

Mr. Speaker, our disastrous trade policy is not only costing us millions of decent-paying jobs, it is squeezing wages. Many employers are making it very clear that if workers do not accept cuts in their health care coverage or do not take cuts in wages that they will be moving their operations to China, to Mexico, to India, or to other developing countries. Today, wage growth is the slowest in 40 years. Millions and millions of Americans are working incredibly long hours, and yet they are not making anything more than they made a year ago.

One of the sectors of our economy, and we do not talk about this too much, where people are being hurt the most is among young workers without a college education. Not everybody goes to college. For entry level workers without a college level education, the real wages that they have received dropped by over 28 percent from 1979 to 1997, which are the latest figures that I have seen. And the drop for women during that period was only 18 percent. And the reason for that is quite clear.

Twenty-five or 30 years ago, if someone did not go to college, and most people did not, what they would have been able to do is to go out and get a job in manufacturing, and millions of workers did just that. And with those wages and with those benefits, people without a college degree were able to enjoy a middle class life-style. They were able to take care in an adequate way for their kids. They were able to save up so that their kids could have a better life than they did.

But all of that is changing now, and when young people leave high school and do not go to college, the job opportunities for them are most often very limited. There are jobs available at McDonald's, at Wal-Mart, at service industry jobs like that, but unfortunately those jobs pay low wages and do not allow people to earn a middle class income.

Mr. Speaker, what is happening to our economy today can be best illustrated by the fact that not so many years ago, the largest employer in America was General Motors, and workers in General Motors earned and still earn a living wage somewhere around $26 an hour with very strong benefits and with a strong union to represent their needs. Today, in contrast, our largest employer, private employer, is Wal- Mart, and that is what has happened to the American economy. We have gone from a General Motors economy where people produce real products, earn good wages with good benefits, to a Wal-Mart economy where people earn low wages and minimal benefits.

Today Wal-Mart employees earn $8.23 an hour or $13,861 annual. These are wages, paid by the largest employer in America, that are below the poverty level. And that is what the American economy is about today. The largest employer in America, Wal-Mart, pays its workers below- poverty wages. In fact, many of these workers qualify for the Federal Food Stamp program, which means that Wal-Mart is being directly subsidized by U.S. taxpayers.

Obviously Wal-Mart is not the only company receiving welfare from the taxpayers of this country, but they are the largest. Wal-Mart has been sued by 27 States for not paying the overtime pay their workers are entitled to. And not so long ago, Federal agents raided their headquarters, and 60 of their stores across the country, arresting 300 illegal workers in 21 States. Wal-Mart is vehemently anti-union and will do everything that it can to make sure that workers in a Wal-Mart store do not have the rights to collectively bargain.

Mr. Speaker, a recent study indicated that for every Wal-Mart superstore that employed 200 workers, taxpayers were subsidizing their low-paid workers to the tune of $420,000 per year, which equates to about $2,100 per employee. In other words, we have the absurd situation that many of the employees at Wal-Mart need Federal help in order to keep their families alive, whether it is food stamps, whether it is health care for their children or for themselves, whether it is subsidized housing. So you have the taxpayers of this country pouring huge amounts of money into subsidizing Wal-Mart's employees.

Meanwhile, and what an irony this is, five out of the 10 wealthiest people in America are in the Walton family, the family that owns Wal- Mart. They are each worth, each one of the five, are worth $20 billion each, collectively $100 billion. And last year the Walton family of Wal-Mart saw an $8.5 billion increase in their wealth. So what you have is one of the richest families in America growing much richer. We are seeing Wal-Mart workers earning subsistence wages, and you are seeing the taxpayers of this country forced to subsidize those workers because they cannot earn a living wage in Wal-Mart.

What an outrage. One of the richest families in America sees a huge increase in their wealth, and they need Federal help in order to keep their workers alive. This is something that should not continue to go on.

That, Mr. Speaker, is what the transformation of the American economy is all about. We have gone from an economy where workers used to work producing real products, making middle-class wages with good benefits, to a Wal-Mart-style economy where our largest employer pays workers poverty wages with minimal benefits, and, in the process, has a huge turnover.

Incredibly, since 1989, 98 percent of the new jobs created in the United States have been in the service sector,

where on average workers earn substantially less than they do in manufacturing.

Mr. Speaker, before I talk about China and my great concerns about our current trade relations with China, let me say a few words about the North American Free Trade Agreement, NAFTA. That is an agreement, as you know, that the President wants to expand into a Free Trade Agreement for the Americas.

In 1994, the United States had a $2.4 billion trade surplus with Mexico. That was pre-NAFTA. Today, 10 years later, we have a $36 billion trade deficit with Mexico, one of the results of NAFTA. Through the end of 2002, the United States lost over 879,000 jobs as a result of NAFTA, jobs that formerly existed and were eliminated, as well as those created in other countries instead of here as a result of the growing U.S. trade deficit. Nearly 80 percent of those job losses were in manufacturing industries.

Now, some people, they think, well, if NAFTA was bad for the United States in terms of job loss, then it must have been good for our friends in Mexico and Mexican workers. Well, guess again. NAFTA has been a disaster for the poor and working people of Mexico.

Since 1994, when NAFTA went into existence, the number of people classified as poor or extremely poor has risen from 62 million to 69 million out of a population of 100 million. Since 1994, Mexico's agricultural sector has lost well over 1 million jobs, and NAFTA has played a major role in decimating rural employment on farms in Mexico.

Frankly, Mr. Speaker, in hindsight, it did not take a genius to predict that unfettered free trade with countries like China would be a disaster. In all honesty, if we check the Congressional Record, what is happening now in terms of trade and its impacts on American workers is precisely what many of us predicted would happen.

Why should we be surprised about what is happening? With educated, hard-working Chinese workers available at 20 cents an hour or 30 cents an hour or 40 cents an hour, and with corporations having the capability of bringing their Chinese-made products back into the United States tariff-free, why would American multinational corporations not shut down their plants in this country and move to China? Why would they not?

Essentially, the trade agreement we established with China says to them, throw American workers out on the street. Go to China; hire cheap labor and bring your product back here. That is what many of us predicted over the years when the debate about most favored nation status with China was taking place; and that, of course, is precisely what has occurred.

Mr. Speaker, General Electric, as we all know, is one of the largest corporations in America. Here is what their CEO, a gentleman named Jeffrey Immelt, had to say about China at a GE investor meeting on December 6, 2002, a year and a half ago. This is Mr. Immelt, CEO of GE: ``When I am talking to GE managers, I talk China, China, China, China, China. You need to be there.'' This is what he is saying to GE plant managers.

Then he continues: ``I am a nut on China. Our sourcing from China is going to grow to $5 billion. We are building a tech center in China. Every discussion today has to center on China. The cost basis is extremely attractive.''

What Mr. Immelt is saying is, frankly, what almost every CEO of a major corporation in America is saying, and they are saying, see you, American workers. We are out of here. We do not have to pay you a living wage. We are going to China.

China, for CEOs of American corporations, is a wonderful, wonderful place to do business. Do they have to worry about democratic rights in China? Of course not. If workers stand up for their rights, they go to jail. If workers try to form a union, they go to jail. There are virtually no environmental protection regulations in China, a very polluted country. So for corporations like General Electric, China becomes a wonderful place to work, and that is why they are moving there as fast as they can.

Should anybody in this country be surprised that Motorola, another major corporation in America, eliminated almost 43,000 jobs in this country in 2001, while investing $3.4 billion in China? Who is shocked that General Electric has thrown hundreds of thousands of American workers out on the street, while investing billions in China? Boeing, another great American corporation, has laid off 135,000 American workers, while it has increased outsource design work to China, Russia, and Japan.

In the last 30 years, General Motors has shrunk their U.S. workforce by over 250,000. IBM has signed deals to train 100,000 software specialists in China over 3 years. Honeywell is going to China. Ethan Allen Furniture is going to China. And on and on it goes. In fact, the exception to the rule is that company that says, we are going to grow jobs in the United States of America.

In terms of General Motors, just a few months ago that company announced plans to increase by 20-fold, 20 times, the number of auto parts it buys from China and uses in the U.S., Europe, Mexico, elsewhere, a 20-fold increase. According to the Detroit Free Press, ``GM, the world's largest auto maker, will more than double the number of parts it buys in China for cars it makes there, going from $2.8 billion for Chinese parts to $6 billion annually.''

There are people who believe that that move might be the beginning of the end for auto manufacturing in the United States and all of those decent-paying jobs that exist there.

Mr. Speaker, one of the most distressing aspects of this entire discussion regarding our economy is the degree to which the Bush administration has sold out the needs of American workers. Let me quote from a recent report written by Mr. Gregory Mankiw, the President's Chief Economic Advisor. Here is the man who is the President's major adviser on economic issues. Here is what he says on page 25 of the report that he sent to Congress: ``When a good or service is produced at lower cost in another country, it makes sense to import it, rather than produce it domestically.''

In case you did not fully get it, let me read it again: ``When a good or service is produced at lower cost in another country, it makes sense to import it, rather than to produce it domestically.''

Let us think for a moment what Mr. Mankiw, the President's Chief Economic Adviser, has just told the workers of the United States. What he has said is that companies should throw you out on the street because they can produce cheaper in China and in other countries, where wages are a fraction of the price that they in the United States of America. That is what companies should do. That is what the President's Chief Economic Adviser is telling corporations: go abroad, if you can produce cheaper.

What is wrong with that? Well, what happens to the many millions of American workers who lose their jobs? Well, apparently the President's economic adviser and the President himself are not worried too much about that. They are more worried about corporate profits and the ability of companies to produce with workers who are paid 30 cents an hour.

Over the years, Mr. Speaker, advocates of unfettered free trade have tried to gloss over the bad news about the decline in factory employment by promising us that a new high-tech economy was in the making.

In other words, American workers, do not worry. Yes, it is true you are going to lose jobs. In auto manufacturing, in steel, in textiles, in footwear, in almost every industry, you are going to lose those blue collar jobs. But you do not have to worry about that, because there is a new high-tech economy that is being developed, an information technology. You do not have to work in those loud, noisy factories. You and your kids are going to be able to have those wonderful jobs, high- paying jobs in quiet offices, and all you have to do is learn how to master the computer and become an expert in information technology, and those great jobs will be there for you and your kids.

We have heard that mantra over and over and over again: yes, we lose blue collar; but we are going to gain high-paying white collar jobs. We do not have to worry about that old economy any more. We have got a new economy coming.

Well, I think that many Americans are beginning to catch on that the people who told us that are dead wrong in

terms of the future of this country; that in fact not only have we lost and we will continue to lose good-paying blue collar manufacturing jobs, we are now at the cusp of beginning to lose millions of even better-paying white collar information technology jobs.

In 2003, the estimate is that the United States lost 234,000 information technology jobs. Many of them ended up in India, which saw a gain of over 152,000 information technology jobs.

When Americans argue with the phone company as to whether or not they are being ripped off, more often than not, they are going to be talking to somebody in India. When you are trying to figure out how to get your computer working again, as often as not you are going to be talking to somebody not in New York, not in L.A., but in India.

One of the new areas where information technology jobs are leaving the United States is in tax preparation. Tax experts say that Indian Chartered Accountants, and that is India's equivalent to our CPA, certified professional accountants will prepare 150,000 to 200,000 returns this year, up to 20,0000 something returns in 2003. In other words, so long as there is a skilled worker behind a computer, and there clearly are skilled workers in India, China, the former Soviet Union countries, they are prepared and will and can do the work that Americans used to do at a fraction of the wages that Americans have earned.

Among many other companies moving high-tech jobs abroad is Microsoft, which is spending $750 million over the next 3 years on research and development, and outsourcing in China. Recently, Intel Corporation Chairman Andy Grove warned that the U.S. could lose the bulk of its information technology jobs to overseas competitors in the next decade, largely to India and China. In other words, Mr. Speaker, not only has our unfettered free trade cost us much of our textile industry, footwear industry, steel, tool and dye industry, electronics, furniture, as well as many, many other industries, it is now going to cost us, unless we change it, millions of high-tech jobs as well, and the future of our economy.

Lou Dobbs who, in my view, has done an excellent job on CNN talking about this issue, reported on a recent University of California at Berkeley study warning that as many as 14 million white collar jobs in the United States could be shipped overseas to India, China, and other countries, representing 11 percent of all U.S. employees. These jobs include over 2.8 million computer and math professionals with average salaries of over $60,000 a year, and over 2.1 million business and financial service support jobs with average annual salaries of over $52,000. And what the University of California at Berkeley study showed is that there is ``A ferocious new wave of outsourcing of white collar jobs'' which is sweeping across America. And we know why American companies will be going to India and elsewhere, because the wages are a fraction of what they are in this country.

In the U.S., a telephone operator earns $12.57 an hour; in India, less than a dollar an hour. A payroll clerk in the U.S. averages over $15 an hour, while in India, it is less than $2 an hour. An accountant in the U.S. makes over $23 an hour, while in India that wage is between $6 and $15 an hour.

Jobs most vulnerable to this new wave of outsourcing the researchers tell us include medical transcription services, stock market research for financial firms, customer service call centers, legal online database research, payroll and other back-office activities.

Mr. Speaker, last month, I held a town meeting in Montpelier, Vermont dealing with the issue of outsourcing, and we had many, many hundreds of workers who came to that meeting and a number of them were employed by National Life, an insurance company in Montpelier, and these workers felt betrayed, sold out by the fact that National Life had now outsourced a number of jobs from that company which were going to India. In fact, some of these workers were being asked to train their Indian counterparts.

Mr. Speaker, let me be very clear on this issue. The United States needs to have a strong and positive relationship with countries like China and India. I am not antiChinese; I have a lot of respect for the Chinese people. And I am not antiIndian; I have a lot of respect for the people of India. I am an internationalist. In fact, it is my view that not only the United States, but every other industrialized country on earth has a moral obligation to do everything that we can to address the terrible poverty that exists all over this world, where 1 billion people are living on less than a dollar a day, where children are dying of preventable diseases, where people do not have access to clean water, where people cannot get affordable prescription drugs and die of preventable diseases.

The United States has a moral obligation to work with those countries to improve their health care systems, their educational systems, their infrastructures, to do everything that we can to improve the standard of living of those people. But, Mr. Speaker, we do not have to destroy the middle class of this country and wipe out millions of decent-paying jobs to help poor people abroad. We can and should help poor people, but we do not have to destroy what is best in our economy.

Mr. Speaker, the issue here is whether we continue to be engaged in a race to the bottom where American wages and the quality of our jobs and our working conditions goes down, down, down, or whether we are asking poor people in the world to see their wages and working conditions go up, up, and up. And unfortunately, we are moving today in the wrong direction.

Mr. Speaker, by definition, a sensible and fair trade agreement works for both sides, not just for one. Trade is a good thing. It is a good thing when it benefits both parties. The New York Yankees do not engage in free trade by exchanging their top ballplayer for a third-string, minor leaguer. They do not say, hey, we are opening up our roster, you can take anybody you want, you give us anybody you want, because hey, that is what free trade is about. They trade for equal value. Every time we go shopping and every time we buy a product, we are trading money for a product, equal value. And that is what we have to do in terms of our overall trade policy.

Trade is good when it works for America and it works for the other country. It is not good when it throws American workers out on the street, when it lowers wages, and when the only beneficiaries of it are the CEOs of large corporations who make huge compensation packages, earn huge compensation packages at the expense of American workers.

Mr. Speaker, in order to address some of these problems, I have introduced two pieces of legislation that would move us forward in protecting the middle class of this country and the decent-paying jobs that we have. The first bill that I have introduced is H.R. 3228 which would repeal once and for all permanent Normal Trade Relations with China. It will acknowledge finally that our current trade policies with that country, with China are a failure and that we need a new beginning. I am happy to say that this tripartisan legislation has garnered well over 50 cosponsors, including 14 Republicans. So we are beginning to move forward in a tripartisan way to establish positive trade relations with China and not one that is costing us huge-paying jobs.

The second piece of legislation that I have introduced, H.R. 3888, will end corporate welfare for those corporations who are laying off American workers and moving to China and other low-wage countries.

Mr. Speaker, it is not acceptable to me that taxpayers of this country are providing tens of billions of dollars in corporate welfare to the same exact companies who are saying to American workers, bye- bye, we are off to China. That is an insult to our working people and an insult to the taxpayers of this country.

Mr. Speaker, the corporate media does not talk about it too much, and we do not discuss it terribly much here in the Congress, but the United States of America is rapidly on its way to becoming three separate nations: An increasingly wealthy elite, a small number of people who have incredible wealth and incredible power; a middle class, the vast majority of our people, which is shrinking, where the average person is working longer hours for lower wages; and, at the bottom we

have a growing number of Americans who are living in abject poverty, barely keeping their heads above water.

Mr. Speaker, there has always been a wealthy elite in this country, that is not new, and there has always been a gap between the rich and the poor. But the disparities in wealth and income that currently exist in this country have not been seen since the 1920s.

In other words, instead of becoming a more egalitarian country, with a stronger middle-class, we are becoming a Nation in which the rich have more wealth and power, the middle-class is shrinking, and poverty is growing.

Mr. Speaker, today the wealthiest 1 percent own more wealth than the bottom 95 percent. One percent own more wealth than the bottom 95 percent. The CEOs of large corporations today earn more than 500 times what their employees are making. While workers are being squeezed, being forced to pay more for health insurance, while their pensions are being cut back, the CEOs of large corporations make out like bandits.

Mr. Speaker, the Nation's 13,000 wealthiest families, which constitute one one-hundredth of one percent of the population, receive almost as much income as the bottom 20 million families in the United States. One one-hundredth of one percent, more income than the bottom 20 million families. That, to my mind, is not what America is supposed to be.

New data from the Congressional Budget Office shows that the gap between the rich and the poor in terms of income more than doubled from 1979 to 2000. In other words, we are moving in exactly the wrong direction. The gap is such that the wealthiest 1 percent had more money to spend after taxes than the bottom 40 percent. The richest 2.8 million Americans had $950 billion after taxes, or 15.5 percent of the economic pie, while the poorest 110 million had less, 14.4 percent of all after-tax income. Once again, that is not what America is supposed to be. While the rich get richer and receive huge tax breaks from the White House, the middle-class is struggling desperately, in my State of Vermont and all over this country.

It is increasingly common to see people work at not one job, but two jobs, and occasionally three jobs. When I was growing up, the expectation for the middle-class was that one worker in a family could work 40 hours a week and earn enough income to pay the bills. Well, in the State of Vermont, and all over this country, it is becoming increasingly uncommon when that happens. Much more often than not, wives are forced to work alongside husbands in order to bring in the necessary income, and kids, in many instances, do not get the care that they need.

Unemployment in our country is now at a 9-year high. We are over 6 percent, and there are now over 9 million people who are unemployed. But in truth the real number is higher than that, because there are a lot of people who are working part-time because they cannot find full- time jobs, and there are a lot of people who are not part of the statistics because they have given up and are not actively seeking employment.

Mr. Speaker, of the 3.3 million private sector jobs that have been lost over the last 3 years, 2.7 million were in the manufacturing sector. This is an issue I want to spend a moment on, because what is happening in manufacturing today is a disaster for this country and bodes very poorly for the future of our Nation.

Mr. Speaker, the bottom line is, and this Congress must finally recognize it, our trade policies are failing. Permanent, normal trade relations with China has been a disaster. NAFTA has been a disaster. Our membership in the World Trade Organization has not worked for the middle-class and working families, for this country, and the time is long overdue for the United States Congress to stand up to corporate America, to stand up to the President of the United States, to stand up to all of the editorial pages all over America who have told us year after year after year how great unfettered free trade would be.

They were wrong. Their policies have led to enormous economic problems for the middle-class in this country. The decline of manufacturing is one of the reasons why our middle-class is shrinking and why wages for middle-class workers are in decline.

Many people understand the pain involved when we have lost 3 million jobs in the last few years. But we also have got to point out that our trade policies and our overall economic policies have been a disaster for the wages that American workers receive.

Today, American workers in the private sector are earning 8 percent less than they were in 1973. Now, just think for a moment. Think for a moment. In the last 30 years, there has been a revolution in technology. We all know that. We all know what computers have done, what e-mail has done, what faxes have done. We know what robotics in factories have done. In other words, we are a much more productive Nation than we used to be. Every worker is producing more.

Given that reality, why is it that the average worker in the private sector today is earning 8 percent less? That is an issue we have to put right up there on the radar screen, and we need to debate.

Mr. Speaker, manufacturing in this country is currently in a state of collapse. Let us be honest about it. In the last 3 years, we have lost 2.7 million manufacturing jobs, which comprise 16 percent of the total. That is right. You heard that right. In the last 3 years, we have lost 16 percent of our manufacturing jobs. At 14.7 million, we are at the lowest number of factory jobs since 1958.

In my own State of Vermont, my small State of Vermont, we have lost some 8,700 manufacturing jobs between January 2001 and August 2003, and the pity of that is that in Vermont, manufacturing jobs pay workers middle-class wages. In Vermont, on average, a worker working in manufacturing makes over $42,000 a year. That is a decent wage. We are losing those jobs, and the new jobs that we are creating are paying only a fraction of what manufacturing jobs are paying, and almost always provide much, much weaker benefits.

Mr. Speaker, in 2002 the United States had a $435 billion trade deficit, a $435 billion trade deficit. This year, the trade deficit with China alone, one country, China, is expected to be $120 billion, and that number is projected to increase in future years. It has gone up and up and up. The National Association of Manufacturers estimates that if present trends continue, our trade deficit with China will grow to $330 billion in 5 years.

But our disastrous trade policy is not only costing us millions of decent paying jobs; it is squeezing wages. It is squeezing wages. Because many employers are saying if you do not take the cuts in health care, if you do not take the cuts in wages, we are going to move to China, we are going to move to Mexico.

One of the areas where people are being most severely hurt is among young workers without a college education. For entry-level workers without a college level education, the real wages that they have received, that they are now receiving, have dropped by over 20 percent in the last 25 years. And the answer and the reason for that is quite obvious. 25 years ago, 30 years ago if somebody did not go to college, as most people did not, what they would be able to do is go out and get a job in manufacturing. And millions and millions of workers did that. And with those wages and those benefits they were able to lead a middle-class existence and raise their kids with a decent standard of living. But the reality now is that the new jobs that are being created, the jobs at McDonald's and the jobs in Wal-Mart are not paying people a living wage.

What is happening to our economy today is best illustrated by the fact that some 20 years ago our largest employer was General Motors. And workers in General Motors earned, and still earn today, a living wage. Today, Mr. Speaker, our largest private employer is Wal-Mart. And that is what has happened to the American economy. We have gone from a General Motors economy where workers earned decent wages and decent benefits to a Wal-Mart economy where people earn low wages and poor benefits. Today Wal-Mart employees earn $8.23 per hour or $13,861 annually. And that, Mr. Speaker, is an income which is below the poverty level.

And that is what the transformation of the American economy is about, an

economy where workers used to work, produced real products, made middle-class wages, had good benefits, to a Wal-Mart economy where our largest employer now pays workers poverty wages, minimal benefits, huge turn-over.

Frankly, Mr. Speaker, in hindsight it did not take a genius to predict that unfettered free trade with China would be a disaster, which is why I and many other Members in the House have opposed it from the beginning. With educated, hardworking Chinese workers available at 40 or 50 cents an hour, and with corporations having the capability of bringing their Chinese-made products back into this country tariff- free, why would American multinational corporations not shut down their plants in this country and move to China? It did not take a genius, frankly, to think that that would happen.

Should anyone be surprised that Motorola eliminated 42,900 American jobs in 2001 and invested $3.4 billion in China or that IBM has signed deals to train 100,000 software specialists in China over 3 years? Who is shocked that General Electric has thrown tens of thousands of American workers out on the streets while investing $1.5 billion in China. Honeywell is a sophisticated corporation. Should anybody be really surprised that they have built 13 factories in China or that Ethan Allen furniture has cut jobs at three sawmills and 17 U.S. manufacturing plants, including some in my State of Vermont, as they import more medium-priced furniture from China into the United States? Nobody should be surprised at these developments.

China, for American multinational corporations, is a great place to do business, if by ``doing business'' we mean making products for export to the United States that companies previously made here. Not only are wages extremely low in China, but if workers attempt to stand up for their rights in China and form unions, those workers go to jail. Now, what a great place to do business where when workers try to organize, they go to jail. What more could a company ask for?

In China today environmental regulations are almost nonexistent. And while China becomes one of the most polluted countries on Earth, companies that invest in China, they do not have to ``waste money on environmental safeguards.'' In our country we said many years ago to companies you just cannot willy-nilly throw your garbage into our lakes and into our streams. You cannot pollute the air any way you want. You have got to have some environmental safeguards. Those safeguards are expensive. But in China, no problem, you can do whatever you want. Great place to do business.

Mr. Speaker, over the years advocates of unfettered free trade have tried to gloss over the bad news about the decline in factory employment by promising that a new economy was in the making. A new economy was in the making, one in which Americans would be working at good wages in the high-tech field. We have all heard it. Hey, you do not have to worry about them factory jobs anymore. We are the United States of America. We all have new clean, high-tech computer jobs. All of our young people will go out there, make $50,000, $60,000, $70,000 a year. That is the future for the United States. That is what they told us.

Unfortunately, the advocates of unfettered free trade are wrong again. We now know that blue collar manufacturing jobs are not the only casualty of unfettered free trade. Estimates are that some 50 to 60,000 high-tech white collar jobs have been lost in this country in the last 2 years, and that many of them have ended up in India. If any of the listeners sometimes want to argue with the phone company that your phone bill was wrong, you get on the phone and you are calling up and arguing, well you may end up going not to Chicago or New York or Los Angeles, you may be talking to somebody in India. And that is happening more and more.

According to Forest Research, a major consultant on this issue, they say, and I quote, ``Over the next 15 years 3.3 million U.S. service industry jobs and $136 billion in wages will move offshore. The information technology industry will lead the initial overseas exodus.'' That is from Forest Research. According to Booz Allen Hamilton, companies can lower their costs by as much as 80 percent by shifting tasks such as computer programming, accounting, and procurement to China.

Among many other companies moving high-tech jobs abroad is Microsoft, which is spending $750 million over the next 3 years on research and development and outsourcing in China. Just the other day, just last week, Intel Corporation chairman Andy Grove warned that the U.S. could lose the bulk of its information technology jobs to overseas competitors in the next decade, largely to India and China.

In other words, Mr. Speaker, not only has unfettered free trade cost us our textile industry, cost us our shoe industry, our steel industry, our tool and die industry, our electronic industry, much of our furniture industry, as well as many, many other industries, it is now going to cost us, unless we change it, millions of high-tech jobs as well.

Now, let me be very clear. The United States needs to have a strong and positive relationship with China. I am not anti-Chinese. I am an internationalist. China is the largest country on Earth, and this country must have a good and positive relationship with China; and there are a number of ways that we can do that. But doing that, having a positive relationship with China, does not mean allowing corporate America and their supporters in the White House, in Congress, to destroy the American middle class by making jobs America's number 1 export.

We want our exports to be products manufactured by American workers, not the jobs that American workers have. If we continue to force American workers to, quote unquote, compete against desperate people from China and other developing countries, both in manufacturing and high tech, the United States will be the loser.

By definition a sensible and fair trade agreement works well for both parties, not just for one. Trade is a good thing. Trade is a good thing when both sides benefit. The New York Yankees do not engage in free trade by exchanging their top ball player for a third string minor leaguer.

The United States is the most lucrative market in the world. We need to leverage the value of that market to achieve trade agreements that result in fairness for the American worker. And we can do that. Trade is a good thing. But our current trade policies are not working for American workers.

When we talk about trade with China, Mr. Speaker, we should also understand that today 60 percent, 60 percent of Dell Computer parts are made in China. Boeing recently said that it expected to purchase $1 billion worth of aviation equipment annually in China by 2009 and $1.3 billion by 2010, up from $500 million this year.

North Carolina's Pillowcase Corporation filed for bankruptcy on July 20, 2003, laying off 6,450 of its 7,650 workers and made plans to sell its textile-producing machinery to several nations, including China. Over the past year, Intel has added 1,000 software engineers in China and India. And on and on it goes. The bottom line is that American workers cannot and must not be forced to compete against workers in China who are paid extremely low wages.

Two-thirds of China's 1.3 billion citizens live on less than a dollar a day. The average factory wage in China is 40 cents an hour, \1/40\th of what U.S. factory workers are paid. The average annual salary for an information technology programmer in the U.S. is $75,000; in China it is $8,952.

Mr. Speaker, for all of these reasons and more, I have introduced H.R. 3228, which would repeal permanent normal trade relations with China. My legislation, once again, would repeal permanent normal trade relations with China. It will acknowledge that our current trade policies with that country are a failure. And we have got to begin negotiating trade policies not only with China but with other countries that work well for the American worker and the American middle class.

I am happy to say that in just over 3 weeks, this tripartisan legislation has garnered 52 cosponsors, including 14 Republicans. So we are moving forward in that area, Mr. Speaker, in a tripartisan way.

Mr. Speaker, when we talk about the decline of the middle class, we are talking about high unemployment; we are talking about the conversion of the United States from a manufacturing

economy to a service economy whereby wages and benefits are much lower.

We are also talking about the fact that in the United States, workers today are now working the longest hours of the workers in any major country on earth. There should be little wonder why the average American family is so stressed out. And one of the reasons that they are so stressed out is that people are working incredibly long hours in order to make enough money to pay the bills. Today, the average American employee works by far the longest hours of any worker in the industrialized world, and the situation is getting worse.

According to statistics from the International Labor Organization, the average American last year worked 1,978 hours, up from 1,942 hours in 1990. That is an increase of almost one week of work. Since 1990, the average American is now working an additional week a year of work. We are now, as Americans, putting more hours into our work than at any time since the 1920s. Just think about that. Huge increases in productivity and an explosion of technology, logically, would lead one to believe that people would be working fewer hours for higher wages, but the converse is true. People are working longer hours for lower wages.

Americans are now putting in more hours at our work than at any time since the 1920s, 65 years after the formal establishment of the 40-hour workweek under the Fair Labor Standards Act, almost 40 percent of Americans now work more than 50 hours a week; and we should do a lot of thinking about that. An explosion of productivity and technology, people working longer and longer hours; and in almost every instance in the middle class, two bread winners are needed to pay the bills. Real wages for workers in the private sector have declined since 1973. The rich get richer. The middle class shrinks and poverty increases.

Mr. Speaker, I have talked a moment about what is going on with the middle class. I have talked a little bit about the conversion from a manufacturing society, a General Motors society, to a service industry economy, a Wal-Mart economy, but let us look for a moment at the people who are not even in the middle class. People who have not made it into the middle class. People who are at the lower end of the socioeconomic ladder in our country, the 34.8 million people in America who live in poverty. Sadly, Mr. Speaker, while the rich get richer, 1.3 million more Americans became poor and entered poverty, the group of poor people in America.

In the midst of those people, Mr. Speaker, we have got to ask about the 11 million Americans who are trying to survive on the pathetic minimum wage of $5.15 an hour which exists here, and I think it is morally repugnant that this Congress voted to provide huge tax breaks for millionaires and billionaires, but somehow the President of the United States and the Republican leadership, not for one moment have thought about raising the minimum wage, which today is at a pathetic $5.15 cents an hour.

How do people earning those wages survive? And I will tell you how some of them do it. After working 40 hours a week, they live in their automobiles because they cannot afford housing units in order to survive. They just cannot afford the housing because their wages cannot pay the rent. And what, Mr. Speaker, about the 43.6 million Americans who lack any health insurance? That is 15.2 percent of our population. What about the 3.5 million people who will experience homelessness in this year, 1.3 million of them children? What about our elderly citizens who cannot afford the outrageously high cost of prescription drugs? And the many of them who cut their pills in half or do not even bother trying to fill the prescriptions that their doctors write for them? What about those people? What about the veterans who have put their lives on the line defending this country and then try to get into a VA hospital but find out that they are on a waiting list?

Mr. Speaker, one of the clear crises being faced by the American middle class is the crisis in health care and the cost of prescription drugs. In the last several years, we have seen huge increases in health insurance and with the increase of unemployment, we have seen more and more working people lose their health insurance. In terms of losing health insurance, people then are open to bankruptcy, because if they end up with an accident or a serious illness, they go to the hospital, but they are unable to pay those bills. And the highest amount of people who are bankrupt are the people who cannot pay their health expenses that have been generated as a result of an accident or illness.

Mr. Speaker, our health care system today is in a state of collapse. More and more people are uninsured and more and more people are underinsured. That is, people have higher and higher copayments, higher and higher deductibles, higher and higher premiums. To my mind, the only solution, the only serious solution to our health care crisis is for this country to do what every other major industrialized nation on Earth has done and that is to move toward a national health care system which guarantees health care to every man, woman and child.

A hundred years ago, the United States of America said that every young person, regardless of income, could get a quality public education. Well, the rest of the world has said that every person in their country, regardless of income, is entitled to health care. But we lag behind what countries throughout Europe, Scandinavia and Canada are doing. To my mind, health care is a right, not a privilege. It is wrong that more and more Americans delay and hesitate going to the doctors because they do not have health insurance or because they cannot pay the deductible or the copayments.

When people in America get sick, they have a right to go to the doctor, to go to the hospital and get the health care that they need. The irony with regard to our collapsing health care system is that it is an extremely costly and wasteful system. The fact of the matter is that we spend more than twice as much per capita on health care as any other nation, and yet we end up with 43 million people with no insurance and many more who are underinsured. For the sake of our children, for the sake of our parents, for the sake of the middle class of this country, we have got to adopt a national health care system which finally says with no ifs, ands, or buts about it that in America, all of our people will receive the care that they need as a right of citizenship.

Now, Mr. Speaker, given the very, very serious problems facing the American people and especially our middle class, it is appropriate, I believe, to ask what President Bush and his administration have done to begin addressing some of these problems. What are their priorities? What are they doing to reach out to the middle class and say we are going to expand the middle class; we are going to lower poverty; we are going to improve health care? What are they doing in that direction?

Well, let me tell you a little bit about what they have done. They have given hundreds of billions of dollars in tax breaks to the very richest people in our country while cutting back on the basic needs of working families. Now, at a time when the middle class is shrinking, when poverty is increasing, when the number of people without health insurance is going up, when unemployment is far too high, who are the people that the Bush administration are reaching out to? Well, needless to say, it is their campaign contributors and the very wealthiest people in this country who have received hundreds and hundreds of billions of dollars in tax breaks.

Through legislative and administration efforts, the Bush administration is making it more and more difficult for workers to form unions and to protect their jobs and incomes. When a worker is a member of a union, by and large that worker will earn 30 percent more than a worker doing a similar job who is nonunion. That is why many workers want to join unions, and yet it is getting harder and harder for workers to do that because the law very clearly sides with the employer and the large corporation and not with the worker.

The Bush administration, if you can believe it, is now attacking overtime for American workers and trying to undo laws that have been on the books for decades which say that if you

worked over 40 hours a week, you will get time and a half. And I am proud that a number of Republicans join many of us on this floor of the House to say that when the middle class is shrinking, when real wages are declining, we are not going to cut back on the overtime pay that workers need.

Now, when we talk about the achievements of the Bush administration, and we understand that our deficit is now at an all-time high, that our national debt is going higher, that in the midst of all of this, our conservative friends who year after year told us how terrible deficits were and what kind of terrible obligations we were leaving to our kids and our grandchildren, well, these are the folks that are driving up the deficit, and they are driving up the national debt. Now, why are they doing that? Why are conservatives doing that?

Well, I think there are two reasons. Number one, obviously, the tax breaks for the rich are not hard to understand. Here in Washington, D.C. there are fund-raising dinners in which individuals have contributed $25,000 a plate, large corporations and their executives make huge contributions and that is payback time. Nothing new. The rich make contributions. They get paid back in tax breaks. They get paid back in corporate welfare. They get paid back with their trade policy which makes it easier for them to throw American workers out on the street and move out to China. That we can understand. That is obscene, but easily understood.

But, Mr. Speaker, let me suggest to you that there is another even more cynical reason for driving up this deficit and driving up the national debt. And I believe that that reason is that as the debt and the deficit become higher and higher, this President, or any other President, may be forced to come before the American people and say our deficit and our debt is so very high that we have no choice but to privatize Social Security, privatize Medicare, privatize Medicaid, privatize public education.

We have got to do it. We have a huge deficit. Oh, yeah, we did give hundreds of billions of dollars in tax breaks to the rich; but nonetheless, the deficit is so high that we are going to have to do away with all of the benefits, all of the guarantees that the American people have fought for over the last 100 years; and it is my belief that this administration really does want to take us back to the 19th century, where working people and the middle class had no protections whatsoever, where workers and poor people were dependent upon the largess of the wealthy for charity, but there were no guarantees.

Social Security has its problems; and in my view, Social Security must be strengthened. Seniors must be receiving larger COLAs, but the solution to the problems that we may have are not to privatize Social Security and bring us back to the 1920s when elderly people were the poorest segment of our society; but that is the direction that these folks are moving us towards, and they are moving us toward the privatization of Medicare.

Think about how many private insurance companies are really going to provide insurance for elderly, low-income sick people. The function of an insurance company is to make money, not to provide health care; and if a person is old and sick and poor, who is going to insure them? They are on their own.

In terms of prescription drugs, an issue that I have worked very hard on for a number of years, the Bush administration is working hand-in- glove with the pharmaceutical industry, the most powerful lobby here on Capitol Hill. While Americans pay by far the highest prices in the world for their prescription drugs, the pharmaceutical industry year after year after year is the most profitable industry in this country.

In order to maintain their status as the most profitable industry, they have hired over 600, 600 paid lobbyists right here in Washington, D.C., to descend on the Congress, on the House and the Senate, to make sure that we do not pass any legislation which will lower the cost of prescription drugs. Nonetheless, despite all of the hundreds of millions of dollars that they have spent on all of their lobbying efforts, all of their campaign contributions, I am happy to tell my colleagues, Mr. Speaker, that 6 weeks ago, longer than that, the House of Representatives, in a bipartisan way, had the courage to stand up to the pharmaceutical industry and pass legislation that would allow our pharmacists, prescription drug distributors, and individuals to buy FDA-approved medicine in 26 countries including Canada; and if we can get that bill through the Senate, we will be able to lower prescription drug costs in this country by between 30 to 50 percent. Unfortunately, on this issue, we are fighting not only the pharmaceutical industry but the Bush administration and the Bush campaign, which has received substantial support from the drug companies.

Mr. Speaker, on another area that is of enormous importance to the American people and more and more Americans are getting involved in it, the Bush administration is moving in precisely the wrong direction in terms of media consolidation. In my view, one of the crises that we face in our country today is fewer and fewer large media conglomerates own and control what we see, what we hear, and what we read. I know the average person says, well, man, I have got 100 channels on my cable. Check out who owns those 100 channels. Check out who owns NBC, which is General Electric; who owns CBS, which is Viacomm; who owns ABC, which is Disney; who owns Fox Television, which is Rupert Murdoch, an extreme right-wing billionaire. What we are seeing in terms of media is fewer and fewer large corporations controlling the flow of information in America. Clear Channel Radio now owns 1,200 radio stations all over this country.

In America, what our freedom is about is debating different points of view. No one has all the right answers, but we cannot flourish as a democracy unless we hear different points of view; and that is becoming harder and harder to achieve, as fewer and fewer companies own what we see, hear, and read.

Instead of acknowledging that problem and moving us to a more diversified media, where we will have local media reporting on local issues, where it will be different points of view being heard, where there will be more diversity in our media, the Bush administration is moving in exactly the wrong direction.

Michael Powell, who is chairman of the FCC, with the strong backing of the Bush administration, passed with a three to two vote on June 2 more media deregulation, which will allow for even fewer companies to own what we see, hear, and read; and one of the manifestations of that decision, if it is allowed to stand, is there will be cities in America where one company will own the local newspaper, will own the largest television station, will own many of the radio stations, and will own the local cable TV system.

Mr. Speaker, that is not what America is supposed to be; and I am happy to tell my colleagues that all over this country, in a grassroots fashion, millions of Americans have written and communicated to the FCC, some of them conservatives, the National Rifle Association, some right-wing organizations, some of them progressives, some left-wing organizations, some in the middle, different points of view philosophically on almost every issue, but they have come together to say that in America we need to have a diverse ownership of media and different points of view to be heard.

The Senate, listening to the demands of the American people, had the courage in a bipartisan way, Senator Byron Dorgan, Senator Trent Lott helping to lead the effort, had the courage to pass a resolution of disapproval with regard to what the FCC did. In other words, they said we want to junk it. That bill is now here in the House of Representatives; and working with some of my colleagues again in a tripartisan way, we have now garnered 190 signatures on a letter to the Speaker of the House, because the bill is now on the Speaker's desk, and we have said, Mr. Speaker, let the American people have the debate and a vote about whether or not we want more media consolidation. I sincerely hope that the Speaker will allow that debate because if that debate takes place, I believe that the American people will win and that Republicans, Democrats, and Independent on the floor of this House will vote to junk what the FCC has done.

Mr. Speaker, when we talk about America, we often pride ourselves upon being a free country, a free country; and it is easier to stand in front of the American flag and give great speeches about freedom than it is to really fight for freedom, because one of the elements of freedom is to understand, among other things, that not everything, not everything that somebody says or does is something that we agree with, but what freedom is about is tolerating and respecting other points of view, of understanding that people have the right to read whatever they want to read, have the right to an attorney when they need an attorney.

I was one of the relatively few people in the House who voted 6 weeks after the horror of 9/11 against the USA PATRIOT Act, and I voted against the USA PATRIOT Act not because I am not concerned about terrorism. I happen to believe that terrorism is a very serious issue and that the United States Government must do everything that it can to protect the American people and fight terrorism, but I voted against the USA PATRIOT Act because I believe we can fight terrorism without undermining basic constitutional rights, which is what the USA PATRIOT Act is doing.

Again, on this issue, we have seen some very interesting nonideological coming-together. We have seen some really very conservative people who are honest conservatives who say because they do not believe in Big Government they do not want the United States Government monitoring the reading habits of the American people in their libraries or their bookstores. Unfortunately, again, on this issue, the Bush administration and Attorney General John Ashcroft are on the wrong side. They are, in many respects, working to undermine the basic constitutional rights that are given, that have made this country a free country.

So, Mr. Speaker, let me conclude by stating that it is high time that the Congress of the United States begin to focus on the needs of the middle class, the vast majority of our people, the middle class of which is shrinking, the middle class in which the average person is working longer hours and for lower wages. America will grow when the middle class grows; and to do that, we need some fundamental changes in our policies.

We need a national health care system which guarantees health care to all Americans. We need to raise the minimum wage to a living wage. We need to fundamentally change our trade policies so that we do not continue to see the collapse of manufacturing. We need to make sure that every American, regardless of income, has a right to go to college. We need to rescind the tax breaks that have been given to the wealthiest people and the largest corporations and create a tax structure which works for the middle class and not just for the wealthy and the powerful.

There is a lot of work that must be done, and I look forward to participating in that effort.

Mr. Speaker, our manufacturing base is slowly evaporating before our very eyes. Just last week, Rockford, Illinois-- the main city I represent--lost 3 facilities. Over 1,200 workers in a town of 150,000 lost their job last week. Over 2.8 million manufacturing jobs have been lost since July 2000. Manufacturing now just makes up 14 percent of our

Gross Domestic Product. Yet, few people in Washington, D.C. are truly aware of this problem because this town doesn't produce much except paper.

There are many causes to the problems facing manufacturing: high health care and energy costs; legal liabilities; a staggering tax and regulatory burden; an outdated export control system; a government procurement system that thinks that it is OK to buy abroad; and an unfair global trading system.

I am proud to stand with Representative Phil English today in trying to bring about some relief in the trade area. The United States faces huge challenges with China. We all recognize and appreciate the difficulties the Chinese face as they integrate into the world economy. China is to be commended for going down a path towards more free markets and away from a planned economy. They have over 1.2 billion people and tens of millions of people enter their workforce each year. China must grow about eight percent a year just to keep even as they try to integrate new workers into the economy and also provide real employment for former workers at failed state-owned enterprises.

However, while acknowledging these challenges, we also must not allow the nations of the world to expect the United States to be the only global economic growth engine. It is in China's long-term best interest to address the real problems contained in this resolution. It is time for China to promote economic growth within their country mainly by selling the products made in their nation to their own people--not using the United States as a pressure relief valve.

Plus, China should take a cue from one of our great industrialists-- Henry Ford--and pay their workers sufficient wages so that they can afford the products they are making for U.S. consumers.

Yes, China has honored many of its WTO commitments. But it has also not lived up to all of its commitments to the WTO. We have given China the benefit of the doubt for too long. While we are grateful for China's willingness to buy more U.S. products, this is not enough. Now is the time to ratchet up the pressures and if necessary bring a trade case through the WTO process to force full compliance of China's commitments. Our manufacturers have taken it on the chin for too long now.

For example, having very low taxes imposed on Chinese semi-conductor manufactures but taxing imported semi-conductors at a much higher rate is outrageous. We're struggling to replace our Foreign Sales Corporation/Extraterritorial Income tax regime due to a WTO challenge from Europe; however, this Chinese tax discrimination policy hasn't been challenged in the WTO system yet. Does that make any sense? The National Association of Manufacturers has many more examples, which I ask unanimous consent to include in the Record.

I'm also grateful to Representative English for including a good deal of the language in H. Res. 414 dealing with Chinese currency manipulation from the legislation I authored along with my good friends and colleagues Representatives Mike Rogers, of Michigan, Charlie Stenholm of Texas, and Baron Hill of Indiana. I am especially pleased that the House of Representatives will go on record today in opposition to these policies that place up to a 40 percent tax on U.S. exports to China and up to a 40 percent discount on Chinese imports into the United States. Is it any wonder why our manufacturers are crying out for relief? This resolution is a good first step towards final action on H. Con. Res. 285, which, if diplomacy fails, calls for initiating a Section 301 trade case to impose trade sanctions against nations that manipulate their currencies for a trade advantage.

Let me also remind my colleagues that China is not the only nation that deliberately undervalues its currency. Japan, Korea, and Taiwan also vigorously intervene in currency markets to prevent their currency from strengthening against the U.S. dollar. Passage of this resolution today should not undermine our resolve to combat the problem of unfair foreign currency manipulation of other nations.

Prior to his departure for the Asia Pacific Economic Council conference, President Bush said we must make sure that ``currency policies of a government don't disadvantage America. Fair trade means currency policies [are] fair.'' We should strongly support passage of H. Res. 414 today. But we should also work towards ensuring passage of H. Con. Res. 285 if timely progress is not made towards accomplishing the goals set out in this resolution and if countries including Japan, Korea, and Taiwan do not halt the practice of undermining the value of their currency to boost their export potential.

Again, Mr. Speaker, I urge my colleagues to support H. Res. 414.

National Association

of Manufacturers,

September 10, 2003. Review of China's Compliance With Its WTO Accession Commitments

Areas of Concern

Currency undervaluation;

Subsidized exports;

Counterfeiting and IPR violations;

Discriminatory VAT taxes;

Unjustified product labeling requirements;

Inappropriate standards and concerns about CCC mark

procedures;

Restrictions on trading rights;

Lack of action on auto financing regulations;

Problems with Tariff Rate Quotas; and

Slow progress on transparency.

Overview

The National Association of Manufacturers (NAM) welcomes

the opportunity to comment on China's compliance with

obligations accepted as a WTO member and commitments made in

conjunction with accession to open its internal market to

foreign products and services. The NAM supported China's

membership on the condition that it would take meaningful

steps to adhere to these obligations and commitments and

become a responsible participant in the international trading

system.

Trade with China is of immense importance to many U.S.

manufacturers. The Chinese market is set to become one of the

largest in the world within the next several years. Chinese

imports are expected to exceed $380 billion in 2003, making

China the world's third largest importer after the United

States and Germany. At the same time, China is rapidly

becoming a major exporter of industrial goods, and the range

of industrial products exported has continued to grow at a

rapid pace. China's expanded participation in the global

marketplace, then, offers both important new commercial

opportunities as well as challenges resulting from increased

competition in the U.S. and foreign markets.

NAM members want the United States to have a positive trade

relationship with China. However, they also want a level

playing field for competition. In that regard, we are hearing

increasing concerns about unfair Chinese trade and currency

practices and China's failure to provide the same kind of

access to U.S. goods and services in the Chinese market that

Chinese goods and services enjoy in the U.S. market.

As China concludes its second year as a WTO member, its

compliance record is decidedly mixed. While U.S. exports to

China continue to increase (by 24 percent in the Jan.-June

2003) and a growing number of U.S. companies are trading and

investing there, the NAM has also received far more

complaints about unfair Chinese practices than in the

previous year.

NAM members recognize that China is still in transition to

a market economy and in the process of phasing in certain WTO

market-opening commitments. However, because China has

quickly becomes such an important global importer and

exporter, it is vital that the United States work to ensure

that China complies as fully as possible with all WTO

obligations and particularly those that have a significant

impact on U.S. economic interests.

NAM member companies and affiliated organizations have

reported the following concerns regarding China's WTO

compliance.

currency manipulation

By far, the NAM has received the greater number of

complaints about China's deliberate policy of undervaluing

its currency to gain unfair competitive advantage over U.S.

producers and those of other WTO member countries. Economists

have estimated that China's currency could be undervalued by

40 percent or more. The Chinese yuan has remained pegged to

the dollar at 8.28 for the past eight years despite an

extended period of robust economic growth, continuing trade

surpluses and a large build-up in foreign exchange reserves,

which exceeded $350 billion in July 2003.

Chinese officials have acknowledged that the pegging of the

yuan to the dollar is part of a deliberate strategy to

support Chinese industry and boost exports. This kind of

currency undervaluation for commercial gain goes against the

intent of the General Agreement on Tariffs and Trade (GATT),

which seeks to remove trade barriers and allow markets to

determine trade flows. Article IV, for examples, states that

``Contracting Parties shall not, by exchange action,

frustrate the intent of the provisions of this Agreement . .

.'' China's undervalued currency, in effect, acts as an

additional trade barrier to U.S. exports and an unfair

subsidy for all Chinese exports. We believe that Chinese

exchange rate policies do not comply with WTO obligations.

subsidized exports

We continue to receive reports from different industries

(e.g., tool-and-die, metal forming, steel and chlorinated

isocyanurates) that Chinese products are being sold in the

United States at prices so low that they could not even cover

the cost of raw materials and shipping much less full

production and marketing costs. A tool-and-dye company, for

example, reports that a Chinese competitor was selling a

product similar to one made in the United States for $40,000,

compared to the U.S. producer's price of $100,000. The U.S.

company maintains that the cost of the raw materials alone

would amount to $40,000, not including shipping, duties and

other costs. A U.S. producer of chlorinated isocyanuratrs,

which is used as a cleaning agent in swimming pools,

reports a similar situation. As a result of pricing which

appears to be below cost, Chinese exporters are expected

to increase exports of

this product by 400 percent in 2003 over 2002 levels.

These reports suggest the likelihood of widespread use of

subsidies, either direct or indirect, to help Chinese

exporters gain unfair competitive advantage in the U.S.

market. They merit further investigation by USTR and the

Department of Commerce. One source of indirect subsidy is

continued bank leading to money-losing and insolvent Chinese

manufacturers, often state-owned or state-controlled

enterprises. Since the Chinese banks providing these loans

are either state-owned or state-controlled, the Chinese

government bears responsibility for their lending practices.

U.S. steel producers note that the Chinese steel industry is

the largest-recipient of interest-rate subsidies authorized

by the national government. Since many of the companies that

benefit from either directed bank lending or subsidized

interest rates are engaged in international trade, they have

an unfair competitive advantage vis-a-vis U.S. based

companies, which must rely on private financing at market

rates.

counterfeiting and ineffective enforcement of ipr protection

While Chinese laws on intellectual property rights (IPR)

have improved considerably, the lack of effective enforcement

of the IPR protection remains a serious problem. Violations

of trademarks through product counterfeiting is rampant and

on a massive scale. The violations involve a wide range of

products, including consumer hygiene and health care

products, athletic footwear, pharmaceuticals, food and

beverages, motorized vehicles and even entire automobiles.

Pharmaceutical counterfeiting is now, according to U.S.

industry representatives, a serious public health concern in

China. We believe that the lack of criminal penalties for

counterfeiting, including jailing, prevents effective

enforcement of trademark and labeling violations.

We are also concerned about reports that local government

authorities are actually promoting the expansion of local

industry dedicated principally to counterfeiting. At a

minimum, local authorities are knowledgeable of counterfeit

production and taking no action to halt it. There appears to

be no mechanism for the national government to prevent local

governments from aiding and abetting counterfeiting by local

industry. In addition, the Chinese customs service has not

cooperated in blocking exports of counterfeit products even

when solid evidence of counterfeiting was provided. It is

claimed that, since the ``exporting'' of counterfeit products

does not constitute a ``sale'' of the products, the relevant

Chinese law did not apply.

Other IPR violations are also common. They include

unauthorized duplication of computer software, music films;

copying of designs; unauthorized use of patented technology;

and unauthorized use of U.S. product certification logos. The

makers of air conditioning and refrigeration equipment note

that the ARI (Air-Conditioning and Refrigeration Institute)

certification symbol was being used without authorization by

a Chines company. Efforts to have the Chinese government stop

this unauthorized use proved ineffective.

The pharmaceutical industry does, however, also report

improvements in intellectual property protection, notably by

the promulgation of a new regulation on data exclusivity for

clinical trials, as required in TRIPS and committed in

China's accession package.

Manipulation of VAT and Other Taxes

We have reports that China is manipulating the application

of taxes, notably the Value-Added Tax (VAT), to both restrict

imports and indirectly subsidize exports. For example, the

scrap recycling industry has told us that Chinese users of

imported copper and other scrap metals are deliberating

undervaluing their invoices to pay less VAT on the imported

metal. When the finished metal products are exported,

however, Chinese producers claim a rebate of the VAT based on

the metals' real import price. This results in a substantial

subsidy for the exported product that translates into lower

prices in the U.S. market. It also enables Chinese scrap

metal users to pay higher prices for scrap metal than their

U.S. competitors. Chinese customs and tax authorities have

not taken action to investigate these practices.

A major U.S. producer of semiconductors has also expressed

concern about continuing Chinese discrimination in the

application of the VAT on imported and domestically produced

semiconductors. China levies a 17 percent VAT on imported

integrated circuits. Domestically designed and produced

integrated circuits are taxed at VAT rates ranging from 3-6

percent. Integrated circuits produced in China but designed

abroad are taxed at 11 percent. This discriminatory treatment

of domestic and foreign ``like'' products violates Article 3

of the GATT.

Unjustified Labeling Requirements

In 2002 the Chinese Ministry of Health promulgated a new

regulation mandating the labeling of all genetically modified

(GM) food products. While the implementation of the

regulation was subsequently suspended indefinitely, the fact

that it remains on the books is already having significant

adverse economic effects and creating barriers to trade. Some

producers have ceased shipping these products in anticipation

of the regulation going into effect.

U.S. food producers have questioned whether the Health

Ministry's action was in conformity with China's WTO

obligations. The ministry did not provide a justification for

the labeling requirement based on an assessment of health

risks, which is a requirement of the Agreement on Sanitary

and Phytosanitary Measures. The Technical Barriers to Trade

Agreement (TBT) also suggests inadequate attention to the

treatment of ``like products,'' the question of whether the

labeling requirement addresses a ``legitimate objective'' and

the requirement to base technical regulations on

``performance'' rather than ``design'' characteristics.

Inappropriate standards and concerns about CCC mark system

Several NAM members have raised concerns about application

of technical standards and the CCC Mark system. With regard

to standards, China is requiring that certain products (e.g.,

electrical products) be manufactured only to ``international

standards'' as determined in the ISO or IEC. Other

``international standards,'' notably those developed in the

United States and widely used in the global marketplace, are

not allowed. This does not conform with the WTO TBT Committee

interpretation that ``international standards'' need not be

limited to ISO or IEC standards.

A second set of standards concerns relates to the CCC mark

system. China introduced the CCC mark system to comply with

WTO requirements for a single mark for like domestic and

imported products. It is, in that sense, a step forward on

standards and mark requirements. However, the inconsistent,

non-transparent and inflexible application of the CCC Mark on

a variety of products (e.g., electrical products, air

conditioning and refigeration equipment, and tires) has

created market access barriers and needlessly raised the cost

of importing products into China.

Generic problems include: the high cost of having Chinese

inspectors audit factories in the United States and other

foreign countries on compliance with the standards; continued

delays in allowing U.S. testing and certifying bodies to

certify compliance for the CCC mark; and lengthy delays and

relatively high cost of obtaining testing and certification

for the CCC mark in China.

Several other specific problems were noted. A major tire

company reported that several types of its bus tires that are

standard sizes in countries around the world cannot obtain

the required CCC mark because these sizes are not listed in

the Chinese National Standards. Another type of tire widely

on Chinese trucks is also not on the list and thus cannot be

sold by the U.S. company in China. Efforts to resolve this

problem with Chinese standards authorities and Chinese

customs have thus far been unsuccessful. In addition, the

company reports that local inspection offices appear to be

abusing their authority by requiring the re-inspection of the

company's Chinese-produced tires and confiscating tires which

they determine to be ``non-complaint'' with the CCC mark

standards.

Restrictions on Trade Rights of Joint Ventures

China is not fulfilling its commitment to allow foreign

joint ventures to import and sell products (e.g., tires,

automobiles, auto parts and industrial equipment) in China,

which was to have gone into effect on Dec. 10, 2002. A major

tire company, for example, reports that the Chinese

government has imposed additional restrictions on its trading

rights that were not anticipated when this concession was

negotiated. They include allowing only new joint ventures to

have this right and requiring the Chinese and foreign

partners to have separately done U.S. $30 million in trade

with China over each of the three preceding years.

lack of action on auto financing regulations

The Chinese government has committed to publish new

regulations governing the financing of automobile purchases.

Several NAM member companies have expressed concern about

slow progress on the regulations that were explicitly

promised in China's accession agreement. The U.S. government

should press for their prompt issuance to comply with WTO

obligations.

problems with tariff rate quotas and import certificates

Complications in implementing tariff rate quotas (TRQs) are

creating non-tariff trade barriers to U.S. feed products,

notably corn and wheat. Chinese authorities have delayed

issuance of regulations on the administration of the TRQ

system and introduced unreasonable licensing procedures.

There has also been a lack of transparency in the process

which makes it difficult to know which companies are granted

quotas. China has also violated its accession agreement by

redirecting quotas reserved for non-state companies to state-

owned companies.

A related problem that has affected soybean exporters is

the narrow window for using import permits under the AQSIQ

permit system. U.S. exporters have only 90 days to purchase,

transport and unload their products in China. These

restrictions are not only limiting U.S. commodity exports

sales but also restricting the operation of soybean

processing plants in China.

lack of transparency in trade regulatory process

Many companies complain about the lack of transparency in

the trade regulatory process and the difficulty in obtaining

current laws and regulations governing trade and

business operations. This is a continuing problem that should

lend itself to solutions in a relatively short time frame.

The U.S. government should press for concrete steps that

improve transparency at all levels.

William Primosch,

Director, International Business Policy,

National Association of Manufacturers.

Mr. Speaker, I move to suspend the rules and agree to the resolution (H. Res. 414) to encourage the People's Republic of China to fulfill its commitments under international trade agreements, support the United States manufacturing sector, and establish monetary and financial market reforms.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, currently before the House is House Resolution 414, to urge China to live up to its international obligations which it has agreed to undertake upon joining the World Trade Organization in 2001. We consider this with a sense of urgency as we are running an historically large trade deficit and an enormous bilateral trade deficit with China.

Mr. Speaker, our trade deficit with China has doubled since 1998, and is likely to exceed $120 billion this year. It has become the single largest bilateral trade deficit in the world. And the most conspicuous feature of our lopsided trade partnership with China is China's state- sponsored mercantilism which has cost this country millions of manufacturing jobs.

When the Clinton administration embraced China's entry into the WTO, many of us hoped that China would adopt the disciplines of the global rules-based trading system. Unfortunately, we have been sorely disappointed. China continues to flout global trade rules at the expense of our manufacturers and workers. This cannot be allowed to stand. Americans can compete with any economic power in the world, provided there is a level playing field.

Mr. Speaker, our resolution would: One, show broad support for the administration's efforts to get China to abide by its international trade obligations; two, put Congress on record urging China to follow global trade rules; three, commit to working with the administration to encourage China to modernize its financial system and allow a flexible exchange rate; four, urge the administration to continue intensive discussions with Chinese leaders towards establishing a market-based valuation of their currency; and, five, state that the United States Government should intensify efforts to promote innovation, reduce costs, and level the playing field for the manufacturing sector.

Mr. Speaker, here are the facts, the IMF, APEC, and the group of seven finance ministers all have stressed the importance of allowing for greater flexibility in exchange rates. In the last month, every top official in the administration's economic and trade team, including President Bush himself, has visited China and implored its leaders to bring its trading practices up to global standards and allow their currency value to be dictated by the market.

Still, China's leaders have continued to stall. Our message today is the same as the administration's. They have told China time and time again if they want to have a healthy trade relationship with the United States, then they must be prepared to follow the rules. The message we are carrying today is among the most important that Congress will communicate this year. It is essential for the economic future of the next generation, for the future of good paying jobs in places like my home in northwestern Pennsylvania where we make things for a living, that we get this right.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself 15 seconds.

First, to respond to the gentleman, I point out that this administration has been willing to take on China on these issues, particularly on the currency manipulation, in a way that the last administration certainly did not. At a time like this, when the administration is directly involved with negotiations with the Chinese, this is precisely the kind of resolution that is not only appropriate, but is important to provide to show support.

Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from North Carolina (Mr. Ballenger) who has been a leader in the fight on Chinese trade issues.

Mr. Speaker, I yield 1\1/4\ minutes to the gentleman from Georgia (Mr. Gingrey), a distinguished advocate of the interest of American workers.

(Mr. GINGREY asked and was given permission to revise and extend his remarks.)

Mr. Speaker, it is a privilege for me to yield 2 minutes to the gentleman from Michigan (Mr. Rogers).

Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from North Carolina (Mr. Hayes), a distinguished advocate of fair trade.

Mr. Speaker, I yield 3 minutes to the gentleman from California (Mr. Dreier), the chairman of the Committee on Rules and one of the most distinguished advocates of free trade in the Chamber.

Mr. Speaker, it is a great privilege for me to yield 2 minutes to the gentleman from Wisconsin

(Mr. Ryan), a distinguished member of the Committee on Ways and Means.

Mr. Speaker, I yield 2 minutes to the gentleman from Wisconsin (Mr. Green), a very distinguished advocate of American workers.

(Mr. GREEN of Wisconsin asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I have no further speakers beyond reserving the right to close.

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, this has been an edifying debate. I particularly want to salute my colleague, the gentleman from Michigan on the other side of the aisle, who has been attentive to the issue of China trade for a long time and has been an example to many of us, including many of us on my side of the aisle.

I must say, though, I think the record needs to be made clear and this resolution needs to be put in context. It is more than a weak exhortation; it is an expression of support for the administration's efforts at a very critical time to challenge China and encourage them to float their currency and liberalize their trading regime. We sent Secretaries over to China to do more than give speeches. They have delivered a very powerful message, and it appears that the Chinese are beginning to listen. But I agree with the people on the other side: more needs to be done.

Our message today, Mr. Speaker, is that Congress will not stand on the sidelines while our industrial base is eroded and manufacturing jobs are lost forever.

Some adopt the rhetorical convention that criticism of China's trade policies amounts to protectionism. But Adam Smith himself would not have recognized China as a free market bulwark. The term that he would have used to describe China's economic policies is mercantilistic, and mercantilism has no place in today's global marketplace which is guided by a rules-based system where ``beggar thy neighbor'' is not part of the equation.

The goal of this resolution today is to encourage the leveling of the playing field in our trade relationship and create fair opportunities for both our employers and our employees.

This is a resolution that should ultimately unite Members with diverse districts and diverse philosophical backgrounds. It has drawn support from the National Association of Manufacturers, the U.S. Chamber of Commerce, the United Steelworkers of America, and the American Iron and Steel Institute.

Mr. Speaker, this is precisely why I strongly encourage all of my colleagues to send a message to the administration, send a message to China, and send a message to the world that we are watching and we are proceeding from here, starting with this resolution, proceeding with hearings in the Committee on Ways and Means later this week, and proceeding from here with a much stronger trade policy that is determined to fight for our industrial base.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.