Floor Statements

Madam Speaker, I am here to talk about a very serious economic and, therefore, social problem facing the country. We talk about the unemployment statistics, we talk about the ebb and flow in the job market, and the particulars are important. But by now we have enough evidence over the past several years so that we should be focusing not on month-by-month figures, but on what appears to be a very significant change in the nature of our economy. Indeed, I think we may be at a major inflection point.

I hope I am too pessimistic. I hope tomorrow there are going to be figures that show much greater growth in employment than we have seen. But even a good one month is not going to undo the problem we are facing.

Here is the problem: we have had a recovery from a recession over the past couple of years. In 2003 in particular, in the third quarter we had very significant growth, aided by a series of government programs and the natural cyclical rebound from a period of slowdown, and we had growth in the fourth quarter. What we have not seen is the growth in employment that ordinarily accompanies this degree of economic recovery.

In short, it appears from a variety of indicia that we are at a point where the ability of the private sector in this country to create wealth is now outstripping its ability to create jobs. The normal rule of thumb by which a certain increase in the gross domestic product would produce a concomitant increase in jobs, it does not appear to apply.

By the way, among those who were misled by the assumption that the normal rules would apply are the leading economic officials of the Bush administration. For example, in October of last year, Secretary of Treasury Snow said, ``I am confident that this economic recovery will now be sustained and will

produce loads of new jobs. Everything we know about economics indicates that the sort of economic growth expected for next year, 3.8 to 4 percent, will translate into 2 million new jobs from the third quarter of this year to the third quarter of next year. That is an average of 200,000 new jobs a month.''

Well, we have had 4 months of experience since the Secretary told us we would get 200,000 new jobs a month. We have gotten less than 40 percent of that. In a period in which his reading of the rule of thumb said there would be 800,000 new jobs, we have gotten 300,000.

Similarly, interestingly, we then got from the Council of Economic Advisors and the President's economic report a projection that we would get in this calendar year 2.6 million new jobs, more than 200,000 a month. Shortly after that projection was made, it was repudiated by, guess who? The very same Secretary of the Treasury who had predicted the 200,000 a year. He and the Secretary of Commerce were sent out to do that. Then the President distanced himself from it. We use that word in Washington a lot, you ``distance'' yourself from it. That means you deny it.

Then the chairman of the Council of Economic Advisors, Mr. Mankiw, himself repudiated his own estimate. Here is what is significant. People make mistakes, but his explanation was interesting. On February 17 at the National Economists Club, asked about the job forecast of 2.6 million jobs, which had by then been abandoned by everybody, including himself, his response was, ``That particular forecast was made in early December, and we have seen more data since then.''

Now, he went on to say he still hoped for more jobs, but his explanation of why the 2.6 was now inoperative is very simple: that forecast was made in early December; we have seen more data since then.

In other words, last fall both the Secretary of the Treasury and the Chairman of the Council of Economic Advisors were going under the old rule that said a certain amount of increase in the GDP, you will get a certain number of jobs. And that turns out, sadly, to have been wrong.

We are in a situation in which the ability of the private sector to create wealth is now leaving behind its ability to create jobs.

By the way, we got further confirmation of that from Alan Greenspan. On February 11, testifying before the House Committee on Financial Services, he was asked what we could expect with regard to unemployment. Our colleague, the gentlewoman from New York (Mrs. Maloney), asked him, what about unemployment going down? His answer in effect was only if productivity drops.

To quote specifically, asked if the 2.6 million jobs, which, of course, had already been abandoned by the administration, was credible, he said, ``It is a credible forecast, if the rate of productivity slows down to a more historical average.'' He later said he did not expect productivity to slow down.

In other words, he joins the Secretary of Treasury and the Chairman of the Council of Economic Advisors in telling us we are not going to get the job growth they had earlier predicted, hoped, wished for, et cetera. But understand the explanation: we will only get a significant drop in unemployment, we will only get the historic drop that we can expect in unemployment, if productivity goes down.

What an unfortunate situation. After all, an increase in productivity is good news. In the economic sphere, it is one of the goals of civilization, to be able to produce more with less; more leisure, less effort. Increased productivity ought to be a good thing. But people who are now unemployed listening to Mr. Greenspan are forced to root against productivity. He tells them that if productivity continues to rise at a higher than historically average rate, that the chances of their getting jobs goes down.

That is where we are today. For a variety of reasons, we have a situation in which increased wealth has been somewhat disconnected from increased jobs; not entirely, but the connection has been loosened.

Another way to put that is this: a disproportionately large share of the increased wealth in this society is now going to the owners of capital. Our usual rules of shared increases in wealth have broken down, and people who work for others are getting a smaller share compared to those who own capital.

By the way, we see this not just in unemployment. Partly because of the increase in unemployment and what that does to the labor market, et cetera, we have a situation in which not only has unemployment stayed higher than historically we had hoped, but wage growth has been below the norm.

The Economic Policy Institute has a very interesting chart which shows the real growth in wages and salaries in the past six recessions, 2 years after the recession ended. Here are the increases in real growth in wages and salaries: 10 percent; 12 percent; 9 percent; 11 percent; 3.6 percent; and, in the current period, in the period since this recession was officially declared over by the National Bureau of Economic Research, 0.4 percent. In other words, virtually no growth in real wages.

Last year, in fact, in another calculation that is presented by the Economic Policy Institute, although it is not controversial, these are basic figures, last year, the year in which we had some real growth, 6 months of last year, after all, were great in terms of overall growth, real wages dropped, median earnings went up 2 percent; but inflation went up 2.3 percent.

In other words, during that period of great growth, not only did our unemployment stay higher than it should have been; real wages did not go up. In fact they went marginally down for people employed. In fact, over the last 2 years, the total increase in median wages here is 3.8 percent. Inflation is 3.9 percent and wage growth is 3.8 percent. So over a 2-year period, 2002 and 2003, there was marginal erosion in real wages.

It is not simply that unemployment has stayed up and real wages have lagged. Health insurance is another area where we have serious problems. In the period from 2000 to 2002, the number of people who were receiving health insurance from private employers dropped by 2.8 million. The number of people with health insurance went up, but it went up because the government sector, Medicare and Medicaid, made up for the erosion in the private sector.

The private sector's profits have gone way up. They are very high. Compensation at the upper levels, the top 1 percent, they are very good. But unemployment, employer-covered health benefits, real wages, are all lagging badly. And while I do not have the statistics on this right in front of me, what we know about health insurance is not only are more people losing privately paid for health insurance; many of those who keep it, keep it by paying a larger percentage of it. Health costs go up, and to the working person it is a double whammy, because they pay, in many cases, a higher percentage of a higher overall cost.

This is the problem then. We are at a situation in which as growth goes forward, and that is a good thing that growth is going forward. It was to be expected and hoped for. We were in a recession. We also have had conscious government policy promoting growth. We have the largest budget deficit, and as we know now, the Republican administration has implicitly become cagey in this regard and they argue that this kind of stimulus that comes from a very large deficit is a good idea, although they continue deficits long after we hope we will need stimulus. You have the lowest real interest rates in memory by the feds.

So everything the Federal Government can do in monetary and fiscal policy to stimulate the economy has been done. Not surprising that given that we start in the recession and you have maximum fiscal and monetary stimulus you get some growth. It is disappointing we have not gotten more. It is a little bit like buying a new car, jumping on the accelerator, and getting it up to 50. It is good for your staying in the speed limit, but it does not say a lot for the engine.

But the discouraging thing is that with maximum stimulus, fiscal and monetary, from the Federal Government, we are seeing no growth in real wages over 2 years, a slight erosion last year, people losing health care on the

whole from private employers and paying more for what they get, and unemployment staying too high.

What do we do about it? First of all, we have to analyze the causes. Some of the causes are inherent in the nature of the economy. Productivity does have the effect of allowing us to do more with less, particularly when you are coming out of a recession and people are reluctant to hire. There are also international trends which no matter what we try to do will be somewhat erosive of the position of some workers in this country. But this situation in which almost all of the benefits of growth are going to the owners of capital would not exist without conscious public policies that promote it.

Public policy in my view, and I will get to specifics, ought to be leaning against the increased inequality that the private sector is creating.

Madam Speaker, let me give you my philosophy. I am a capitalist. I believe the free enterprize system is the best way to create wealth. That means I welcome some inequality in the system. If you do not have inequality, if people are not unequally rewarded for their skills, for their energy, for their correct guesses or intuitions about what the public will want, then the system does not work. But I also believe that left entirely to its own, as I thought we had decided as a country with Franklin Roosevelt, more inequality will be generated than is either socially healthy or economically necessary.

I know there are some conservatives that say, well, that is just the politics of envy. Inequality is unimportant. The only thing that counts is the absolute level. Let me quote what they feel may be an unlikely source in the defense of my argument. It is Mr. Greenspan on the same day he testified February 11. He volunteered that he agreed that, well, let me read it exactly.

I had spoken earlier about my concern about increased inequality and he volunteered, ``I happen to agree with Congressman Frank that it is very important in this country not only to have an equitable society but to have it perceived as being inequitable because no democratic system can function unless the people believe it is inequitable. And I think that it is crucially important for us to reduce the income inequality in this country.''

Now, he goes on to say that he thinks a major way to do that is through community colleges. I am a strong supporter of community colleges, which do a wonderful job. I think Chairman Greenspan imposes on them too much of the burden. But regardless of our disagreement about how you deal with inequality, I welcome his statement. Let me quote it again.

``It is crucially important for us to reduce the income inequality in this country.''

The problem is public policy has gone the other way. It has exacerbated it. How has it done that? First by changes in the Tax Code.

When President Clinton asked this Congress in 1993 to increase taxes it was predominantly, overwhelmingly on people making incomes of $100,000 and above and that was 10 years ago. Mostly on people making more than $150,000. For the first time, according to the Congressional Budget Office, that tax bill made the tax system somewhat more progressive. It meant that wealthier people paid more than they have been paying and lower income people less in terms of shares given their income.

President Bush has succeeded in persuading this Congress on several occasions to reduce taxes predominantly, overwhelmingly on wealthy people. The administration has said the goal is to reduce virtually all taxes on capital.

Ownership will pay no taxes. Ownership will get the benefits of the increased wealth but pay none of the taxes. So the Tax Code is one of the reasons we have increased inequality. Another is the systematic attack that has been made on labor unions.

Labor unions have played a very important part in this country in helping middle income, moderate income working people gain some share of income. There has been a consistent assault on them from this Congress and from the President.

Madam Speaker, I would not have thought that so many years, 70 years almost, after the passage of the Fair Labor Standards Act in the New Deal that overtime for people who work by the hour would be a controversial situation. But this administration, with the acquiescence of the Congressional leadership, is allowing overtime to be cut back. So we weaken what instruments are out there to help working people. We change the Tax Code in ways that promote inequality. We pursue an international economic policy which maximizes the extent to which globalization undermines income shares in this country.

I was pleased to be at Davos, Switzerland, at the economic conference. One of the moderators of a panel I was at on inequality, because the people who run that conference agree with Chairman Greenspan and myself that inequality is in and of itself a bad thing. It needs to be addressed. The moderator made a good point. He said, there are two kinds of inequality we have to address. There is inequality between countries and then there is inequality within countries.

The defense that we have heard of international trade, much of which I agree with, has focused exclusively on diminishing inequality between countries. That is a good thing. I want to help poor people elsewhere. But this administration has in a determined way pursued that international economic policy and justified it as helping to deal with poverty elsewhere. But they have done it in ways that have exacerbated inequality within countries, within our own country and within others.

International trade that basically says, you know what, labor regulations and occupational safety and health regulations and environmental regulations, they are an interference with the function of capital. Therefore, let us tell other countries that we will put no pressure on them to deal with any of those things, and then let us use the absence of those things as a lever to reduce them in our own country.

Understand, it is not as the conservatives here believe that there is no comparative impact of differential environmental policies. Indeed, when President Bush explains why he is against doing anything about global warming, certainly against the Kyoto Treaty, explicitly he and members of the administration say we cannot join that treaty with global warming because China and India are exempt from it and that will make a competitive disadvantage for our people.

Of course, his Chairman of Economic Advisers will tell him that you go over that by outsourcing to China and India. That is a good thing. And he should not have to worry. But the President does not go quite that far.

Some of us say, you are right. The fact that they have no environmental rules and we have some does exacerbate our competitive disadvantage. Let us try to get them to do some environmental things.

No one I know of says that the wage level, the minimum wages or the working conditions ought to be the same in the poorest countries of the world as in the U.S. No one is arguing that. That is a straw man.

What we are saying is they should not go standardless. There should be the core labor principles of the International Labor Organization: The right to bargain collectively, the right to form unions, the right to begin to organize as American workers did. Had there never been unions and Franklin Roosevelt had not gotten passed the National Labor Relations Act, we would not have had the kind of middle class that we had in America of which we now boast. They did not do it all by themselves. They were an integral part of it.

At any rate, what this administration wants to do is follow an international economic policy that is further erosive of the ability of working people in this country to maintain some gains because they subject them to maximum competition from others who do not have that. Obviously, there are different wage levels. There are jobs that will go overseas purely economically. That should not be enhanced by an undeserved advantage because there are no unions, because there is child labor, because there are no environmental rules, because there is no concern for occupational safety. That is, yes, comparative advantage in economic terms has a lot to be said for it, but adding to that differential public policies, not only is it in itself bad but it becomes the premise then to

come back home and try and dismantle it.

American workers are told two things by this administration. One, we are not going to try to encourage other countries to require them if they want access to our markets. The American markets are the greatest thing in the history of the world. People want our capital. They want access to our markets. We have a right to condition that on reasonable legislation and regulation that meets minimum standards of civility.

Instead, what we are told is you come here and we will not require of you anything that is protective of those basic human rights. And then American workers will be told by their workers, you know, I am competing with people who do not have unions. I am competing with people who do not have to put up with this occupational stuff so I have got to cut you back. And let us throw in here the very serious problem of health care.

I note on the floor my colleague from the State of Washington (Mr. McDermott), who has been one of the leaders in this Congress in trying to get a sensible health care system in, one of the things that has contributed to the difficulties that American workers face is our system of tying your health care to your place of employment. That has serious negative consequences. And today as the forces I have been talking about have eroded the ability of working people to defend themselves, we are seeing this in the health care area.

Remember, fewer people today, in the millions, have employer- generated health care and many of those who do have health care that costs them more. Fewer people, and they are paying more for it.

So those are some of the ways in which public policy makes the situation worse. As I said, I accept the fact of inequality. I just do not accept that it is a good thing. It makes the system work. But the role of government ought to be to contain inequality, not promote it, and that is what we have.

Let me talk about why I think inequality is a bad thing. It is nice to be able to cite Chairman Greenspan, but to be honest I do not agree with him on cutting Social Security or a few other things so I should not just rely on that citation.

I think it is a moral issue, a situation in which people receive millions, tens of millions of dollars in bonuses, a situation in which profits go higher and higher and the market is now doing well and we are all glad to see that, a situation in which the owners of capital find their wealth enhanced, but working people lose their health care, people are unemployed, children do not have adequate housing and other necessities. That is morally unacceptable to me.

But I understand, Madam Speaker, particularly in this particular Congress, the moral argument will only take you so far. When I argue that we should deal with inequality because it is immoral I am reminded of what Adlai Stevenson once said when someone said to him, Governor, you have got the votes of all the thinking people. And he said, well, yes, but the problem is that I need a majority.

Of course it was his penchant for making remarks like that that helped him in getting a majority. But I think there is a strong moral argument here, but I need a majority so I will not rely only on that.

There are two other reasons for helping us reduce inequality, helping us reverse it. Let me just repeat this because I think we have not fully focused on that. We talk about unemployment in a kind of isolation. We talk about other things in isolation. There is an overall picture here. The overall picture is that the private sector is creating wealth and exacerbating inequality at the same time. It is creating wealth without creating an adequate number of jobs. It is eroding health care. It is preventing real wages from going up so that profits are going up much more rapidly than real wages.

Essentially, we have a combination of economic factors and technological factors and public policies, which mean that a disproportionately large share, nearly all of the increased wealth we are producing, goes to the owners of capital and virtually none to the people who do not own a huge amount of capital and get their compensation from the work they do every day.

Now, as I said, I think that is morally flawed. That is why I am in politics, to try and reduce inequality without reducing it to the point where it interferes with inefficiency. And we are, of course, nowhere remotely near that.

But let me give two other self-interested reasons. First is a political one. I read recently that the Republican leadership has decided that they probably better not put the Central American Free Trade Treaty up.

I have disagreed with the trade treaties that have come forward for reasons that I have said. I think globalization is a necessary thing. It is a fact of life, and it can be a good thing if it is done well. It is important for us to try to reduce poverty elsewhere: good morally, good politically, good practically.

I never liked the particular trade treaties. So I am talking now to the people who do. There are people out there who think that getting more trade treaties through is, in fact, important for the economy. There are people who believe that continuing to allow businesses to rationalize their workforces, rationalize means cut, that that is a good thing.

What do you see today? You see great opposition to the trade treaties. They are afraid to bring any up here, for good reasons. They would probably lose. They have Republicans saying to them, please, I have enough problems that you have created for me; I do not need to vote for trade treaties when there is this terrible problem about unemployment.

You are going to see legislation adopted, you do not have to be a genius to predict this, which says if you are going to get government money in this contract, you cannot outsource, because outsourcing has bothered people. Ten or 15 years ago, I was representing an area that had a large textile and trade employment base, and we were told, well, stop worrying about that, these people should understand. That is not a good job for an American. We will retrain them.

Well, first of all, the extent to which you were going to retrain some 49- or 53-year-old with a high school education was limited in terms of its appeal to them; but even to the extent that you were retraining, let us note that the jobs that I was being told 15 years ago, for which we would retrain people, we would not only now have to retrain them, we would have to buy them airplane tickets because they are going out of the country. The jobs being outsourced today are the jobs for which we had been told we should retrain people.

I do not think the answer is just to stop this. I do not think you can say, all right, we do not want any more of this going on in the economy. I understand the importance of economic transition, although I believe that we are failing in our responsibility to manage that transition.

What I will point out now is this: precisely because of the public policies that have exacerbated inequality, what you have done, those of you who have promulgated those policies in the administration and the congressional leadership, in the business community, in the intellectual circles that reinforce them, you are increasingly persuading the American people that they have no skin in this game of economics, that they will not benefit from this increased wealth. So when you say to them, do this, it is in your long-term interest, they turn against you.

So precisely out of self-interest, those who believe that increased trade and the ability to outsource and flexibility in the labor market, if you believe those things, understand that the policies that you have supported in the short-term and the consequences of that have built up a resistance you cannot overcome. Those people who believe in increasing the ability of capital to find its own level are going to find they are going to have the worst year they have had this year than they have had in a very long time because they have convinced most Americans that it is not in their interests.

I talk about this with Mr. Greenspan when he testifies. He will cite in his speeches and elsewhere a very eminent deceased economist, Joseph Schumpeter. In his great book, ``Capitalism, Socialism and Democracy,'' he

talked about creative destruction. He said, you know, he did not say you know. He was an illustrian, much more formal than me. Than I. He would not say than me either. Joseph Schumpeter said, when you destroy old economic entities because they are outdated, new ones will be created out of the resources freed up. That is what he means by creative destruction, Mr. Greenspan. As old economic activity is outdated, that frees up people and resources for new economic activity; and Mr. Greenspan is prone to say to people, I understand you are losing your job and that is a problem, but in the long run this will be good because out of this will come this new stuff.

Well, as I have told Mr. Greenspan, there is another economist whom people believe much more instinctively, John Maynard Keynes, because if you listen closely to the Bush administration and some of the conservatives here, a lot of Keynes-ism has sneaked in as they tried to justify the world's largest deficits by short-term budget terms.

Keynes also said something very smart politically: in the long run we shall all be dead. People understand that. Telling some 45-year-old worker with a couple of children that he or she should not despair at losing the job that he or she has had for 20 years because out of the loss of his or her job new jobs will be created at some point in the future, which he or she probably will not get, does not help them. They are resistant.

So people should understand, one of the prices they are paying for enhancing inequality, encouraging it, is that you have persuaded most Americans, an increasing number of Americans, it may yet be most, but it is certainly a lot, they are immune to your argument that this is good for the economy and the country. I do not think that is healthy. I do not agree with necessarily every one of those specific policies, but I do not think we ought to have this angry public resistance to overall growth; but you have built it up, and we need to tell you how you can undo it.

Now, there is another reason why this is not good economically. One of the private sector economists, Stephen Roach, who has done a good job of documenting the fact that we are at an inflection point, that we are in a situation in which we simply are not getting the job growth we thought historically we would get, well, let me just quote him: In my view, the income leakages of imported productivity, that is, when you send the jobs overseas, et cetera, that is imported productivity, the income leakages of imported productivity raise serious questions about the sustainability of this recovery from an economic point of view.

What you are saying is this, the economy is sustained to some extent by its own momentum. One of the things that helps you grow is the income that is generated by that growth. There is a beneficial cycle that we call it. You are not getting that now because as the profits grow and wealth grows, but real incomes of most of the people do not grow, there is a missing element in the economy. Short term, we are not hurting; but there is a very real prospect that this increased inequality will stunt our economic growth. In other words, the situation in which growth is great but all of the benefits of growth go to a handful is not long-term sustainable. So, once again, even those who do not mind the increased inequality do not understand they are building in a difficult situation.

Wage and salary disbursements, Mr. Roach points out, are basically unchanged in real terms fully 21 months into this recovery. By contrast, at this juncture in the past six upturns, real-wage income has been up on average by about 9 percent. Absent other sources of support, this shortfall of internally driven income generation could end up spelling serious trouble for the overly indebted, saving-short American consumer. Let me read that a little more sensibly, for the overly indebted, saving-short American consumer. In short, there is a good reason to doubt the sustainability of a recovery built on a foundation of imported productivity.

In other words, when you create wealth and some of it goes, most of it, to the owners of capital and some of it goes to people outside our economy, you are not doing the kind of self-sustaining recycling of economic activity that you need. So that is where we are.

We are at a situation, as I said, which seems to me an inflection point. The normal rules by which a certain amount of economic activity in the country will produce a certain amount of jobs, that has been eroded; and as we have seen high profits, we have seen a fall-off in real wages. We have seen a fall-off in the private sector provision of health insurance which is supposedly the major way we do it. We have seen unemployment staying above where it should be. We have seen profits do very well. We have seen the market go up. We have seen upper income compensation stay up. We have seen the Tax Code change in ways that unfortunately reinforced that.

Well, it is fair to say at this point, okay, what do you do about it, because conclusions are not always easy. Some things we can do. When it comes to inequality in the society, there is, of course, the story about a man who goes to the doctor and says, Doctor, when I hold my arm this way it hurts, and the doctor looks and looks and cannot find anything wrong, and he says, okay, I know what to do. He says what? Do not hold your arm that way.

I mean, to a certain extent, you can remedy something by simply not continuing to do it. We can stop changing the Tax Code in ways that exacerbate inequality. We can stop encouraging owners of capital to find ways, with tax help in some cases, to export jobs and import productivity. We can stop weakening labor unions, stop eroding the ability of working men and women to stand up for themselves; but we can go beyond that.

First, with regard to international trade, and I do not want to stop it, not anybody does, but we have a group here, one of the leaders intellectually is the gentleman from Michigan (Mr. Levin), who is the senior Democrat on the Subcommittee on Trade, and a lot of us have worked with him, we do not want to block trade, but we want to deal both with income inequality between countries and income inequality within countries. We do not want the one to be exacerbating the other.

We do not expect other countries to have the same wages and environmental and occupational health policies we do, but we do not think they should have none either. We think they ought to be encouraged to level up some, and it will not stop trade; but it will diminish the depths of the comparative disadvantage and make it a more legitimate one.

We can, as I said, even change the Tax Code to make it even more progressive. I think it is entirely legitimate for this government to say, by the way, where the government, where the people, through their taxes, are paying for jobs, we do not want you outsourcing them. Even if it costs us a little bit more, we believe that the value to this society of not having that source of income in jobs lost is worth it. So I think restrictions in outsourcing will help.

But there is one other thing I want to address in particular here. It is one that I think I and many Democrats have not been sufficiently explicit about.

One of the important sources of relief here is government. I know it is very fashionable to bash government. From the platform just behind me, President Clinton, with whom I was usually in agreement, made a big thing of saying the era of Big Government is over. Well, in worldwide comparative terms, the era of Big Government never really got started here, and our problem today is too little government. Of course, we want government to be sensible. We do not want excessive regulation. I have supported many of the deregulations, but there is a role for government today that we are ignoring.

I mentioned as an example health care, and I pointed out that health insurance coming from private employers has dropped. The only reason that health insurance in the country as a whole has not dropped is we have taken up that slack through government, through Medicaid, through Medicare. People tell us, well, government medicine is terrible.

In my experience, the most popular form of medicine in America is that which is delivered through the Veterans Affairs Department; and anybody who tells World War II veterans, average age of 80 or so, that they are not

going to get their VA medicine anymore better be ready for World War IIA because they are going to be very angry at you.

In fact, we have relied on government to plug part of the gap that is increasingly left in the provision of health care by the private sector, and I am for those as stopgaps; but we would be much better off following the lead of my colleague who I have referred to earlier from Seattle, the gentleman from Washington (Mr. McDermott), and let us do this in a systematic way.

We need more of a government role in health care, and breaking the nexus between your private job and health care makes sense from every perspective. It would remove a disadvantage from some American businesses, and I would say this to Mr. Greenspan and others who preach patience to those who are losing their jobs to these trends. It is one thing to lose your job, get unemployment for a while. We will get to that in a minute, maybe get another job. Increasingly, though, the jobs you lose had some health benefits and the jobs you get do not.

One of the things that people who kind of blithely tell people do not worry about it, creative destruction, you will be okay in the long run, maybe not blithely, maybe that is unfair, but who tell people just buck up, they do not understand the terror and horrors of losing health care. As long as Americans who lose their jobs are told they are also losing their health care, they are resistant to what is euphemistically called labor flexibility and will understandably and legitimately be very tough.

Let us begin by providing health care to every American whether or not he or she is employed and regardless of where he or she is employed, and you will reduce a lot of the resistance and a lot of the pain that comes from these transitions.

I do not think we should try to stop economic transitions, and I do not think we can; but it is our responsibility as public sector people, as the private sector undergoes these transitions, to manage them better, to ease the pain of the victims of the transition, to use some of the wealth generated by this increased productivity, by this labor flexibility, by this rationization and globalization. Let us use some of the wealth not simply to go to the pockets of those who own but to deal with the social problems generated by that very transition.

Government also has a major role here in the job area. People then say, okay, what are you going to do about the jobs? Here is the way I would conceptualize it.

We are now, as I said, in a situation where the private sector produces more wealth than jobs. I believe we should take a percentage of that increased wealth, a fairly small percentage, certainly nothing that is going to interfere with incentive, and use it together, the people coming together to employ people on socially useful purposes. Yes, we got some boosts from tax cuts last year during the recession. I think we would have gotten a better boost economically and socially if we had given more to the cities and States and municipal governments. They added to the unemployment problem, not willfully. They hated to do.

But for a variety of reasons, as we were trying to get the private sector to add jobs, we were involved in policies that cost jobs at the local level. Had we instead given tens of billions more to the local governments and State governments, we would have had better economic stimulus.

You know, nobody will have a propensity to spend, in economic terms, as high as a city government that is stressed and needs to provide services. That is especially the case when we talk about homeland security. There are things in our society which are partly public and some that are largely private. Some are entirely private in terms of what we want done. Homeland security is pretty much a public sector activity. It does not make any sense to talk about how we are enhancing homeland security and then beat up government and boast about reducing government. Police officers, firefighters, ambulance drivers, public health workers, and public works people, who are going to have to repair damages, these are public sector people.

The point is this: One of the ways we can deal with the inability of the private sector to produce the level of jobs we had hoped it would produce, and again I want to note John Snow and Gregory Mankiw, leaders of this administration's economic policy, in effect both admitted that last year they predicted many, many more jobs than are being created in the private sector because they thought the old rules applied, and it is now clear the old rules do not apply. So, what do we do? Well, one of the things we can do is to recognize that the public sector can in fact take up some of that slack, that some of the wealth we create through our increased productivity, et cetera, can usefully be sent to cities and States, and to others as well.

We are now underfunding the Environmental Protection Administration. We have Superfund sites, the worst environmentally blighted sites in this country, that are going to go untended because there is not enough money in the Federal Government to take care of them.

The Bush administration finds itself being criticized by veterans through an inadequacy of the government. Secretary Principi, a man of great courage, acknowledged he got $1.8 billion less in the budget this year than he thought he needed. I do not believe the President dislikes veterans. I do not believe this administration set out to say, I have a good idea, in an election year let us really aggravate the veterans. They are driven to it because, thanks to their policies, there is not enough money to meet our basic needs.

If we were to take some part of the private sector wealth that is now going almost exclusively to the owners of capital and put it in the hands of government, Federal, State, and local, we would have more police officers, we would have more Environmental Protection Administration cleanups, we would have better public transportation and trains, we would have more medical care, we could deal with the terrible housing crisis that we have. And I know to the Republican leadership this might sound like a revolutionary bill, but we might even pass a highway bill. That seems to be beyond their means. Why? Because there is not enough money.

I just wrote an article for one of my papers, and I said I know you hear a lot of discussions in the abstract about the size of government, but let me make it concrete for you, and I mean literally concrete. I am not a big fan of metaphors. Under the proposed public works bill that the chairman of the Committee on Transportation and Infrastructure wanted, I would have gotten so much money for a major highway project important both to the public safety and the public convenience and the economic development of a major city in my district, the City of Taunton. Under the Bush plan we would get one-third less. Now, this is highway money that is, I am told by the business community, important to the economic future of the area.

This is a clear point here. We now have the acknowledgment of the Chairman of the Council on Economic Advisers and the Secretary of the Treasury and the President that the private sector cannot produce enough by way of jobs to meet our needs. Wages are eroding in part because as there is higher unemployment, the pressure on wages is higher. Medical care gets cut back to the extent that we rely on the private sector.

We will remain a private sector economy. We should welcome productivity. We are in a situation, just to sum up, in which the good becomes the bad. Greenspan tells us we are not going to get a reduction in unemployment unless you see a slowdown in productivity. What a topsy-turvy world in which people have to root for less productivity. That is the result of bad public policy. This is not a force of nature. It is not the case that good productivity ought to mean bad social policy. It is because we have a bad set of public arrangements.

One way to change that is to take some of the wealth which is being created by this wonderful thing, this increased productivity, this new technology and the ways of using it, and all this innovation, and let us use it for our own undisputed public purposes. Let us give cities and States more money so they can have more people

policing, fighting fires, cleaning up the environment, repairing facilities that need to be repaired, enhancing train transportation, building highways, helping construct affordable housing in places where that is a crisis, helping pay for higher education for students.

Chairman Greenspan said it is education, but we have a situation now where if you are not wealthy then you cannot pay for the kind of public education that maybe you ought to be getting. You have to sacrifice too much for it. Let us use some of this wealth.

And, again, the choice is this: We are talking about more wealth going to the wealthiest. And I know there are two aspects of the administration's justification for its tax bill, a supply side and a demand side. The demand side says we are in a recession, we need to spend our way out of it to some extent or we need to create a deficit so the Federal Government is spending more than it is taking in. Good Keynesian economics. Good for Keynes in the 1930s, good for Bush in the year 2003. That is what we did.

But that was only a small part of the tax relief. A very small percentage of the tax relief came in the form of that demand stimulus. The great bulk of the tax relief, some of which is yet to come, some of which has begun to happen, is a supply side tax cut. Supply side tax cuts do not try to increase money in people's hands to spend. They say if we will tax rich people less, they will do us the favor of working more. And that is what we have got. If we tell people when they die and they have $8 billion the people who inherited from them will not have to pay a penny of taxes on it, then they will accumulate more. That is their argument.

I do not think there is much to the supply side argument at all. It is certainly unproven. And certainly it is the case that trying to justify a very large chunk of supply side justified taxes by the success of a smaller amount of demand side taxes has a total disconnect there. I think if we were to take some of the revenue that is now set aside to persuade the rich, the very rich to work harder to the benefit of all of us, though we have not yet seen that benefit, if we were instead to make that available for undisputed, noncontroversial public purposes, public safety, environmental cleanup, highway construction, public health, if we were to do that, it is a situation of multiple benefit. The public purposes are accomplished and there are people employed.

We are talking now to some extent about the New Deal philosophy. But we are not talking about leaf raking. We are talking about very real needs. And, of course, it was not just leaf raking in the New Deal. A lot of very important things were built by the Works Progress Administration and even the Public Works Administration. But we are talking now about unmet needs in this society. In virtually every area where we come together: In education, where we underfund the No Child Left Behind Act; in the environment, where we are leaving Superfund sites untended; in veterans affairs, where the veterans legitimately complain about cutbacks; in highways, where the chairman of the committee is told, no, you cannot have the money you think we need for this; in housing, which comes within the jurisdiction of my committee, where not only are we not building any new affordable housing, we face a crisis where nearly a million units over the next 10 or 12 years will be lost to us if we do not reverse policies.

Using some of the money that now goes overwhelmingly to the owners of capital, only some of it, leaving them still very well off, and making that available to the government, to the public, is economically and socially better. So there is a case now for taking some of that wealth and for more government. Sensible government? Yes. There are indisputable cases where this country believes, understands that we need more public spending. We now have an ability.

And that takes me finally, Mr. Speaker, obviously, to the question of the tax cuts. This is the issue before us. Do you, as the President wants, make permanent all those tax cuts, which exacerbate inequality, which enhance the situation where the owners of capital get almost all the wealth, and which does not appear to be generating the kinds of jobs and other benefits we had hoped for; or do you take a part of it and make it available to the public sector so that undeniable public needs can be met and people can be better employed?

I would just say in closing to my conservative friends, who are currently and I hope temporarily in control, you have the ability to say no to all these things. You can keep wealth-enhancing tax cuts in place, you can continue to cut back on overtime, you can continue to undermine labor unions, you can continue to pursue a trade policy that gives leverage on people to bring down rather than up any kind of protections, and you may win these battles in the short run. But you are every day increasing public resistance to what you think is necessary for overall economic policies.

So if equity is not enough, self-interest ought to persuade those at the top of the private sector, and those who represent them politically, that the time has come to recognize that we have a changed economy and to adopt public policies and reverse the trends of making inequality worse and instead diminishing so that we get both more jobs and a healthier society and a more sustainable economic recovery.

Madam Speaker, I submit for the Record documents supporting and relating to my special order speech.

The Evidence on Job Creation, Wages, and Health Insurance

Non-farm payroll employment increased by 88,000 in October

2003, by 83,000 in November 2003, by 16,000 in December 2003,

and by 112,000 in February 2004. (Source: Bureau of Labor

Statistics.)

Real wages has grown by 0.4% since the end of the recession

in November 2001. In the five previous recessions, real wages

grew by 10.7%, 12.4%, 9.2%, 11.3%, and 3.6%, by the same

point in the recovery (25 months). (Source: Economic Policy

Institute based on Bureau of Economic Analysis data.)

Growth in median wages in 2002 was 1.8%, compared to

inflation of 1.6%. In 2003, median wage growth was 2.0%,

compared to inflation of 2.3%, resulting in a decline in real

median wages of 0.3%. (Source: Economic Policy Institute

based on Bureau of Labor Statistics data.)

Between 2000 and 2002, employer-provided health insurance

declined by 2.8 million people. (Source: Urban Institute

based on Current Population Survey.)

During the past five years, health insurance premiums have

increased annually by 5.3%, 8.2%, 10.9%, 12.9%, and 13.9%.

(Source: Urban Institute based on KFF/HRET Survey of

Employer-sponsored Health Benefits.)

Mr. Speaker, one aspect of my work in Congress of which I am most proud is the aid I am able to give to credit unions, which perform such an important economic and social function. One of the people who has helped me understand the role of credit unions is Daniel Egan, who plays a leadership role not just in Massachusetts, but through cooperative arrangements with our neighboring States of New Hampshire and Rhode Island.

Recently, the Neighborhood Reinvestment Corporation, a very important national organization fighting for economic fairness, passed a resolution congratulating Dan Egan in his capacity as president of the New Hampshire Credit Union League--which he holds in addition to his Massachusetts work--for his efforts to promote credit union activity.

Mr. Egan very much deserves this recognition and as a tribute both to him and to the important work of the credit unions of New England, I ask that the resolution from the Neighborhood Reinvestment Corporation be printed here.

Resolution Commending New Hampshire Credit Unions and the New Hampshire Credit Union League for Their Statewide Partnership with NeighborWorks

Organizations

Whereas, the Neighborhood Reinvestment Corporation and its

affiliated NeighborWorks organizations are devoted to

providing non-profit financial counseling and affordable

housing in more than 2,300 communities throughout the United

States;

Whereas, New Hampshire Credit Union League President Daniel

Egan and the National Credit Union Administration co-hosted a

workshop to encourage credit unions to partner with

NeighborWorks organizations;

Whereas, as a result of that workshop, leaders of New

Hampshire's 32 credit unions pledged a total of $35 million

to establish a fund, in conjunction with the Neighborhood

Housing Services of Manchester, a NeighborWorks

organization, to provide affordable housing, counseling and

loan programs;

Whereas, the Home Ownership Loans program provides a

NeighborWorks course on life skills, financial management,

and property management for first-time homebuyers who do not

qualify for conventional mortgages;

Whereas, the Family Emergency Loans program helps families

in need make critical payments such as home heating bills,

and provides NeighborWorks counseling for these families to

set aside funds that will protect them from future

emergencies;

Whereas, the New Hampshire credit unions' partnerships with

NeighborWorks

organizations serve as a model for other institutions to

partner with NeighborWorks organizations throughout the

United States: Now, Therefore, Be It

Resolved, The Board of Directors of the Neighborhood

Reinvestment Corporation officially commends the credit

unions of New Hampshire and the New Hampshire Credit Union

League for establishing this fund in partnership with the

NeighborWorks network in New Hampshire and helping to make

homeownership affordable so that more people can realize the

American dream and lay a foundation to build wealth that they

can pass on to future generations.

Mr. Speaker, I think it was highly inappropriate for Justice Scalia to go on a hunting trip with Vice President Cheney when he was a defendant in a case, but it is inaccurate to say that this calls into question Justice Scalia's impartiality. You cannot call into question that which does not exist.

Questioning Justice Scalia's impartiality is like questioning Janet Jackson and Justin Timberlake's sense of propriety, or Saddam Hussein's weapons of mass destruction, or the President's plan to cut the budget deficit in half in 5 years.

In fact, if you read Justice Scalia's opinions, they are singularly devoid of impartiality. Here is a man of very vigorous views and prejudices, and he does not see any reason why he should not write them into various opinions.

So, I guess in some ways this is a defense of Justice Scalia. I wish he had refrained from going on that hunting trip with the Vice President, but those who accuse him of having damaged his impartiality, he has a defense of that, well-known to lawyers, it is a defense of impossibility.

Mr. Speaker, during my service as a Member of Congress, I have from time to time worked with the Export- Import Bank on matters particularly important to significant employers within my district. In an ideal world, there would be no subsidies of any sort for exports. But in the real world which we inhabit, Americans seeking business elsewhere often confront heavy subsidies from other countries, and without an instrumentality like the Export-Import Bank, these American enterprises would be at an unfair disadvantage. The Export-Import Bank's existence enables many American companies to compete on even terms, with good results both for the companies that provide goods and services and those that benefit from them. For example, several years ago I was proud to work with the Export-Import Bank to make it possible for the Raytheon Corporation to receive a major contract in Brazil, which allowed Raytheon to use its technical skills for environmental purposes. Without Export-Import Bank aid, the Raytheon effort would have been unsuccessful, not through any fault of their own, but because of heavy subsidies from the national governments of competitors.

Most recently, I was glad to join several of my Massachusetts and New Hampshire colleagues in urging the Export-Import Bank to show support in a meaningful way for the Malden Mills Company, whose owner, Aaron Feuerstein, has justly drawn widespread praise for his combination of economic wisdom and social responsibility. I was pleased that the Export-Import Bank did respond in ways that were very important in this situation, and I am pleased that we have this entity in place to provide this kind of essential assistance to American companies who would otherwise be facing unfairness.

Mr. Speaker, trying to decide what is the greatest hypocrisy in politics is a hard job, but I believe that by sheer dollar volume the support of many who call themselves free market conservatives for the leading aspects of America's agricultural policy qualifies for the prize.

Few areas in public policy in this country are as heavily subsidized by the taxpayers, rigged against consumers, blatantly unfair to poor people in other parts of the world, and contemptuous of the whole notion of competition and free enterprise as American agriculture policy in various of its aspects.

I am frequently puzzled to hear many who declaim their staunch allegiance to free trade, low taxes, no government intervention in the economy, the free market, and unmitigated competition make an implicit exception when the subject is corn, cotton, wheat, peanuts, sugar, or other commodities. Apparently, there are people who believe that the works of Ludwig von Mises and Friedrich Hayek contain an invisible footnote that says that none of this applies to agriculture.

In the February 12 Washington Post, just before we went on our mid- winter break, George Will documented the blatant inconsistency with regard to the sugar program of the U.S., noting correctly that it has once again contributed to the demise of jobs in the United States by people who had been manufacturing candy. I disagree with much of Mr. Will's conservative approach to economic matters, so I do not agree therefore with everything he says in this column. But I salute his intellectual honesty in urging that the conservative economic principles he professes be applied across the board, without the exception for agriculture made by so many others who claim to be his conservative confreres.

[From the Washington Post, Feb. 12, 2004]

Sweet and Sour Subsidies

(By George Will)

Saturday, Valentine's Day, sweets will be showered on

sweethearts--a bonanza for candymakers. But the very next day

all 242 Fannie May and Fanny Farmer chocolate candy stores

will be closed.

They and many jobs--625 of them at the firm's 75-year-old

Chicago manufacturing plant--are, in part, casualties of that

outdated facility, bad business decisions, and high U.S.

labor and other costs. But jobs in America's candy industry

also are jeopardized by protectionism, which is always

advertised as job protection. In this case, the protectionism

is an agriculture subsidy--sugar import quotas.

Chicago is no longer Carl Sandburg's wheat stacker and hog

butcher, but it remains America's candy capital, home of

Tootsie Rolls and many other treats. In 1970, employment by

the city's candy manufacturers was 15,000. Today it is under

8,000, and falling.

Alpine Confections Inc. of Utah has bought Fannie May and

Fanny Farmer and may continue some products. This is partly

because the price of sugar is less important in soft

chocolates than in hard candies.

But the end of 2003 brought the end of Brach's production

of hard candy on the city's West Side. A decade ago, Brach's

employed about 2,300 people. Until recently,

many of the remaining Teamster jobs paid $19 an hour. Many

signs in the abandoned Chicago facility were in Spanish,

Polish and Greek for the immigrant workforce, most of whose

jobs have gone to Mexico. Labor is cheaper there, but so is

92 percent of the raw material for hard candy--sugar. By

moving outside the United States, Brach's can pay the world

market price of sugar, which is one-half to one-third of the

U.S. price as propped up by import quotas.

Life Savers, which for 90 years were made in America, are

now made in Canada, where labor costs are comparable but the

yearly cost of sugar is $10 million less. Chicago's Ferrara

Pan Candy Co., maker of Jawbreakers, Red Hots and Boston

Baked Beans, has moved much of its production to Mexico and

Canada.

Dueling economic studies, few of them disinterested,

purport to demonstrate that more American jobs are saved or--

much more plausibly--lost because protectionist quotas raise

the price of sugar for 280 million Americans. In the life of

this republic, in which rent-seeking--bending public power

for private advantage--is pandemic, sugar quotas are

symptomatic.

It was to a North Dakota radio station that Robert Zoelick,

the U.S. trade representative, vowed that he would stand like

Horatius at the bridge to block Australian sugar. The quotas

can be considered among the bearable transaction costs of

democracy, keeping North Dakota's, Minnesota's and other

states' growers of sugar beets as well as Florida's,

Louisiana's and other states' growers of sugar cane from

starving.

Or seceding. Or, heaven forfend, being forced to grow

something else. But protectionism is unconservative, unseemly

and unhealthy--indeed, lethal.

Unconservative? Protectionism is a variant of what

conservatives disparage as ``industrial policy'' when

nonconservatives do it. It is government supplanting the

market as the picker of economic winners. Another name for

industrial policy is lemon socialism--survival of the unfit.

Unseemly? America has no better friend than Australia. Yet

such is the power of American sugar interests that the Bush

administration has forced Australia to acquiesce in

continuing quotas on its sugar exports to America. That was a

price for achieving the not-exactly ``free trade'' agreement

signed last weekend. But look on the bright side:

Restrictions on beef imports will be phased out over 18

years.

Is protectionism lethal? Promoted by Democrats hawking

their compassion, protectionism could somewhat flatten the

trajectory of America's rising prosperity. But protectionism

could kill millions in developing nations by slowing world

growth, thereby impeding those nations from achieving

prosperity sufficient to pay for potable water, inoculations,

etc. Developed nations spend $1 billion a day on agriculture

subsidies that prevent poor nations' farmers from competing

in the world market.

Sugar quotas, although a bipartisan addiction, are worst

when defended by Republicans who actually know better and who

lose their ability to make a principled argument against the

Democrats' protectionist temptation. Fortunately, splendid

trouble may be on the horizon.

Last September's collapse of the World Trade Organization's

ministerial meeting in Cancun, Mexico, meant that the

pernicious ``peace clause'' was not renewed. For nine years

it has prevented the WTO from treating agricultural subsidies

as what they obviously are--market distortions incompatible

with free trade. For Americans, a fight over that is worth

having, and losing.

Mr. Speaker, there has been a very interesting phenomenon in recent months that demands attention. A steady stream of former high-ranking Bush administration officials have conscientiously pointed out the inaccuracy of many of the claims the administration has made and continues to make about its policies.

In December, last year, I inserted into these pages a very interesting article by Richard Haass, former chief of the policy planning staff of the State Department, who confirmed what many of us have long argued--namely, that the war in Iraq was a war of choice and not of necessity. That is, Mr. Haass made it clear that the decision to go to war with Iraq was not driven by a fear that Iraq was any serious threat to the United States of a physical sort, but rather was part of an administration policy about how the world ought to be structured.

Most dramatically, former Treasury Secretary Paul O'Neill has been widely quoted as a result of the book by Ron Suskind not only essentially agreeing with Mr. Haass about the genesis of the Iraq war, but making clear the great gap that exists between the reality of Bush administration economic policies and the rhetoric they have used to describe them.

Recently, a third high-ranking Bush official has rebutted the administration's claims, and buttressed this with reference to actual events in which he participated as a member of the administration.

Flynt Leverett was a high-ranking official at the National Security Council from 2002 until 2003, serving as Senior Director for Middle Eastern Affairs. In a recent article published in the New York Times, he refutes the administration's argument that the decision by Libya to renounce nuclear weapons was a direct result of the administration's war in Iraq. His argument is a compelling one, combining very thoughtful analysis with a good history of the events that led up to this. It is impossible to do justice to this thoughtful essay by compressing it, so I ask that it be inserted here so that Members and others may read it and draw their own conclusions.

But I do believe that the conclusion of Mr. Leverett's article-- remember he was a high-ranking National Security Council official appointed by the Bush administration--is worth underlining:

Until the Bush administration learns the real lessons of

the Libyan precedent, policy toward other rogue regimes is

likely to remain stuck in the mud of ideology.

[From the New York Times]

A Lesson in Diplomacy

more than threats led to qaddafi's reversal

(By Flynt Leverett)

Washington.--As President George W. Bush made clear in his

State of the Union address, he sees the striking developments

in relations with Libya as the fruit of his strategy in the

war on terrorism.

The idea is that Colonel Muammar el-Qaddafi's apparent

decision to renounce weapons of mass destruction was largely

a result of the overthrow of Saddam Hussein, which thus

retroactively justifies the war in Iraq and holds out the

prospect of similar progress with other states that support

terrorists, seek weapons of mass destruction and brutalize

their own people.

However, by linking shifts in Libya's behavior to the Iraq

war, the president misrepresents the real lesson of the

Libyan case. This confusion undermines America's chances of

getting countries like Iran and Syria to follow Libya's lead.

The roots of the recent progress with Libya go back not to

the eve of the Iraq war, but to the Bush administration's

first year in office. Indeed, some credit should even be

given to the second Clinton administration.

Tired of international isolation and economic sanctions,

the Libyans decided in the late 1990's to seek normalized

relations with the United States, and held secret discussions

with Clinton administration officials to convey that message.

The Clinton White House made clear that no movement toward

better relations was possible until Libya met its

responsibilities stemming from the downing of Pan Am Flight

103 over Lockerbie, Scotland, in 1988.

These discussions, along with mediation by the Saudi

ambassador to the United States, Prince Bandar ibn Sultan,

produced a breakthrough: Libya turned over two intelligence

officers implicated in the Pan Am 103 attack to the

Netherlands for trial by a Scottish court, and in 1999

Washington acquiesced to the suspension of UN sanctions

against Libya.

Then, in the spring of 2001, when I was a member of the

State Department's policy planning staff, the Bush

administration picked up on those discussions and induced the

Libyans to meet their remaining Lockerbie obligations.

With our British colleagues, we presented the Libyans with

a ``script'' indicating what they needed to do and say to

satisfy our requirements on compensating the families of Pan

Am 103 victims and accepting responsibility for the actions

of the Libyan intelligence officers implicated in the case.

We also put an explicit quid pro quo on the table: If Libya

met the conditions we laid out, the United States and Britain

would allow UN sanctions to be lifted permanently. This

script became the basis for three-party negotiations to

resolve the Lockerbie issue.

By early 2003, after a Scottish appeals court upheld the

conviction of one of the Libyan intelligence officers, it was

evident that our approach would bear fruit. Indeed,

Washington allowed the UN sanctions against Libya to be

removed last summer after Libya reached a compensation

agreement with the Pan Am 103 families and accepted

responsibility for its officials' actions.

But during these two years of talks, American negotiators

consistently told the Libyans that resolving the Lockerbie

situation would lead to no more than elimination of UN

sanctions. To get out from under the separate U.S. sanctions,

Libya would have to address other concerns, particularly

regarding its programs in weapons of mass destruction.

This is the context in which Libyan officials approached

the United States and Britain last spring to discuss

dismantling Libya's, weapons program. The Iraq war, which had

not yet started, was not the driving force behind Libya's

move. Rather, Libya was willing to deal because of

credible diplomatic representations by the United States

over the years, which convinced the Libyans that doing so

was critical to achieving their strategic and domestic

goals.

Just as with Lockerbie, an explicit quid pro quo was

offered: American officials indicated that a verifiable

dismantling of Libya's weapons projects would lead to the

removal of American sanctions, perhaps by the end of this

year.

The lesson is incontrovertible: To persuade a rogue regime

to get out of the terrorism business and give up its weapons

of mass destruction, the United States must not only apply

pressure but also make clear the potential benefits of

cooperation.

Unfortunately, the Bush administration has refused to take

this approach with other rogue regimes, notably Iran and

Syria. Until the president is willing to employ carrots as

well as sticks, he will make little headway in changing

Iranian or Syrian behavior.

The President's lack of initiative on this point is

especially disappointing because, in the diplomatic aftermath

of the Sept. 11 attacks, the administration had a singular

opportunity to effect strategic realignments by both Iran and

Syria.

Well-placed Iranians, including more pragmatic elements of

Iran's conservative camp, have indicated through diplomatic

channels and to former officials (including myself) their

interest in a ``grand bargain'' with the United States.

Basically, Tehran would trade off its ties to terrorist

groups and pursuit of nuclear weapons for security

guarantees, a lifting of sanctions and normalized relations

with Washington.

Likewise, senior Syrian officials--including President

Bashar Assad himself, in a conversation in Damascus last

week--have told me that they want a better strategic

understanding with the United States. To achieve this,

however, Washington needs to be willing to spell out what

Syria would get in return for giving up its ties to

terrorists and its chemical weapons and ballistic missiles.

As Assad told me, Syria is ``a state, not a charity''--if it

gives up something, it must know what it will gain in return.

One reason the Bush administration was able to take a more

constructive course with Libya was that the White House,

uncharacteristically, sidelined the administration's

neoconservative wing--which strongly opposes any offer of

carrots to state sponsors of terrorism, even when carrots

could help end such problematic behavior--when crucial

decisions were made.

The initial approach on the Lockerbie case was approved by

an informal coalition made up of Condoleezza Rice, the

national security adviser, and Secretary of State Colin

Powell. Likewise, in the lead up to the negotiations

involving Libyan weapons of mass destruction, the

neoconservatives at the Pentagon and in the shop of Under

Secretary of State John Bolton were left out of the loop.

Perhaps a coalition among members of the State Department's

bureau of Near Eastern affairs and the National Security

Council's more pragmatic elements can chart a similar course

involving Iran and Syria.

However, until the Bush administration learns the real

lessons of the Libyan precedent, policy toward other rogue

regimes is likely to remain stuck in the mud of ideology.

Mr. Chairman, I move to strike the last word.

Mr. Chairman, this is one of the most important issues we are going to deal with. The question is whether or not organizations receiving taxpayer dollars paid for by every taxpayer in this country for secular purposes, nonreligious purposes, will be allowed to use those taxpayer dollars to discriminate against people based on their religion. There are arguments about what the history is or is not and the current status is or is not. They are on both sides of the case.

Let us deal with the merits. Why should people in this country who pay their taxes be told that they are not eligible because of their religion for a job which is paid for by their taxes? Of course, religions have a right to hire their own co-religionists in religious matters, but let us understand. If you are talking about the propagation of religion, a very important function, under the Constitution's establishment clause that cannot be done with public money. By definition you can only use public money for secular purposes. No one denies that.

The question then is, if you get the money for secular purposes, why should you be able to tell people that they cannot work for you if you do not like their religion? It is not just religion in the more formal sense. It is religion as the recipient defines it. If you believe that no one who believes in evolution can be a true Christian, then you will, under the law, without the Woolsey amendment, be allowed to deny people who believe in evolution the right to work in a soup kitchen.

If there were a nexus in the job, yes. If you were asking people to teach creationism, then you could ban people who believe in evolution, but a janitor, an architect, a contractor? The notion, by the way, that we have to do this to allow faith-based groups to work is unfair to faith-based groups. I do not think they need to be discriminatory.

We are not again talking about telling them they cannot hire people for religious purposes. What is it about people of another religion that is so distasteful that it is somehow wrong to ask people to associate with them? Are we saying that people cannot administer good works, that they have to associate with Jews if they are Christians, with Catholics if they are Baptist, with Muslims if they are Episcopalians? Of course, it is the case that in America what Martin Luther King said years ago is still true, the hour of worship is a pretty segregated one. Tell Orthodox Jews in Brooklyn that they may hire only their own and how many African Americans will be hired? Tell Mormons in Utah that they may only hire their own and how many Americans are hired? Tell the African Methodist Episcopal church or tell the Nation of Islam that they may hire only their own co- religionists, and how many white people or Hispanics get hired?

We need not empower discrimination. In fact, I have worked myself, as many others have, with the archdiocese of Boston, which has a wonderful housing program with combined Jewish philanthropy's housing program. The notion that religious charities cannot do their work unless they are allowed to discriminate against people not of their religion as they define it is factually wrong.

So that is the question here. I would have thought that the lesson of the last few years is that there is too much religious separatism, too much divisiveness, too much us against them in religion. Yes, let us encourage religious groups to be fully participant in good works, but let us not write into the law of the United States the principle that having simply to work with someone of another religion in entirely nonreligious matters, secular matters, is somehow so corrosive to your morale, so corrosive to your ability to function that you ought to be allowed to say to people, yes, pay taxes for this. We will take billions of dollars of tax money paid by everybody, and you Jews, you Christians, cannot apply.

Let me say, I was recently shown something that I am told comes from the Focus on the Family Web site, and if this is an error I will apologize. I hope I will be corrected. I hope it is an error. What I am told it said was, if this amendment passes, Christian charities interested in accepting Federal funds will be required to ignore religious conviction in hiring, even if potential employees practice Islam, Judaism, or no religion at all.

Yes, I think under the American Constitution and our principles, people who practice Islam, Judaism, or no religion at all ought not to be taxed and told that they are not eligible to do the work for which they are wholly qualified except that people do not like their particular religion. I hope the amendment passes.

Mr. Speaker, will the gentleman yield?

Mr. Speaker, I thank the gentleman for yielding. As the Member who has the honor of representing the district in which the Patriots play their home games, I very much appreciate, as I know the team does, the graciousness of the gentleman's remarks.

Mr. Speaker, I thank my colleague and friend from New Hampshire for his graciousness in yielding to me, and I yield myself such time as I may consume. I am glad to be along with him and many of our colleagues from New England cosponsoring this resolution congratulating the New England Patriots on their second Super Bowl title in 3 years.

I have said this before, Mr. Speaker. In the profession which we have chosen and are lucky enough to have had some success in, we sometimes find ourselves being blamed for things that are not our fault. But those occasions are offset by those times when we can bathe in entirely unearned glory.

The New England Patriots, as they now are, are an excellent team that did a superb job, well coached; they dealt with injuries, they held together, compiled a superb record. And those who represent New England in Congress get to stand up here and bathe in their glory. I am grateful to them for winning the championship and for the fact that we can do that.

I do not think politicians ought to insinuate ourselves into professional sports. It has been my experience that at professional sports events, the needed ones are the fans. So we are not trying to do that. What we are doing jointly is to pay our respects to a group of very dedicated, hardworking young men.

Let us be clear. To do what any professional football team does, particularly to do what the Patriots do, requires a degree of discipline and dedication and willingness to do hard physical work in very adverse weather conditions. They are very well coached. The ownership of the team deserves credit.

I will make just one political point. I am very proud to note that the stadium in which they won so many of their games and from which they went out to win the Super Bowl championship, in the town of Foxborough, Massachusetts that I represent, was not built with public money. This is an indication that there is no need to go to the taxpayers to get money to build public stadiums. There is an ability to do that when a team is well-run and well-managed and well-owned by private capital.

So I really want just again to say how proud the people, not just of the town of Foxborough or my district or northern Massachusetts are, but all over New England, as my colleague from New Hampshire makes clear, because as the team is the New England Patriots, we had to import somebody from New Hampshire, because Massachusetts is incapable at this point just technically of bipartisanship on our own. But I really appreciate the gentleman from New Hampshire's cooperation, and congratulations to the New England Patriots for doing an important thing so well.

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

Mr. Speaker, I am increasingly distressed by the trend of public policy at the federal level. For years people blamed federal deficits and increased federal spending on excesses in programs that seek to alleviate poverty and meet the needs of lower income people. Today, from the standpoint of those of us who care about social justice, we have the worst of both worlds--a steeply increasing deficit at the budget level while the percentage of national resources devoted to meeting the economic needs of the poorest of our citizens decreases.

I try to keep this issue constantly in focus, and I am greatly aided in doing so by one of the most dedicated fighters for social justice I have even met--Mark A. Sullivan, Jr., the Executive Director of Citizens for Citizens, an excellent community action program based in Fall River, Massachusetts, with responsibilities in much of the southeastern part of our state.

Mark Sullivan is a man of very considerable talent. His intelligence, commitment, and organizing skills could have led him to a number of lucrative careers. He has instead for the past thirty years stayed at his post in trying to fight poverty and economic deprivation.

Sadly, his job had been made much harder in recent years by the distorted budget priorities being followed by the current administration and Congressional majority. Too often people here vote for cuts as if they were dealing with abstractions without understanding the terrible human consequences of their efforts. No one I know does a better job of trying to make these impacts clear than Mark Sullivan, and in a recent excellent article in the Fall River Herald News, by Deborah Allard-Bernardi, Mr. Sullivan gives one of the expositions at which he excels about the negative effects of what we have been doing.

Because in my mind no issue is more important than reversing this trend of cutting back on the help we give to the neediest among us, I ask that this important discussion by Mark Sullivan in the Fall River Herald News be printed here.

[From the Herald News, Jan. 22, 2004]

CFC Decries Lack of Funding

(By Deborah Allard-Bernardi)

Fall River.--If society doesn't see the invisible man, it's

not looking for him, according to Mark A. Sullivan Jr.,

executive director of Citizens for Citizens Inc.

Actually, it's not just the invisible man Sullivan is

worried about, but an entire society of poor people including

the elderly, single women and children as well as men. He

says they . . . by the very entity that is charged with

caring for them: the government.

``Low-income people are off the radar screen,'' said

Sullivan at a press conference Wednesday. ``People in this

country are locked into being poor.''

It's been cuts after cuts for CFC and other agencies that

provide food, fuel assistance, housing, day care and other

core services to the needy. CFC's most recent plight is a new

unemployment formula that is threatening to close its Head

Start program before its usual summer hiatus.

The increased unemployment charges that CFC must pay to

stay in business as a nonprofit organization rose on Jan. 1

from $125,000 a year to $255,000 a year. Sullivan said

unemployment insurance rose from 4.9 percent for the first

$10,800 each employee makes to 8.2 percent for the first

$14,000.

Coupled with a $63,000 deficit to the Head Start program,

which Sullivan said CFC discovered about eight months into

the fiscal year, it's devastating news for the anti-poverty

organization.

``We'll have to shut down Head Start early,'' said

Sullivan.

He said unless there is some other solution, Head Start

will close in June, about two weeks early. The program serves

410 children in Greater Fall River and Taunton.

All 110 employees would be laid off. Sullivan said that

even this solution will adversely affect CFC because it will

have to pay higher rates when employees collect unemployment

benefits.

``We're being squeezed by every aspect of government,''

said Sullivan.

But Sullivan said he isn't surprised. After being employed

at CFC for 30 years, he said it gets worse every year.

There's a constant increase in need and a lack of funding.

The newest victims of poverty, according to Sullivan, are the

elderly and children.

Currently, 62 percent of Greater Fall River CFC clients

receiving fuel assistance are elderly. He said 34 percent of

those eligible for the program have already exhausted their

benefits, and it's only mid-January. CFC pays up to $490 per

family for heat during the winter season, which runs until

April.

Feeding the hungry has also gotten more difficult. With a

cupboard that is almost always bare shortly after being

filled, CFC handed out more than 4,000 bags of groceries

during the month of December.

``We're getting more and more people with less and less

money,'' said Sullivan. ``The tragedy of this is (most of)

our new clients are elderly.''

Sullivan condemned the way the government allocates funding

and what it views as important. He laughed at the phrase

``jobless recovery'' when it is used to describe an economy

that some say is getting better.

``How can you have a recovery when people have no jobs?''

asked Sullivan, who is passionate about helping the, needy

and angered by what he calls ``double talk'' and unfulfilled

promises by government officials.

``A budget is the reflection of the morality of a society.

It's getting kind of scary what we deem as important,'' said

Sullivan.

With a one-third cut in discretionary spending by the

federal government, Sullivan said that what is considered

discretionary is what funds core services that help the

poor and working poor stay warm and fed.

``Discretionary spending is what saves poor people from

being destitute,'' said Sullivan.

The losses and cuts in core poverty programs, along with

the increases in rent and prescription drugs, are just too

much for many families to handle, according to Sullivan, who

admits that he has no solution.

``The poor are falling in the cracks and they need a way

out,'' said Sullivan. ``I do wish people would start becoming

concerned.''

Sullivan has also seen a decline in charitable donations to

CFC and other nonproflt organizations. He said the middle

class is the societal section that has always donated the

most, but even it is feeling the pinch lately and giving

less, if at all.

``Those are the people who used to take care of the poor.

They're having a hard time taking care of themselves now,''

said Sullivan.

Mr. Speaker, because I am attending the important World Economic Conference in Davos, Switzerland, at which I intend to argue strongly for changes in international economic policy better to reflect the rights of working people and the importance of environmental protection, I am missing some votes in suspension. By their nature of course, bills scheduled this early in the session on the suspension calendar are entirely non-controversial so my inability to vote on some of them, while regrettable, was obviously irrelevant to the outcome. What my absence does mean is the lack of a chance to express my support for various of the principles affirmed in those resolutions, so I want to take this opportunity to express my agreement with their thrust. In particular, given the importance of Catholic schools in the district I am privileged to represent, I want to express my appreciation for the dedicated and effective work done by the educators in that school system whose commitment to young people is one of the great assets our society has. I am happy to be able to join my colleagues in expressing my gratitude to those dedicated men and women who devote themselves to the job of educating young people in an appropriate way.

Mr. Speaker, on December 8, I inserted into these pages an extraordinarily important article by Richard Haass, formerly the Director of Policy Planning at the State Department in the Bush administration. This article by Mr. Haass, which appeared in the November 23 Washington Post, has received far too little attention. In it, this very high ranking State Department official under the presidency of George Bush acknowledged what many of us have been arguing in the face of the administration's efforts to prove the contrary; namely, that the war in Iraq was motivated not by a fear of weapons of mass destruction or of the need to combat terrorism, but rather as a conscious policy choice in service of the administration's view of the world. As Mr. Haass himself argued in the central point of his essay, Iraq was a war of choice and not of necessity. Obviously if it had been occasioned by the likelihood of Saddam Hussein using weapons of mass destruction or of his furthering the efforts of al Qaeda, it would have fallen into the war of necessity category.

While I was disappointed that more attention had not been paid to this, I was not surprised to see in the December 8 Washington Post a very thoughtful article by Lawrence J. Korb underlining exactly how significant Mr. Haass's article was. Lawrence J. Korb who served as an Assistant Secretary of Defense under President Reagan has been for years one of the most thoughtful critics of national security excesses, and a strong articulator of rational foreign policy.

As Mr. Korb explicitly notes, what Richard Haass says in explaining the war in Iraq is directly contrary to the rationale given by the President, the Secretary of Defense and other high administration officials. It is, as Mr. Korb notes, unfortunate that Mr. Haass ``was unwilling to go public with his views as did General Eric Shineski, while he could have made a difference.'' But while I join Mr. Korb in that regret, I do want to express admiration for Mr. Haass for speaking out now. Obviously he is aware of how much what he writes contradicts the official rationale for this war given by the Bush administration, and in this case the adage better late than never is relevant.

Because Lawrence J. Korb so clearly emphasizes the importance of Richard Haass's original article and because this is a significant debate that is getting too little attention from the American public, I ask that Lawrence J. Korb's article be printed here.

A War of Choice or of Necessity?

(By Lawrence J. Korb)

Eight months after the Bush administration got us involved

in a bloody war in Iraq, we are now told by one of Secretary

of State Colin L. Powell's closest advisers that Iraq was a

war of choice after all. According to Richard Haass, director

of policy planning at the State Department until June 2003

and still the Bush administration's special envoy to Northern

Ireland, the administration ``did not have to go to war

against Iraq, certainly not when we did. There were other

options'' [op-ed, Nov. 23]. Really?

This is not what the administration told us before the war

and continues to tell us to this day. On March 20, as he was

sending troops into Iraq because the regime of Saddam Hussein

allegedly possessed weapons of mass destruction and had ties

to al Qaeda, Secretary of Defense Donald H. Rumsfeld told

them, ``We are at the point at which the risk of not acting

is too great to wait longer. As you prepare, know that this

war is necessary . . .'' Some three weeks into the war,

Powell, who had made the case for war to the United Nations,

stated: ``We do not seek war. We do not look for war. We

don't want wars. But we will not be afraid to fight when

these wars are necessary to protect the American people, to

protect our interests, to protect friends.''

Even after it had become abundantly clear that the

arguments the Bush administration advanced for going to war

were specious, both Vice President Cheney and Deputy

Secretary of Defense Paul D. Wolfowitz explicitly rebutted

Haass's position. In an Oct. 10 speech to the Heritage

Foundation in which he lashed out at those who said we had a

choice about invading Iraq, the vice president said: ``Some

claim we should not have acted because the threat from Saddam

Hussein was not imminent. Since when have terrorists and

tyrants announced their intentions, policy putting us on

notice before they strike? On Nov. 4 Wolfowitz stated: ``But

one of the things that Sept. 11 changed was that it made it a

war of necessity, not a war of choice.''

The president himself continues to proclaim how necessary

the war was. On Nov. 22 he said at a press conference in

London, ``Our mission in Iraq is noble and it is necessary.

On Thanksgiving Day the president told the troops in

Baghdad: ``You are defeating the terrorists here in Iraq so

we don't have to face them in our own country.''

Even more surprising is Haass's contention that despite its

public pronouncements, the Bush administration knows that,

because this is a war of choice, Americans will not support

it unless it is relatively short and cheap. This is why the

administration has changed its policy and accelerated the

timetable to hand over increasing political responsibility to

Iraqis, even if it means reducing what it is trying to

accomplish.

Haass weakens his own case by arguing that the first

Persian Gulf War was a real war of necessity and Vietnam was

only a war of choice. Even those who argued against the

recent invasion of Iraq would not contend that it was less

necessary than the first Persian Gulf War. As Secretary of

State James Baker noted in 1990, that war was really about

oil. And Powell, then chairman of the Joint Chiefs of Staff,

as well as such defense hawks as Sen. Sam Nunn (D-Ga.),

wanted to give sanctions more time to work before invading

Iraq. (If it was so necessary, why did the administration of

the elder Bush not invade until it got other nations to fund

the war?)

It is equally absurd to argue that the first Gulf War was

more necessary than Vietnam. In the mid-1960s many Americans,

including most of us who were in the armed forces, believed

that if South Vietnam fell to the Communists all of Southeast

Asia would soon follow and the containment policy would be

undermined. This is why the American people supported that

conflict through the Tet offensive of 1968, even though more

than 30,000 Americans had died by then.

Ironically, while Haass is wrong about Vietnam and the

first Gulf War, he is right about Iraq. It is a war of

choice--a bad choice as it turns out. Unfortunately, he was

unwilling to go public with his views, as did Gen. Eric

Shinseki, while he could have made a difference. This article

should have been written nine months ago when Congress and

the American people had a choice. Now our only real choice is

to continue to stay and absorb the casualties and the cost.

Mr. Speaker, no situation in the world is more deeply troubling to me and many others than the ongoing conflict involving Israel and the Palestinians. I speak as a strong supporter of Israel and of the moral importance of its continuing to exist as a free, independent, secure nation. Sadly, from the moment Israel's creation was announced--in accord with a U.N. resolution--in 1948, the unremitting hostility of its Arab neighbors plunged that small nation into war. The years since have been marked by a continuation of that hostility in many parts of the Arab world, with consequent violence and with large numbers of people's lives being lost, but also some progress in achieving peace. Most notably, the government of Menachem Begin signed an important peace treaty with Egypt in 1978 which, despite the skepticism of many Israelis and some of Israel's strongest supporters in America, has in fact worked enormously for the benefit of Israel by providing a peaceful situation for much of its borders. This 1978 agreement was one in which Israel gave up a large amount of territory which it had gained in a defensive war, territory which had both important strategic value and from which Israeli settlers were moved as part of the agreement. This has obvious relevance as a precedent for an agreement to end the current conflict.

In addition to this peace agreement with Egypt, Israel has over the years worked out arrangements with its neighbor to the east, the Kingdom of Jordan, which has similarly been beneficial compared to the strife that had previously existed in that area.

The central remaining question is of course whether or not an agreement can be reached between Israel and the Palestinians which will preserve Israel's security while allowing it to maintain its important political and moral role as a free, Jewish, democratic state. I know there are people who argue that it is inappropriate for Israel to be a Jewish state. Such arguments seem to me quite hollow, particularly when they come from those who have no quarrel with the existence of a number of officially Islamic states throughout the Middle

East. I strongly oppose theocracy but I do not think there is anything wrong with a particular democratic society including an official religion as long as it does so in a way that protects the rights of those in the society who do not follow that religion. Israel comes far closer to that goal than any of its neighbors, and criticism of Israel on that score therefore seems particularly hypocritical and motivated more by opposition to the existence of the state than to any commitment to principle.

In fact, the importance of Israel remaining both Jewish and democratic is one key reason why a settlement of the conflict with the Palestinians is so important to me and many other strong supporters of Israel. As Prime Minister Sharon himself has noted, it is difficult to see how Israel can remain both democratic and Jewish if it continues to control all of the West Bank and Gaza Strip, with the large number of Palestinian inhabitants there. Combined with the Palestinians who live within Israel, the number of non-Jewish citizens--indeed of many citizens hostile to the existence of a Jewish state--means that conducting democratic politics and maintaining the state's Jewish character are at odds. For this and other reasons, an agreement between Israel and the Palestinians is greatly to be desired.

It is in this context that I join in welcoming the efforts of those on both the Israeli and Palestinian side who have recently demonstrated what an achievable Israeli-Palestinian peace can look like. Recently, in Geneva, a ceremony was held in which leading Israeli and Palestinian citizens signed onto their version of a comprehensive peace plan which provides both for a Palestinian state, and a State of Israel, with both having the viability necessary to exist as independent nations, and in a way that minimizes the likelihood of ongoing violence between them. This initiative, led by Yossi Beilin and Yasser Abed Rabbo, reflects a great deal of serious thought by people who have been deeply involved in trying to reach peace, and demonstrates that a true peace agreement is in fact achievable in ways that meet the needs of those in both Israel and the Palestinian areas who genuinely desire peace. In addition, a recent proposal outlined by Ami Ayalon and Sari Nusseibeh is less detailed but points in a similar direction.

Mr. Speaker, I understand and there is both in Israel and in some Palestinian circles a great deal of unhappiness that these four men and others joining with them have engaged in these activities. I think the criticisms are unwarranted and in fact counterproductive. Denigrating these efforts does not seem to me to be consistent with a professed desire to reach the peace settlement between Israel and the Palestinians that is so manifestly in the interests of all parties in the area.

On Friday, December 5, the distinguished newspaper The Forward, which has long been an important voice within America's Jewish Community, carried an editorial entitled The Truths of Geneva. Noting that ``the Geneva initiative does not represent anything like the threat to Israel's safety that its opponents suggest,'' the editorial goes on to note that ``by relying on respected, mainstream public figures from both sides to do the phrasing and map-making--including several of Israel's most trusted ex-generals and intelligence chiefs--they showed that a peace agreement could be reached that would satisfy the essential needs of both sides, if the leaders so chose.'' As the editorial went on to note, the Geneva initiative ``shows that there is a way out of Israel's deadly mess . . . it shows, in rough terms, what such a formula might look like.''

Mr. Speaker, I ask that this editorial from a source that has long been one of Israel's most thoughtful and ardent defenders be printed here, as part of the effort of many of us to express our appreciation to those who have undertaken this difficult effort to demonstrate how peace can be achieved and to pledge our continuing support for their efforts.

[From the Forward, Dec. 5, 2003]

The Truths of Geneva

For all its theatrics, its celebrity cast and high-concept

special effects, the ``launch'' this week in Switzerland of

the so-called Geneva Understandings did not usher in a new

era in Israeli-Palestinian relations. The document's authors

and architects did not have the power to do anything of the

sort. Private citizens all, they could hug and sing and

display a document they had written together, but they could

not make peace between the two warring nations. Only

governments can do that.

For that same reason, the Geneva initiative does not

represent anything like the threat to Israeli's safety that

its opponents suggest in their more overheated flights of

rhetoric. The Geneva authors did not give anything away,

because they had nothing to give away. All they did--all they

could do--was to bring together groups of citizens from the

two embattled communities and discuss ways the sides might

settle their differences, if their leaders so chose. By

relying on respected, mainstream public figures from both

sides to do the phrasing and map making--including several of

Israel's most trusted ex-generals and intelligence chiefs--

they showed that a peace agreement could be reached that

would satisfy the essential needs of both sides, if the

leaders so chose. But they did not produce the peace

agreement. Only governments can negotiate peace.

All the incendiary rubbish aside, there was nothing

fraudulent going on at Geneva. The negotiators were not

purporting to speak for the Israeli government any more than

Tovah Feldshuh purports to be Golda Meir in her nightly

appearances on Broadway. It's all play-acting, meant to draw

an audience and, perhaps, make a point.

And yet, this play's message must carry a real sting,

judging by the desperation of its opponents to find

something, anything, wrong with it. Consider their arguments:

First, the document should be ignored because it is

meaningless and toothless. Second, it should be fought

because it endangers Israel by somehow handing over valuable

assets. Third, the Israeli authors let themselves be duped by

Palestinian extremists who will never be satisfied even by

the sweeping Geneva concessions. Fourth, the authors undercut

the Sharon government's negotiating position by raising

Palestinian expectations, thus reducing the likelihood that

they will somehow accept the far more limited concessions

Sharon is contemplating as part of his own plan for

extricating Israel from its deadly mess.

That, in the end, is the Geneva initiative's real threat,

and its only threat. It shows that there is a way out of

Israel's deadly mess. It shows that there is a broad formula

that could resolve the century-old dispute on terms both

sides could live with. It shows, in rough terms, what such a

formula might look like. By forcing itself into the spotlight

and exciting public debate, it shows that there is a critical

mass on both sides that could, with some effort, accept such

a deal. And it shows who is against reaching such a deal and

would rather keep fighting.

Those are the truths of Geneva, and they are real ones. But

they need not leave Israel isolated. Israel's friends could

and should embrace the initiative--not for its details but

for its vision--and encourage Israel's prime minister to do

the same. He could, if he wanted, praise the initiative as a

contribution to public discussion, details aside. He could

point to the violent opposition of Palestinian hard-liners,

who denounce the document for its betrayal of their ``right

of return,'' as evidence of the uphill climb still ahead. And

he could vow to begin that climb, so Israelis can know that

their leaders genuinely want to end their long nightmare.

Mr. Speaker, one of the most important debates now being carried on in the United States has to do with the reasons for our war in Iraq. The administration and its defenders have argued that we had to go to war as a matter of self-defense. In varying combinations, the administration has argued that Iraq was deeply involved with al Qaeda and that the Iraqi war to a great extent was a logical next step after the war in Afghanistan, and also that Iraq possessed weapons of mass destruction that were ready to be used against us. In short, they argued that this was a war of necessity.

Many of us believe to the contrary that the linkage between Iraq and al Qaeda was slight, and that the weapons of mass destruction argument had been grossly exaggerated. Of course evidence since America's military victory have strengthened greatly the case of those of us who were skeptical on both counts.

But the debate continues to be an important one. I was therefore struck by the article in the November 23 Washington Post by Richard Haass. Mr. Haass who is now the President of the Council on Foreign Relations was a very high ranking national security official of the Bush administration from its early months in office until June of this year--after the major military activity in the war against Iraq. While he does not explicitly rebut the Bush administration's case for the war, his article is in fact a strong argument against it.

Talking of the distinction between wars of necessity--which is how the administration has characterized the war in Iraq--and wars of choice, in which countries use war as a means of policy, Mr. Haass, the Director of the State Department's policy planning team while the war was being planned and carried out, clearly asserts that Iraq was an example of the latter.

As he notes, ``the debate can and will go on as to whether attacking Iraq was a wise decision, but at its core it was a war of choice. We

did not have to go to war against Iraq, certainly not when we did. There were other options; to rely on other policy tools, to delay attacking, or both. Iraq was thus fundamentally different from World War II or Korea or even the Persian Gulf War, all of which qualify as wars of necessity.'' Mr. Speaker, the significance of this analysis from a man who occupied so high a post in the Bush administration is great, and because of that, I ask that Mr. Haass's very thoughtful article be printed here.

[From the Washington Post, Nov. 23, 2003]

Wars of Choice

(By Richard N. Haass)

Any number of lessons can be learned from the handling of

the aftermath of the war in Iraq, but none is more basic than

this: Democracies, in particular American democracy, do not

mix well with empire.

Empire is about control--the center over the periphery.

Successful empire demands both an ability and a willingness

to exert and maintain control. On occasion this requires an

ability and a willingness to go to war, not just on behalf of

vital national interests but on behalf of imperial concerns,

which is another way of saying on behalf of lesser interests

and preferences.

Iraq was such a war. The debate can and will go on as to

whether attacking Iraq was a wise decision; but at its core

it was a war of choice. We did not have to go to war against

Iraq, certainly not when we did. There were other options: to

rely on other policy tools, to delay attacking, or both.

Iraq was thus fundamentally different from World War II or

Korea or even the Persian Gulf War, all of which qualify as

wars of necessity. So, too, does the open-ended war against

al Qaeda. What distinguishes wars of necessity is the

requirement to respond to the use of military force by an

aggressor and the fact that no option other than military

force exists to reverse what has been done. In such

circumstances, a consensus often materializes throughout the

country that there is no alternative to fighting, a consensus

that translates into a willingness to devote whatever it

takes to prevail, regardless of the financial or human costs

to ourselves.

Wars of choice, however, are fundamentally different. They

are normally undertaken for reasons that do not involve

obvious self-defense of the United States or an ally. Policy

options other than military action exist; there is no

domestic political consensus as to the correctness of the

decision to use force. Vietnam was such a war, as was the war

waged by the Clinton administration against Serbia over

Kosovo.

Wars of choice vary in their cost and duration. Vietnam was

long (lasting a decade and a half from the American

perspective) and costly in terms of both blood (more than

58,000 lives) and treasure (hundreds of billions of dollars).

By contrast, Kosovo took all of 78 days, claimed no American

lives in combat and cost less than $3 billion.

What these experiences suggest is that the American people

are prepared to wage wars of choice, so long as they prove to

be relatively cheap and short. But the United States is not

geared to sustain costly wars of choice.

We are seeing just this with Iraq. The American people are

growing increasingly restless, and it is not hard to see why.

We have been at war now in Iraq for some eight months. More

than 400 Americans have lost their lives. Costs are in the

range of $100 billion and mounting.

The Bush administration knows all this; hence the

accelerated timetable to hand over increasing political

responsibility for Iraq to Iraqis. Such a midcourse

correction in U.S. policy reflects in part the political

realities of Iraq, where enthusiasm for prolonged American

occupation is understandably restrained; even more, though,

the policy shift reflects political realities here at home.

Domestic tolerance for costs--disrupted and lost lives above

all--is not unlimited. As a result, the president is wise to

reduce the scale of what we try to accomplish. Making Iraq

``good enough''--a functioning and fairly open society and

economy if not quite a textbook model of democracy--is plenty

ambitious.

None of this is meant to be an argument against all wars of

choice. There may be good and sound reasons for going to war

even if we do not have to, strictly speaking. Such reasons

can range from protecting a defenseless population against

ethnic cleansing or genocide to preventing the emergence of a

threat that has the potential to cause damage on a large

scale.

But wars of choice require special handling.

First, it is essential to line up domestic support.

Congress and the American people need to be on board, not

just in some formal legal way but also to the extent of being

psychologically prepared for the possible costs. Better to

warn of costs that never materialize than to be surprised by

those that do.

Second, it is equally essential to line up international

support. The United States needs partners: to facilitate the

effort of fighting the war, to share the financial and human

costs of war and its aftermath, to stand with us

diplomatically should the going get tough. We possess the

world's most powerful military and economy, but the United

States is not immune from the consequences of being stretched

too thin or going deeply into debt.

Third, no one should ever underestimate the potential costs

of military action; no one should ever assume that a war of

choice, or any war, will prove quick or easy. Here as

elsewhere the great Prussian military theorist Carl von

Clausewitz had it right: ``There is no human affair which

stands so constantly and so generally in close connection

with chance as war.''

Mr. Speaker, I am glad to yield 2\1/2\ minutes to the gentlewoman from Oregon (Ms. Hooley), a member of this committee who really did extraordinarily good work here and who early on became our task force head on identity theft, and this bill is really path-breaking in what it does for identity theft.

Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from Vermont (Mr. Sanders), the ranking member of the subcommittee from which this bill came.

Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Pennsylvania (Mr. Kanjorski), who is the second ranking member of the full committee and the ranking member of the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises and who has a major input to this bill.

(Mr. KANJORSKI asked and was given permission to revise and extend his remarks, and include extraneous material.)

Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Illinois (Mr. Emanuel), who was very active particularly with regard to the medical privacy provision of this bill.

Mr. Speaker, I yield 2 minutes to the gentlewoman from Indiana (Ms. Carson), one of our most active and energetic members of our committee.

Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from New York (Mr. Crowley), another member of our committee who played a very active role in this.

Mr. Speaker, I yield 1\1/2\ minutes to the gentlewoman from New York (Mrs. Maloney), who played an important role in this bill.

(Mrs. MALONEY asked and was given permission to revise and extend her remarks.)

Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Texas (Mr. Hinojosa), another active member of our committee.

Mr. Speaker, I have several.

Mr. Speaker, I yield 1\1/4\ minutes to the gentleman from Massachusetts (Mr. Markey), who has been so active on the privacy issue.

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

Mr. Speaker, I want to begin by saying that if we on the Democratic side were in the majority, this would be a different bill. We are not, so we have the bill that we have here.

Given that, given that there are some differences, I must tell you that this is a better bill than I had hoped we would see. And I am very appreciative of my colleagues on the other side. They did not give in on any issues of principle that are important to them. We have on both sides of the aisle a strong commitment to making sure that the free- market system in this country can work.

These credit allocations have become a very important part of that free-mark system. And this bill, I believe, preserves that system, the credit allocation system for individuals as well as need be.

We also, though, have, as we often do with the free market, a situation where the market does well what it is supposed to do, but it does not do everything. There are areas where we need to step in and help the market. What is important is for us to do that in ways that do not impinge on the market function.

I believe that working together we have come closer in doing that in this bill than I had thought. I would like if there had been fewer preemptions in the field, for instance, of identity theft; but as a result of a meeting which we had this morning, I think we agreed to preserve the integrity of the identity theft provisions that we have in there, to make sure that they can function without interference and without distraction, but did not unduly preempt if the States want to be additive in other areas. So there is, in fact, room for States to do something as long as the scheme that has been set forward in this bill is not interfered with, detracted from, and in particular, companies are not subjected to conflicting or confusing multiple requirements.

We have done other things. People, as a result of this, will be able to get a lot more information. Until recently, credit and credit scoring have been kind of mystical things to a lot of people. Consumers, home buyers, automobile buyers, others have found their lives affected financially by factors of which they were only dimly aware. As a result of several provisions in this bill, the system will be allowed to work, but consumers will have a lot more information about it. And they will get that information in many cases early enough to act on it.

Frankly, one of the things that some of our friends in the business community were skeptical of I think will wind up helping them. A requirement that people be notified if something they have either done or failed to do will cause them to have a negative comment on the credit report, I think that will have an incentivizing effect. I think the first time someone is late unneccessarily with a payment for a mortgage and is notified that this will

be on your credit report, you are likely to see much less lateness. We also took steps to improve the accuracy of the data.

The system on the whole works very well, but no system works perfectly. I think this credit system was a little bit flawed in that it did not adequately give people a chance to correct errors. We do a much better job of this. I would have liked there to have been a sunset on the preemptions.

I think this bill benefits from the fact that it was here today. Congress did this 7 years ago. There was a sunset. And as a result, we are here today doing what everybody agrees is improving the bill. I would have liked, and my colleague from Pennsylvania (Mr. Kanjorski) offered an amendment to give us a chance to do that again. We lost on the floor, and that is the way the votes went. But I do hope and I believe that we may very well from experience learn that more has to be done or things have to be done differently.

When this bill was passed in 1996, identity theft was not a big issue. The fact that it was sunsetted gave us a chance to deal with identity theft I think in a very effective way. This will not be the last time that the crooked people in this world will think of a way to swindle the great majority of the honest ones.

So I just want to make it clear that while we will not have this automatically coming up, I hope we are all committed, and I believe we are, that as new problems come up we will be able to deal with them.

Given the fact that the majority is the majority, I believe that we did a good job, not a perfect one, in adding consumer protections and safety factors to this general system of allowing the credit allocation to individuals to work, and for that reason, I would urge Members to vote for the bill.