Mr. Chairman, as Vice Chair of the Joint Economic Committee, I am pleased to speak in the time reserved by the Budget Act for a discussion of economic goals and policies that is traditionally led by members of this committee. Mr. Chairman,…
Mr. Chairman, as Vice Chair of the Joint Economic Committee, I am pleased to speak in the time reserved by the Budget Act for a discussion of economic goals and policies that is traditionally led by members of this committee.
Mr. Chairman, we have a responsibility to chart a more sensible course for economic policy than has been pursued over the past 6 years, and this budget starts us down that path.
The President says his policies are working to make the economy strong, and that all Americans are benefiting. But evidence of a slowing economy is building, and an anxiety over the state of the economy remains high. The meltdown in the subprime mortgage market is also adding to worries about the overall health of the economy.
American families are optimistic by nature, but they are understandably worried about the future, because the economy is weakening, even before many have shared in the gains from the economic growth we have seen so far.
Despite 5 years of economic expansion, most American families have struggled just to hold their economic ground on President Bush's watch. Job growth has been modest. Wages are barely keeping pace with inflation. Real incomes have fallen, household debt is rising, employer-provided health insurance coverage is declining, and private pensions are in jeopardy.
These are the economic barometers that matter most to America's families. Having a job is the key indicator of economic well-being for the vast majority of Americans. The President likes to talk about these 7.5 million jobs created since August of 2003, but he neglects to mention the fact that more than a third of those jobs were necessary just to replace the ones that were destroyed between 2001 and 2003.
Most Americans depend on their earnings to support themselves and their families. But unfortunately, workers' pay has lagged far beyond productivity, and wage growth has been weaker and more unequal than in the late 1990s. Strong productivity growth has translated into higher profits for businesses. Corporate profits are at an all-time high as a share of GDP, but not more take-home pay for the average worker.
Focusing on usual weekly earnings of full-time workers, we see only modest gains concentrated in the upper half of the distribution from 2000 to 2006. As we see in this chart, the red bars show the unequal gains during the Bush administration, and the blue bars show the Clinton years when earnings grew for everyone across our country.
The divergence between the haves and the have-nots in the Bush administration economy stands in marked contrast to the last 4 or 5 years of the Clinton administration when real wage gains were strong up and down the wage ladder as productivity growth first accelerated.
These earnings figures do not reflect bonuses of highly paid executives or capital gains and other nonwage income earned at the very top of the income distribution. This picture likely understates the disparities. The people experiencing the largest income gains are executives and highly compensated individuals, while ordinary American workers are only just beginning to see some gains in their paychecks after inflation.
Workers' pay and benefits, the red line, have grown only half as much as productivity; the blue line over the last 6 years. Typically, real compensation of workers, their wages and benefits, tend to track productivity growth as
they did in the late 1990s. But that has not happened since the 2001 recession. Productivity growth has been strong, but real inflation- adjusted compensation growth has been weak.
The compensation growth we have seen came much more from benefits than from wages, but not because employers suddenly became more generous. Benefit costs have been increasing because health insurance costs are rising and employers have had to make contributions to restore the solvency of their pension plans.
Higher benefit costs have squeezed take-home pay, but workers have not been getting more generous benefits in return. Slow job growth and stagnant wages during much of the Bush administration have depressed families' incomes. Median household income in 2005 was nearly $1,300 lower than in 2000, a loss of 2.7 percent during the President's first 5 years in office. Clearly, many American families have a lot of lost ground to make up.
Those who are already well-to-do are doing very well in this Bush economy, but the typical American family is struggling to make ends meet in the face of high costs for energy, health care and a college education for their children.
College tuition is up 44 percent, health insurance premiums are up 87 percent, and the price of gasoline was only a $1.45 per gallon when the President took office.
Somehow, the President's tax cuts were supposed to make up for all of this. But the lion's share of the tax cuts went to the people at the very top, especially the top 1 percent of earners.
The legacy of the President's tax cuts has been to run up massive deficits and debt that leave us unprepared to deal with the budget challenges posed by the retirement of the baby boom generation, and that weakens the future standard of living of our children and grandchildren.
This administration has presided over a stunning reversal of fortune. The $5.6 trillion, 10-year budget surplus that they inherited turned into a deficit over those same 10 years of at least $2.3 trillion.
The administration has incurred the three largest budget deficits on record, including a $413 billion deficit in 2004. The deficit may be retreating, as it usually does in a business cycle recovery, but each year's deficit still stands in marked contrast to the projected surpluses when the President took office.
The gross Federal debt is now almost $9 trillion, or more than $29,000 per person. That is how much every man, woman and child in America owes to this debt. This is the fiscal mess that we have to clean up. Thanks to the President's policies, we are now a Nation of debtors, relying on the rest of the world to finance our budget deficits and excessive spending.
Our current account deficit, which is the broadest measure of our trade deficit with the rest of the world, rose to a record-smashing $856 billion in 2006, from $791 billion in 2005.
This administration keeps giving us records, but they are the wrong kind of records. Record deficits, record debts, and record amounts of money owed by each American citizen. The amount of Federal debt owed by foreigners has more than doubled under President Bush, rising to $2.2 trillion, with Japan and China alone holding $1 trillion of our debt.
Recent stock market volatility underscores just how vulnerable the U.S. economy has become to the decisions being made in other countries. When China sneezes, a half a world away, the U.S. economy catches a cold.
Our future prosperity depends on increasing our normal saving and making wise investments. It depends on being ready for the retirement of the baby boom generation and the pressure we know that that will put on our budget.
The challenge for this Congress is to return to the fiscal discipline that has been squandered by the President and Congress over the past 6 years, and that is what this Democratic budget proposal does.
Mr. Chairman, I reserve the balance of my time.
Mr. Chairman, I yield myself such time as I may consume.
First of all, Mr. Chairman, I just want to remind my dear friend on the other side of the aisle that the Bush administration has given this country several records, only they are the wrong kind of records: $9 trillion in debt, the largest debt this country has ever carried; $859 billion trade deficit, the current account deficit, the largest trade deficit in the history of this country. And out of that $9 trillion, each of us in this room and each person across America owes $29,000. That is their portion of the debt that we owe.
Once again, we have heard about job creation. As I have said earlier, a third of the jobs created since 2003 were necessary just to make up for earlier job losses. Under President Clinton, the economy created 237,000 jobs per month, and this administration has created well less than 100,000 jobs per month.
Mr. Chairman, I reserve the balance of my time.
First of all, Mr. Chairman, I find it rather ironic that my good friends on the other side of the aisle are lecturing us on fiscal responsibility. After all, let us remember that the $5.6 trillion 10-year budget surplus that Mr. Bush and the Republican majority at that time inherited turned into a deficit over those same 10 years of at least $2.3 trillion. Numbers do not lie, Mr. Chairman. They turned a $5.6 trillion surplus into a $2.3 trillion deficit. And they are preaching fiscal responsibility.
The administration has incurred the three largest budget deficits on record, including a $413 billion deficit in 2004. And let's remember that the Bush administration not only lost 3 million manufacturing jobs since they took office, but we now have almost a $9 trillion debt, and that breaks down to all of us in America owing, our own individual share, $29,000. Now, that is what they have given the American people.
On top of that they gave us another record, another horrible record. The highest trade deficit in the history of our country, $857 billion. So they give us the record debt, the record trade deficit, and the record budget deficit in the history of this country, and they are talking fiscal responsibility. And then on top of it they turn the surplus into a $2.3 trillion deficit.
Believe me, I am so glad that for the future of America we have a Democratic budget before us today.
Mr. Chairman, I yield 5 minutes to my colleague from the great State of Washington, Congressman McDermott.
Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, the American people voted for change, and this Democratic leadership has given them change, not only in the direction in Iraq but the direction in our budget.
I repeat, it is unbelievable. I am mystified that the Republican colleagues on the other side of the aisle are talking fiscal discipline. Let us remember, they are the ones that gave us the largest debt in history, $9 trillion, the largest trade deficit, over $859 billion, and they turned the $5.6 trillion 10-year budget surplus into a $2.3 trillion deficit. That is what they gave this country.
Within the first 100 hours of this Congress, the new Democratic leadership instituted pay-as-you-go budgeting requiring that new spending be offset. In other words, we are not spending money we don't have. We are not going to grow that deficit. Adhering to this policy helped turn deficits into surpluses in the 1990s during the Clinton administration but was abandoned by the Bush administration and the Republican-controlled Congress. That is what led us to these huge debts and deficits.
Today, Democrats in Congress present a realistic budget plan that adheres to PAYGO principles for controlling the deficit and bringing revenues into line with the amount we need to spend to defend the country and take care of the needs of our citizens.
Our budget provides health care for millions of additional uninsured children. We make investments in veterans health care and benefits. We restore critical funding for first responders and State and local law enforcement.
In order to spur innovation that will keep America number one in the world, we provide increased funding for the National Science Foundation, increase investments in math and science and education, and make college more affordable for our young people, investing in the future of our country.
We also expand renewable energy and energy efficiency to reduce global warming and dependence on foreign oil.
Democrats target tax relief to those who need it most. Our plan protects 19 million middle-American families from a tax increase by setting up a reserve fund for a long-term fix for the alternative minimum tax, which is snagging millions more families each year in its widening net. We pay for these tax cuts in part by eliminating tax loopholes and closing the tax gap to make sure that middle-class families don't have to pay the tab for tax cheats.
Mr. Chairman, this budget resolution is an important step toward putting our fiscal house back in order and creating greater economic opportunities and prosperity for all American families.
Mr. Chairman, I yield back the balance of my time, and I move that the Committee do now rise.