EXECUTIVE SESSION -- (Senate - June 28, 2006)
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Mr. DURBIN. Mr. President, I thank my colleague from Rhode Island. Senator JACK REED is our voice on the Joint Economic Committee. It is a committee that takes a look at the overall economy and reports to our caucus regularly. Senator Reed has brought us economic indicators from time to time that give us at least some insight as to how we are doing in most general terms in America.
Everybody measures the economy by their own lives, their own family, maybe their own town, but when it comes to the appointment of a Secretary of the Treasury, we take a step back and look at the overall economy in America.
A good Secretary of the Treasury can make a big difference. When Bob Rubin became Secretary of the Treasury under President Bill Clinton, he faced enormous challenges with huge deficits as far as the eye could see and an economy moving ever so slowly. He put in place those policies on an economic, fiscal, and monetary basis that made a big difference.
Our Nation went from a deficit in our budget to a surplus. We actually put the indebtedness behind us for the first time in decades. The good news is we did it while the wealth of America was expanding dramatically. That period during the Clinton years saw people with their own savings accounts growing, more pension plans expanding, folks buying homes and starting businesses. It was a time of great economic expansion.
No one person deserves the credit or the blame for our economy, but Secretary of the Treasury Bob Rubin was the right person at the right time to speak sense to the President about what needed to be done to make America strong for years to come. I have the same confidence that Henry Paulson is going to do that as well, and we need him now more than ever.
I come to this with some prejudice because Mr. Paulson is a son of Illinois. He still calls Illinois his home. He spent his adult years--at least recently--commuting back and forth between Illinois and New York and places around the world in his capacity as an investment banker.
We had a terrific meeting in my office a week or two ago and talked about his life in Illinois, the experiences he had, about his family, and his commitment to our State. I readily concede I come to this nomination with some bias. But I think Mr. Henry Paulson is the right man for the job of Secretary of the Treasury at this moment in history.
He came up through the ranks of Goldman Sachs, starting in their Chicago office many years ago and eventually becoming the CEO of that important investment bank. I don't think a person can rise to that high level without understanding how business works and how the economy works. Since even a corner grocer knows that an organization cannot run up endless debt forever without paying a stiff price, I think Mr. Paulson understands that as well. I think his business experience may help to start balancing the books in the Washington, DC, situation, which has been far from balanced for a long time. It is not a moment too soon for someone with Mr. Paulson's business background to tackle this challenge.
Consider these realities Mr. Paulson will face when he becomes Secretary of the Treasury:
This Bush-Cheney administration has accumulated more foreign-held debt in the past 6 years they have been in office than all of the 42 Presidents before President George W. Bush. In other words, our indebtedness to foreign governments, such as Japan, China, Korea, and the OPEC nations, that, in fact, bankroll the debt of America, hold America's mortgage, has grown in dramatic terms over the last 6 years.
That is not the policy President Bush inherited from the Clinton administration, which was generating a surplus. It is an approach he has taken which, sadly, has left us deeply in debt. The Bush administration came to office with a national debt of less than $6 trillion--$6 trillion--and in just a 6-year period of time, it is almost $9 trillion, almost a 50-percent increase in America's mortgage, America's national debt in the short 6-year period of time.
During this period, all but for a few months, the President has had a Congress of his own political party. The Republicans have controlled the House and the Senate, and the President has yet to veto the first spending bill in the time he has served as President. Not once has he said ``no'' to a spending bill that has come from Congress, particularly from his Republican Congress, and in the meantime his tax policies and spending policies have driven us into the highest level of national debt in the history of the United States. Our indebtedness is held by mortgagers such as China and Japan who expect in return to have a piece of the American economy.
Secretary of Treasury Paulson will, I am sure, understand this, that as we become more indebted to these foreign nations, it is no wonder they take a claim on our economy. Why did we have to debate a Dubai Ports deal?
Because Dubai happened to hold enough American dollars to have clout in our economy, and that is the reality.
As these foreign entities become more powerful in our economy, sucking good-paying jobs out of the United States, it is a serious challenge for any new Secretary of the Treasury.
The President has called for more tax cuts, which means deeper deficits, more debt. It is estimated now that the indebtedness of the United States is a burden on every single man, woman, and child in America to the tune of $30,000 and growing. So in addition to a home mortgage and a student loan, we are unfortunately the victims of policies in Washington that increase the indebtedness of future generations.
This has to stop. This is a disaster in the making. We have to balance the books and do it quickly. I hope Mr. Paulson has the vision and the strength to convey that message effectively within this administration.
I hope he will take a very close look at our trade policies as well. My colleague, Senator Schumer, will speak after I finish. He has been one of the leaders in the Senate talking about the inequities in our trade policy with China.
I believe globalization is as inevitable as gravity. We know we are in a shrinking planet. We do more business with one another than ever before. But when we enter into trade agreements with countries such as China, we say we are establishing rules of conduct, fair trade. Unfortunately, particularly in the case of China, many countries ignore those rules. They violate those rules.
The Secretary of the Treasury has to be a strong voice to stand up for the American economy, American businesses, and American workers to demand that the countries with which we trade play by the rules. I think free trade is good for the future of our world, certainly good for the future of America. We are a land of opportunity. We have risen to every challenge, but we need to be involved in a fair fight where both sides play by the rules.
The Bush administration has not fought hard enough for these trade agreements and understandings. When we create a trade agreement, we need to ensure that there are proper labor protections in place. We are about to consider a trade agreement with Oman, a very small country in the Middle East. There are good reasons for us to enter into that trade agreement. But when Members of the Senate suggested to the Bush administration that we put a prohibition in the trade agreement with Oman that they could not use slave labor--slave labor--to produce goods and services sold to the United States, the administration said: No, we are going to remove that, we don't think we should go that far.
Slave labor? We should have basic understandings of what the labor standards will be. We know many countries will underbid us when it comes to the cost of labor, but there ought to be fundamental standards.
The same is true when it comes to environmental protections. U.S. businesses operate under laws which restrict them in terms of their conduct, whether it is a burden or some sort of a problem with our environment, whether it is water pollution or air pollution or similar things. What we should insist on for the good of this planet we call home is that the countries engaged in trade with the United States also have respect for the environment of the world. Whether it is global warming or toxic release, we are literally all in this together.
After we create these good trade agreements, the Secretary of the Treasury has to make sure there is proper enforcement so we don't just give our speeches on the Senate floor and then ignore the trade agreement afterward.
I hope Mr. Paulson will fight harder than his predecessors to promote trade that is aggressive and fair. I also hope he will push for a tougher and more proactive stance when it comes to China. I am sure my colleague will speak to that further.
He has traveled to China more than 70 times. He understands the importance of this critical relationship with this growing giant in the world economy. When we spoke in my office, I asked him specifically to deal with currency manipulation, intellectual property rights infringement, and trade violations.
He also has to be very strong when it comes to China's labor records and their record on the environment and human rights. While he did not have any specific suggestions--I didn't expect them--I believe he was responsive, he understands the challenge, and I think he can rise to that challenge. That is why I am supporting his nomination.
Finally, I hope Mr. Paulson's sensibility about the environment will become a source of real leadership in this administration. I know Mr. Paulson reiterated at his confirmation hearing that he is not running to be head of the EPA or Interior but Secretary of the Treasury. Still, Henry Paulson is a former chairman of the board of the Nature Conservancy. That is a group with which I have worked in Illinois that has great respect for our natural resources and has done a lot to reclaim them for future generations.
I hope he can push the Bush administration to take a forward look at the issue of global warming. This is an issue which is real, and this administration must start immediately working with Congress to move on international agreements that deal with global warming. Mr. Paulson's voice at the Cabinet table could make a difference, and I am hoping that his deeply held personal beliefs will lead him to be that voice.
I support the nomination of Hank Paulson to become Secretary of the Treasury. I think he will work as hard for farmers in the heartland as he does for bankers in New York. I look forward to working with him to strengthen America's economy and put the Federal Government's finances back in order.
Mr. President, I yield the floor.