House Energy and Commerce Committee - The State of U.S. Industry - Part 1
Federal News Service March 24, 2004 Wednesday
HEADLINE: HEARING OF THE HOUSE ENERGY AND COMMERCE COMMITTEE
SUBJECT: THE STATE OF U.S. INDUSTRY
CHAIRED BY: REPRESENTATIVE JOE BARTON (R-TX)
WITNESSES: DONALD EVANS, SECRETARY, DEPARTMENT OF COMMERCE
LOCATION: 2123 RAYBURN HOUSE OFFICE BUILDING, WASHINGTON, D.C.
BODY:
REP. JOE BARTON (R-TX): The committee will come to order. It's my pleasure today to welcome the secretary of Commerce of the United States, the Honorable Don Evans. Before I formally introduce him, I have a personal privilege announcement. Our former chairman, Chairman Billy Tauzin, did have surgery last week. He is still in the hospital. The surgery went extremely well. He is expected home some time this week. The staff and his wife had asked that he not have visitors yet, but he is expected later in the week to be able to have visitors.
I'd also like to announce that because we do have the secretary of Commerce today, I am going to ask that other than the chairman and the ranking member of the full committee, that we try to limit our opening statements so that we can have as much time as possible for the secretary to make his statement and to answer questions. There's 57 members of the committee and if everyone takes their full three minutes, we're going to have two hours of opening statements. Those who don't take an opening statement do get an additional three minutes in the question time. So I wanted to make that announcement.
Secretary Evans is the cabinet secretary that's charged with promoting trade and industry for the United States companies and workers. The department that he chairs has the responsibility for a vast array of federal programs, including those relating to telecommunications technology, economic statistics, trade promotion, weather and oceanographic services. With the exception of oceanographic services and the weather, this committee has jurisdiction over all the programs at the Department of Commerce.
As you all know, I think it's useful for us to bring the cabinet secretaries of the agencies under our jurisdiction before the full committee. Last week we had the secretary of Health and Human Services, the Honorable Mr. Thompson. In the next two weeks we're going to have the secretary of Energy, the Honorable Spencer Abraham. So having the secretary of Commerce here today is the second of those cabinet secretaries. We think that this is the first time a secretary of Commerce has appeared before this committee and maybe any committee in the House in the last eight years. We're trying to confirm that. But Don Evans is not a gentleman who likes the-who seeks the spotlight and the limelight, so we're honored that he agreed to our invitation today.
We all know that our economy has had some rough spots in the last several years. The terrorist attacks on September 11, 2001, sent an economic shock through our nation that we're still recovering from. Secretary Evans has taken that task as secretary of Commerce seriously to try to help the economy rebound, and he's going to give us some statistics today and some facts and figures and his opinions as to why we think that we are now rebounding.
The third quarter of 2003 our economy grew at an astonishing rate of over 8 percent, 8.2 percent. That's the strongest economic growth rate in over 20 years. That economic growth has shown that our economy is continuing to grow. In fact, our economic growth rate has outstripped all of the industrialized countries.
We have inflation now at historically low levels, and home ownership in the United States is at the highest level it's ever been. Americans are living longer and they're living healthier. This committee can take pride in the fact that we've just passed a component of that, the Medicare Reform Act that we're now in the process of implementing and that the secretary of Health and Human Services talked about several weeks ago.
Secretary Evans and this committee is committed to a job growth economy for America. He will report in his testimony that a quarter of a million new jobs have been created in the past five months alone, that American employment rates are substantially higher than our Western trading partners, that February unemployment rate in this country at 5.6 percent is below its 30 year average and is still trending downward, and of course we all hope that it continues to trend downward. Still more job growth and more employment is a key goal of the Congress, this committee and the administration.
We also have extremely high productivity growth rates. We had a productivity growth rate I think last year of over 4 percent, which is simply amazing because the historical average in the post World War II period has been somewhere between 1 and 2 percent. The Department of Commerce has recently released a report entitled "Manufacturing In America." In that report the secretary makes a number of recommendations that would, if implemented, promote even more growth in employment for the U.S. economy, particularly in the manufacturing sector.
I'm sure the secretary is going to talk about that in his prepared remarks. It also points out that we need to pass the conference report in the Senate that this committee did such good work on. It would be helpful if we would get the Senate to pass the Tort Reform Act that, again, has passed the House of Representatives, and it would be very helpful if we could find a way to control some of our health costs that have gone up in the last several years.
This committee, Mr. Secretary, is working hard to achieve the goals that I've just outlined. I know that you share those goals because you and I have talked about it, and we look forward to your testimony.
Finally, I want to inform the committee that Secretary Evans is here until approximately 12:30, so we want to take every opportunity to give him a chance to have interaction with the committee. So with that, I would like to recognize the ranking member of the committee and the former chairman of this committee and one of the most distinguished members of the House of Representatives, the Honorable John Dingell of Michigan, for an opening statement.
REP. JOHN D. DINGELL (D-MI): Mr. Chairman, I thank you. And I thank you for holding the hearing.
Mr. Secretary, welcome. You're a distinguished public servant and a friend and I'm delighted to see you here before us. We have a difficult problem in this country with regard to making the economy grow, and I believe the discussion that we will have today will be helpful in that and that your comments to the committee will be of value to us in this matter.
Since January of 2001 my state of Michigan has lost over 128,000 manufacturing jobs. That's a staggering number, but it's just a portion of the 2.8 million manufacturing jobs that have been lost across this country. This is a serious matter because people are told that there is a recovery going on, but nobody seems to be going back to work. Unfortunately, we are not addressing these matters. We're having a debate about esoteric trade theories from years gone by. And it is regretful that the statistics that have been coming out of the administration have not reflected the facts, nor have they been properly predictive of the events which would follow.
It is also an unfortunate event that the administration has not really shown that it appears to be concerned with the needs of the nation at this particular time. We hear from the chairman of the Council of Economic Advisors that exporting jobs, or outsourcing, is a normal part of process. We hear that the administration is proposing to change a situation where manufacturing will now include turning hamburgers in McDonalds and Wendy's.
We are talking now, oft times nationally, about outsourcing. That's one of the first questions. But that's really just exporting jobs. It used to be only that manufacturing jobs were at risk; now it's white collar. And we note that accounting and other jobs of this kind, including government jobs-for example from the Tennessee Valley Authority, which is now suggesting that they intend to do this-is at hand. This is an outrageous situation.
Second, small and midsize manufacturers, who are an essential and integral part of the American economy, need to have the assistance that they have to have to compete on the world stage. Most of these are businesses that contribute to rural job production and are very important parts of the automobile manufacturing process. We should be manufacturing-rather, we should be expanding programs in the Department of Commerce such as the Manufacturing Extension Partnership and the Advanced Technology Program. But these programs have been cut continuously in the budget of this administration. A most regrettable thing.
Third, American businesses and American workers deserve a government that pursues not just a policy of free trade, but one which involves a policy of fair trade. In other words, our trading partners must be compelled to play by decent rules. Labor and working conditions must be brought up to intelligent and reasonable standards. Environmental practices and laws must be made to work so that we do not degrade the environment around the world, but also so that the United States does not subsidize this behavior by allowing other countries to disregard important things which we do to see to it that the quality of life in the United States is proper and good.
The fourth point is the cost of healthcare is now out of control. Fourteen hundred dollars it is in the cost of an automobile; more than the value of steel. Nothing do I hear addressed by the administration to this matter.
Now, I think, Mr. Secretary-and I know that you're concerned about these matters-they deserve a frank and an honest discussion. I think that we have not really begun to focus on that, and I hope that this meeting this morning will begin to move us in the direction of achieving that kind of national purpose that meets our needs through an intelligent discussion. And I look forward to having a talk here with you on this, Mr. Secretary, and thank you again for your presence.
REP. BARTON: We thank the gentleman from Michigan for that opening statement. I want to encourage members again, now that Mr. Dingell and I have given an overview, to not ask-to not given an opening statement. But the rules do allow for it. I would ask if anybody on the Republican side at this time wishes to make an opening statement? All right. Does anybody on the Democrat side wish to make an opening statement? Okay, we'll go to Mr. Pallone. Mr. Pallone is recognized for three minutes.
REP. FRANK PALLONE, JR. (D-NJ): Thank you. Mr. Chairman, I want to thank the Commerce secretary for coming to the Hill today to address the state of our nation's economy. And I'm hoping that he'll be as honest with us as he was last month when he refused to support his own administration's lofty job creation numbers. After seeing the job creation numbers for February, and I mean the 21,000 jobs, I'm hoping that finally today we can discuss economic policies that will finally create American jobs.
If we can take anything from the February job numbers, it's that the economic policies of President Bush and the Republican Congress still are not creating jobs. The president continues to say that the best way to create more jobs in the upcoming months is for Congress to make permanent all the tax cuts; tax cuts that overwhelmingly benefit our nation's wealthiest Americans. But when is the president going to learn? Congressional Republicans cut taxes year after year, and the jobs they predicted would be created have never become a reality.
Last year when the president was touting another round of tax cuts benefiting our nation's wealthiest elite, the White House predicted the cuts would create more than 2.1 million new jobs in the seven months after its passage. But what actually happened during that period? Only 296,000 jobs were created, 1.8 million short of the president's predictions. Perhaps that's why Secretary Evans refused to endorse President Bush's own economic report of the president in which the administration predicted that 2.6 million jobs would be created this year. And I'd be interested to hear from your administration the latest estimates.
One of the major reasons for the current jobs recession is the increased exporting of high paying white and blue collar jobs overseas. Consider several examples from the township of Edison in my congressional district. Last month the Ford plant closed, leaving more than 900 New Jersey employees without jobs. Last year the Frigidaire air conditioning plant closed its Edison plant and shifted production to Brazil, leaving 1,600 unemployed. Mr. Secretary, I would think you'd be concerned, and I'm sure you are, about shipping these New Jersey jobs overseas.
Last month, however, we learned that the Bush administration views the movement of American factory jobs and white collar work to other countries as a positive transformation that will in the end enrich our economy. No wonder the president thinks our nation's economic forecast is rosy. He isn't concerned about creating jobs here in the U.S. as long as the economy continues to grow. And if that can happen best by sending more jobs overseas, that's fine with him. It's time the Bush administration realized that shipping overseas and cutting taxes for the wealthiest elite in our country will not create jobs.
President Bush and congressional Republicans have had three years to turn this jobs recession around. They have completely failed, and I'm just hopeful that today we'll finally hear a change of course from the Bush administration. Although I have to say, Mr. Chairman, I'm certainly not holding my breath. Thank you, Mr. Chairman.
REP. BARTON: Thank you.
Mr. Strickland, you wish to make an opening statement?
REP. TED STRICKLAND (D-OH): Yes. Thank you, Mr. Chairman.
REP. BARTON: Wait a minute, I think Mr. Brown too-he's ahead of you, he's senior. The gentleman from Ohio is recognized.
REP. STRICKLAND: I'll defer to my Ohio colleague.
REP. BARTON: Yeah, Mr. Brown of Ohio is recognized for three minutes.
REP. SHERROD BROWN (D-OH): I thank you, Mr. Chairman. Thank you for having this hearing.
Secretary Evans, thank you for being here. We know the numbers: one in six manufacturing jobs in my state has been lost since President Bush took office; 168,000 manufacturing jobs in my state have been lost; 300,000 Ohioans are unemployed today. That's 2,000 people have lost their jobs every week of the Bush administration; 260 people have lost their jobs every day since George Bush took office in Ohio alone.
What puzzles Ohioans, that the Bush administration actually seems to be hurting not helping American manufacturing and working Americans, in large part because the president's answer to every bad case and bad piece of economic news is the same: more tax cuts for the wealthiest Americans with the hope that some of those benefits will trickle down and create jobs and help someone else, and more trade agreements that hemorrhage jobs, that ship jobs overseas. I would hope today, Mr. Secretary, that we could hear from you some words of support for the Crane-Rangel bill legislation that actually rewards American manufacturing for keeping-American manufacturers for keeping their jobs in this state. So many Republican members have cosponsored this bill. It's the White House and Republican leadership that have refused to allow the Crane-Rangel bill to come to the House floor.
I got a letter yesterday from a man named David Grombose (ph) who lost his steel industry job midway through the Bush administration. He's had decades of factory experience, skills that include a degree in computer management. He's been out of work for a year-and-a-half.
He's long since exhausted his unemployment benefits. He writes, quote, "It isn't easy on the unemployment line. Hope is waning and despair is close to setting in. I've almost given up. But that's not my nature. I've worked hard all my life. I started at age 13 delivering newspapers at 4:00 am. I really don't know what to do next."
Mr. Chairman, I have a stack of letters from others in my district saying essentially the same thing: frustrated that they can't find jobs, angry that their unemployment benefits have not been extended. Some 900,000 Americans are in that position. I would like to ask unanimous consent, Mr. Chairman, to enter these into the record if I could.
REP. BARTON: Excuse me just a sec. Excuse me, could you repeat --
REP. BROWN: I would like to ask unanimous consent to enter these letters into the record, Mr. Chairman.
REP. BARTON: Do we know what-have the majority staff seen the letters?
REP. BROWN: I don't know if-they're simply --
REP. BARTON: Will you let us look at them? I'm sure that during the hearing we will.
REP. BROWN: Okay, I appreciate that. Mr. Chair, Mr. Grombose and the 2.8 million other Americans like him deserve better from this administration, from this Congress. But we'd better hurry up. During the time I've been talking, three more American manufacturing jobs have disappeared. I yield back my time.
REP. BARTON: The gentleman from Florida, Mr. Stearns, one of our distinguished subcommittee chairmen, wishes to make a three opening statement.
REP. CLIFF STEARNS (R-FL): Thank you, Mr. Chairman. I won't be long, and I just obviously ask unanimous consent that my entire statement be part of the record. But I want --
REP. BARTON: Without objection, so ordered.
REP. STEARNS: I want to welcome the secretary. But I would like to raise one point with the administration. I'm concerned about the privacy implications of outsourcing. Jobs involving access to sensitive information are being outsourced, including financial services, medical examinations and tax preparation.
I'm concerned that sensitive financial, medical and other personal information will not receive the same type of protection that it does when work with the information is done in the United States. I understand the companies are subject to the same U.S. privacy laws whether they are processing the information in the U.S. or in India, but I want to know that the administration are doing all they can to ensure the privacy and security of that information. And I hope, Mr. Secretary, perhaps you'll address that.
Thank you, Mr. Chairman.
REP. BARTON: We thank the gentleman. We want to point out that members that don't make opening statements do get an additional three minutes in the questioning. I just thought I'd mention that again. The gentleman from Michigan, Mr. Stupak, is recognized I assume for a three minute opening statement.
REP. BART STUPAK (D-MI): No, Mr. Chairman, I'll waive my three minutes. I just want to make sure that our opening statements will be made part of the record?
REP. BARTON: All opening statements will be made part of the record.
REP. STUPAK: Then I'll waive my three minutes.
REP. BARTON: Well bless you. That's a good example.
Mr. Green, are you going to waive your opening statement?
REP. GENE GREEN (D-TX): No, Mr. Chairman. I appreciate our secretary --
(Cross talk.)
REP. GREEN: -- three hours or two-and-a-half hours, but-and, again, I want to thank the chairman and our ranking member for holding this-I think the most important hearing we've had this year on the state of U.S. industry. And, again, I join my fellow Texan the chairman in welcoming a neighbor, even though it's from Midland-and Houston is kind of close in Texas terms-Secretary Evans testify.
Mr. Secretary, since this administration came to town in our state of Texas we've lost 175,000 manufacturing jobs. In fact, in Texas we've lost more manufacturing jobs than any other state, with the exception of California. And since 2000 our country as a whole-and, again, I see different numbers, but the one I think is common is that we've lost 2.8 million manufacturing jobs. During a time of economic recovery we shouldn't forget that manufacturing jobs are traditionally the engines of our economic growth in our country.
Furthermore, these highly skilled, good paying jobs have been the backbone of a strong middle class that's been the foundation of opportunity in our country, and to me this is where the issue of outsourcing comes in. And the economic term may be outsourcing and the practice may be utilized to help a company's bottom line by decreasing labor costs, but the end of the day outsourcing is the willful exporting of jobs. If we continue to export those manufacturing jobs, there's a very real possibility that our country's labor market will be made up of highly paid executives and low wage earners in service sector jobs, with no middle class in between. And if there are doubts about the possibility, one only has to flick through the recently released economic report of the president, to which a chief economist advisor suggested that making hamburgers in a fast food restaurant constituted manufacturing.
We've learned the hard way that manufacturing jobs aren't the only ones being exported. Many high tech and service sector jobs are also leaving our country. And I represent a district that's been losing manufacturing jobs for decades. Our district in Texas is the third most blue collar district in the country and the fifth youngest in the country, according to the 2000 Census. And I've long encouraged my younger constituents, and even my older ones, to retrain for the high tech skills.
And yet now even the high tech service sector jobs are being exported. In fact, 3.3 million are scheduled to leave the country within the next 15 years. How do we as a nation keep our high standard of living when we're not only exporting manufacturing jobs, but now highly skilled information related jobs to the lowest wage countries with an adequately skilled labor market?
Yesterday's Wall Street Journal highlighted some of the professions that will be exported in other countries: accountants, tax professionals, technical writers, architects, legal, investment researchers and insurance claims processing. What are we supposed to tell our constituents who have been retrained for these high tech jobs, only to find those jobs too are being exported? We can't expect them all to go into manufacturing hamburgers.
Mr. Chairman, the arguments coming from our administration are troubling. It's unconscionable that the president's top economic advisors would call exporting American jobs just a new way of doing international trade, and that's probably a plus for the economy in the long run. And again, being a business school major from the University of Houston, I understand economics professors, that oftentimes they don't live in the real world.
REP. BARTON: The gentleman's time has expired.
REP. GREEN: Well, thank you, Mr. Chairman. I'd like my full statement to be placed into the record.
REP. BARTON: Without objection, so ordered.
Does the gentlelady from Missouri wish to make an opening statement? Ms. McCarthy?
REP. KAREN McCARTHY (D-MI): No, sir.
REP. BARTON: Okay. The gentleman from Ohio then is recognized for three minutes.
REP. STRICKLAND: Thank you, Mr. Chairman.
Mr. Secretary, I come from Ohio, a state that's lost 168,000 manufacturing jobs in the last three years. Mr. Secretary, I've read your testimony. You say that clearly the president is taking the country in the right direction. However, data from the Bureau of Labor Statistics show the president is headed toward the worst job growth in 58 years. In fact, he will be the only president since Herbert Hoover to have a net job loss during his term.
You say in your testimony that our companies and workers see international trade as a simple question of fairness. But I went to Mexico recently, Mr. Secretary, and I ask is it fair to encourage a race to the bottom? Is it fair to exploit foreign workers who make only $38 a week? You say we all know the rising healthcare costs are eroding competitiveness. But the administration had a chance during the Medicare bill to support the reasonable re-importation of cheaper drugs from Canada and to allow the secretary to negotiate lower prices for drugs, and they resisted those efforts.
You say that we're preparing-the next generation of America's leaders starts with the basics and that is why the passage of the No Child Left Behind bill was so important. But, Mr. Secretary, the Republican governor in Ohio and the Republican legislature commissioned a study and that study concluded that the No Child Left Behind bill is costing Ohio $1.4 billion per year as an unfunded mandate.
Mr. Secretary, you say the decline of manufacturing employment and the rise of service employment are manifestations of structural change. But what do you say to the fact that we are exporting service jobs overseas? We all know that's happening. And I've introduced H.R. 3816, the Call Center Consumer's Right To Know Act. And simply this bill would just simply require call center staff to disclose their physical location at the beginning of each call, so the American consumer would be informed.
And while we're talking about service jobs, I'd like to share with you what happened to Mr. Kurt Tremain (ph), who is a constituent in my district. Mr. Tremain worked in the electrical industry in eastern Ohio. G.M. closed that, it went to Mexico. He was out of work. He went to work for U.S. Steel. The steel mill shut down. Then he went back to school and got a bachelors degree, got a high tech job in the computer industry and National City Bank has taken that job to India. What do we say to Mr. Tremain and others like him who are losing these jobs?
And then I close with this in the president's economic report, these words: "When a good or service is produced at lower cost in another country, it makes sense to import it rather than to produce it domestically." Mr. Secretary, I would like a list of the products that cannot be produced at lower cost in another country. I think that list would probably be rather short. I look forward to your testimony, sir.
REP. BARTON: The gentleman's time has expired.
Does the gentlelady from New Mexico wish to make an opening statement?
REP. HEATHER WILSON (R-NM): Thank you, Mr. Chairman, yes.
REP. BARTON: New Mexico.
REP. WILSON: Thank you, Mr. Chairman. I appreciate your having this hearing.
Mr. Secretary, thank you for being here. Despite some of the rhetoric from my colleagues on the other side of the aisle, the reality is that our economy is growing. Interest rates are low, inflation is low, the stock market has recovered, unemployment is below the 30 year average for unemployment in this country. We need to continue with economic policies that include low taxes, fair regulation, and America is the best in the world at providing a stable environment for companies to be able to invest and grow and produce wealth.
I think it's important, because we hear a lot about it these days, to talk a little bit about trade. Ninety-five percent of the people in this world are not American citizens. If Americans are going to survive, we need to be able to sell what we produce to those people who aren't privileged to have been born in America. And so a return to protectionism can't be the answer, so what is the answer? Well, first we've got to understand the challenge. In the last 10 years of human history, in the last 10 years, more people have joined the free enterprise in this world than at any other point in human history. That has a huge economic impact on the world that we live in.
Of all the jobs that were lost in the recession of 2000-2001 only one out of 100, one percent, were outsourced or offshore. At the same time, other foreign investors had the opportunity to invest in America. And when you build a Sennheiser plant in Albuquerque, New Mexico, or Heel Inc. from Germany comes and sets up a new operation in Albuquerque, New Mexico, that capital brings jobs here in America and 16 million Americans owe their jobs to international trade.
The real challenge in our economy is actually productivity, which is a good thing in general although hard to deal with if you're one sitting without a job. Productivity growth has moved from manufacturing to service productivity growth. And anybody who has checked in at an airport recently or gone through Home Depot and checked out their own stuff at the front of the store knows what productivity is all about.
UPS used to have 70 service centers. In those service centers they had clerks who filled in timesheets every week for every UPS employee around America. Now that clipboard that a UPS guy carries punches in his time, and when he plugs it in to the dashboard of his truck, it automatically reports his time and all those people filling out timesheets are now doing another job.
So the real issue in our economy is how do we take advantage --
REP. BARTON: The gentlelady's time has expired.
REP. WILSON: Thank you, Mr. Chairman.
REP. BARTON: Finish the statement, though.
REP. WILSON: The real challenge for our economy is how we take the productive American workforce and train them for the next highly productive well paid job. And that's the challenge I look forward to your testimony on, sir.
REP. BARTON: The gentlelady's time has expired.
The gentlelady from Colorado? Thank you.
The distinguished gentleman from Pennsylvania wishes to make an opening statement. (Laughs.) I called you-you're gentle and distinguished. He's just distinguished.
REP. MICHAEL F. DOYLE (D-PA): Mr. Chairman, I ask unanimous consent to submit my full statement for the record, along with a report on manufacturing in Pennsylvania recently completed and issued by the Pennsylvanian Industrial Resource Center at --
REP. BARTON: Without objection, so ordered.
REP. DOYLE: -- the Pennsylvania Foundation.
REP. BARTON: And we will also-we've looked at Mr. Brown's documents and they will also be put in --
REP. DOYLE: Chairman, my clock is ticking here.
REP. BARTON: I'll restart it.
REP. DOYLE: Thank you. Mr. Chairman, I want to thank you for holding this hearing today.
REP. BARTON: (Inaudible.)
REP. DOYLE: I want to thank you for holding this hearing today because there are few issues of greater importance not only to my district, but to the country as a whole. And I want to also thank Secretary Evans for appearing before us today.
And I hope, Mr. Secretary, that you will be able to take the concerns and sentiments that I suspect will be expressed here back to the administration and the White House, in the hope that some changes can be made. And rest assured change is what we need because our economy is floundering, especially when you look at the job losses and lack of new job creation. I represent Pittsburgh and the surrounding metro area in the heart of western Pennsylvania, where manufacturing and hard work have been the hallmark of generations. And based on the amount of visits that the president and the secretary have made to my district since the administration began, it would seem as though they were really committed to the residents in the area I represent.
Yet, since January of 2001 when President Bush took office, Pennsylvania has lost 154,700 manufacturing jobs. And I would say to my friend from New Mexico, that's not rhetoric. That's people that can't put bread on their table any more. An additional 287,600 people unemployed in my state. This suggests very strongly to me and a great many of my constituents that regardless of what the travel schedule of the Bush administration has been, this administration has been bad for the economy and terrible for jobs.
And yet I'm not sure what the administration plans to do to address these issues. As near as I can figure, the basis of the entire Bush economic agenda is to make these excessive tax cuts permanent and expand free trade agreements. Well, they made a lot of promises about how many jobs would be created by their tax cuts and how many more will occur if we just make these tax cuts permanent.
But I want to mention 154,700 manufacturing jobs have been lost in my state since this tax cutting frenzy began. And as far as calling for more and expanded free trade, it may be free but it certainly doesn't seem to be fair if it's leading to more and more outsourcing of our jobs in manufacturing and many other areas. And some people in this administration have actually said this is a positive development.
Well, when I consider these issues I also find myself thinking about what has been a success story. What have we done to improve employment in manufacturing? And the first thing that comes to mind is the Manufacturing Extension Partnership. In Pittsburgh the MEP has been tremendously successful. It helped create 164 businesses and generate $90 million in sales alone and keep or create 400 jobs in 2001. Yet, the Bush administration in the middle of this massive manufacturing jobs crisis has proposed a budget that would slash funding to the MEP to just 33 percent of last year's level.
So for these reasons and others, I find myself wondering just what does this Bush administration really have in mind when it considers the status of our manufacturing base? I'm hoping Secretary Evans can shine some light on just what the agenda is when it comes to creating jobs and restoring that commitment to our manufacturing --
REP. BARTON: The gentleman's time has expired.
REP. STUPAK: -- (cross talk) -- Mr. Chairman, I really have to wonder.
REP. BARTON: I thank the gentleman.
Does the gentleman from Indiana wish to make an opening statement?
REP. STEVE BUYER (R-IN): I'd like to make a unanimous consent request.
REP. BARTON: The gentleman is recognized.
REP. BUYER: I would ask unanimous consent that members of the committee submit their opening statements for the record and for those of whom do not give a statement be added their time, in accordance to the rules of the committee. And the reason I ask the unanimous consent request is the secretary is here on limited time and it would be --
(Cross talk.)
REP. : Would the gentleman withdraw that request?
REP. DINGELL: Objection.
REP. BARTON: The gentleman from Michigan is reserving the right to object. The gentleman is recognized.
REP. DINGELL: I believe that the gentleman is seeking the unanimous consent that all members will waive their opening statements. My concern here is that -- (a) this is a precedent which troubles me, and (b) I'm not sure how members on both sides of the aisle might feel about this matter. I would be content to let the members comment on this if they wish me to yield. And I also would say, as long as this does not constituent a question, that I'm willing to consider the matter further.
REP. BARTON: Would the gentleman yield?
REP. DINGELL: I'd yield to my good friend.
REP. BARTON: If the gentleman from Indiana insists on his unanimous consent request, I'm going to object to it. I have already asked members to defer, but under the rules every members has a right to given an opening statement. Some have used that right. Some have deferred, and which they'll get an additional three minutes. So we're going to have openness and civility and democracy and we do hope that we do get to the secretary at some point in time this morning so he can make an opening statement himself and then take some questions. I'm sure in the question period we're going to have a very good debate about many of the things that Mr. Doyle and Mr. Strickland and Mr. Brown and Mr. Pallone and Ms. Wilson and --
REP. DINGELL: I think the chair has made a good point and, with respect to my good friend from Indiana, I do object.
REP. BARTON: Before the gentleman-would the gentleman withhold his objection just a second? Or is that parliamentary-possible?
REP. DINGELL: I didn't hear that?
REP. BARTON: I said can you withhold your objection to give him a chance to withdraw his --
REP. DINGELL: I will withhold, certainly.
REP. BARTON: I don't want to waste any more time even debating this. I just want to get on with the --
REP. BUYER: I withdraw the unanimous consent --
REP. BARTON: The gentleman withdraws his --
REP. BUYER: I'm anxious to hear from the secretary.
REP. BARTON: Let's see. Now, where were we? Mr. Doyle had given an opening statement. Is there a member of the majority that wishes to make an opening statement? Seeing none, the chair would recognize Mr. Allen for what purpose?
REP. THOMAS H. ALLEN (D-ME): To make an opening statement.
REP. BARTON: The gentleman is recognized for three minutes.
REP. ALLEN: I thank the chairman.
And I would only comment when you get down to my level, Mr. Secretary, the possibility exists we might not be able to speak to you at all, just because of time constraints.
But thank you for being here.
When the history of the Bush administration is written, I tend to think it will be characterized as having been motivated by three grand obsessions: Iraq, nuclear defense and tax cuts for the wealthiest among us. I believe that two qualities of obsessions is that those who hold them become impervious to evidence that challenges received opinion and, second, that it prevents us from focusing on emerging challenges. The loss of manufacturing jobs in this country is a rapidly growing challenge, and in my view the administration has no plan that is adequate to the seriousness of the problem.
My home state of Maine has lost more manufacturing jobs per capita, I believe, than any other state in the country since the president took office. But as I said, there seems to be no plan adequate to the seriousness of that problem. In Maine we live next to Canada and our small businesses know all too well that sawmills in Canada, to take one example, don't have to pay for their healthcare and they don't have to pay for their workers comp. But all across this country healthcare premiums are rising at a rate that is driving our small business men and women out of business. They simply can't compete.
And yet, once again, this administration has no plan adequate to the seriousness of this healthcare problem that will address what we're looking at. Instead, this administration has proposed a budget that reduces funds for job training, reduces funds for vocational education, cuts SBA programs, eliminates the MicroLoan Program, a small program but it meant a lot to Maine, and as my friend from Pennsylvania said, reduces the Manufacturing Extension Partnership program from $110 million to $39 million.
Mr. Secretary, unless we get away from this obsession with tax cuts for the wealthiest Americans, we cannot devote ourselves to the real business of figuring out how to help this sector of our economy that is bleeding jobs not just overseas but here as well. And particularly, how we deal with those people who no longer have a job and therefore have lost their healthcare and lost their other benefits when their job goes. The hard, cold truth is losing a job in this country is much harder, has much more severe consequences than losing a job in the rest of the developed world, and I believe this administration needs to deal with that particular problem. But thank you for being here.
REP. BARTON: The gentleman yields back the balance of his time. Does any other member on the minority side --
REP. CHRISTOPHER COX (R-CA): Mr. Chairman.
REP. BARTON: -- wish to make a statement? Oh, Mr. Cox, do you wish to make an opening statement?
REP. COX: I do. Mr. Chairman, I just want to --
REP. BARTON: The gentleman is recognized for three minutes.
REP. COX: -- welcome the secretary and respond, because the secretary isn't being given the opportunity yet, to some of what we're listening to. I think it's important to recognize first we have before us the secretary of Commerce, not the secretary of Treasury. But if people want to raise tax policy, then I think we need to point out that instead of incessantly repeating this mantra about tax cuts for the wealthiest Americans, we ought to acknowledge that that's intentionally misleading because the president cut taxes and the Congress cut taxes-tax growth, I should say.
Revenues to the government are way up because of the economic growth it spurred. Cut tax revenues for everybody. And we cut them disproportionately for the lowest bracket. Over half of the tax benefit goes to the bottom 10 percent bracket, so disproportionate tax increases for the least wealthy taxpayers in America. And the Tax Code is more progressive. It's less flat and more progressive than it used to be as a result of those taxes, and it's creating economic growth. People need to be reminded that we had a recession and that recession is behind us and we're creating jobs. And the tax rate changes either caused that improvement in the economy, or certainly didn't stand in the way of it. But there is no reason to complain about that.
I think it's also important to point out when we're talking about jobs that our economy is creating jobs. We don't have the secretary of Labor before us, we have the secretary of Commerce. But if people want to talk about job statistics, we need to focus on the fact that the unemployment rate, which by any standard is remarkably low in America right now, is lower than it was during the 1990s when everybody's favorite person Bill Clinton was in charge. It's lower now. The unemployment rate is lower and more people work in America right now than at any time in our nation's history. So add it up, do the math. There are more Americans at work today, more jobs in America today than at any time in our nation's history, in terms of the total number of jobs. And as a percentage of the total workforce, the unemployment rate is lower right now than it was during the 1990s. So what part of this math don't people understand?
Now, obviously you look around the country and it's not the same everywhere, and that's why we're working on policies that create growth, and that's why I want to compliment the secretary for some of what I know we're going to hear from him today. Thank you for your leadership in helping create certainty in our economy so that the tax rate changes that we made are permanent and people can plan and create jobs. Jobs are not created in an environment of uncertainty and raising taxes.
But I think this abundant concern that people have for the pocketbook of the government and the lack of concern they have for taxpayers, particularly as we near April 15, is unbecoming. Thank you for your leadership on regulatory review and the costs of regulation that that imposes on job creation. Thanks for your leadership in helping lower healthcare costs. Thanks for helping modernize the U.S. legal system, which is driving jobs overseas.
REP. BARTON: The gentleman's time has expired.
REP. COX: Thank you very much for all of this. And I thank the chairman for letting me respond to some of --
REP. BARTON: We appreciate that.
And, Mr. Secretary, before I introduce the next person for an opening statement, you need to know that Mr. Markey is noted for his opening statements. He normally gives a very serious, with a real educational message, but he doesn't consider it a crime that they also be entertaining and amusing. Now, I'm going to put him on the spot and make a prediction that if anything gets on the 6:00 news tonight in the opening statements, it's going to be from the next opening statement, Mr. Markey.
So with that, for three minutes the Honorable Ed Markey of Massachusetts.
REP. EDWARD J. MARKEY (D-MA): Thank you, Mr. Chairman. I could actually sing you my song that I sang on St. Patrick's Day in Boston, but at this point I'll spare you.
The point, for my friend from Indiana, Mr. Buyer, just so you understand how we view it on this side, this will be the only appearance of the secretary of Commerce in his four years as secretary of Commerce before the Commerce Committee. And so since he's only going to be testifying from 20 past 10:00 in the morning until 12:30, you can imagine out of --
REP. BARTON: Hopefully he'll get to testify.
REP. MARKEY: Well, I appreciate that. But out of four years to give us two hours and 10 minutes on the committee of jurisdiction over the Commerce Committee is something that, you know, it does kind of test the patience of our side because there are so many questions that we feel he could be answering to us. So-and through us for the American people. So that's our perspective on it: that two hours and 10 minutes out of four years just isn't enough time. So we're very going to be respectful of the secretary here today, because he says he has more important things to do. But over the course of four years we do wish that we'll have then more time given to us.
Mr. Secretary, my home state of Massachusetts lost 9,500 jobs last month. Since 2001 we've lost a total of 200,000 and unemployed workers in Massachusetts now can expect to be out of work an average of five months, the longest average period of unemployment in 20 years.
Nationwide there are 8.2 million jobless Americans and three million fewer private sector jobs than there were just three years ago.
As many Americans try to make ends meet, the outsourcing of jobs overseas has received considerable attention. Less notable but also troubling is the growing practice of off-shoring American private medical and financial information to less developed countries such as India and Pakistan, where the information is process for U.S. based firms. These countries lack the privacy safeguards that are in place when records are processed in the United States, and U.S. privacy standards are not enforceable overseas. And off-shoring of information, as it increases, Americans are losing their jobs and their privacy in one fell swoop. When American companies send private information overseas they're telling consumers, check your privacy at the shore.
Last year a worker in Pakistan who was transcribing medical files for a California hospital threatened to post the confidential records on the Internet unless she received money that she claimed was owed her. She backed up the threat by attaching two patient files to an e- mail warning that she sent to hospital officials. The San Francisco Chronicle has reported that two of the three major credit reporting agencies, each holding detailed files on about 220 million U.S. consumers, are in the process of outsourcing sensitive operations abroad, and a third may follow suit. So while your credit card stays safely in your wallet, your credit reports travel the world racking up frequent flyer miles as you sleep.
I've requested from the Bush administration their policy on how we're going to protect privacy overseas. I have yet to receive an answer from the Bush administration on this issue. I don't think there's a more sensitive issue to all Americans, regardless of party, than what happens to their financial and medical records as they're shipped overseas into the hands of people that are not under U.S. law. And I think the American people deserve an answer to that question. I thank the chairman very much.
REP. BARTON: The gentleman's time has expired. Any other-the gentlelady from Illinois, Ms. Schakowsky, is recognized for three minutes.
REP. JANICE D. SCHAKOWSKY (D-IL): Thank you, Mr. Chairman. And I thank you --
REP. BARTON: The distinguished and gentle lady. I've gotten a bad habit of just saying "gentle" when I say the females, and I say "distinguished" for the males. So the distinguished --
REP. SCHAKOWSKY: You're taking my time, Mr. Chairman.
REP. BARTON: -- and gentle. I'm not going to count this against you.
REP. SCHAKOWSKY: (Laughs.) Thank you very much, Mr. Chairman-distinguished chairman.
And I thank you, Mr. Secretary, and I appreciate the opportunity to tell you that something you said yesterday really offended me and I wanted to just ask you about it. Economic isolationists, words that you used to characterize people who are very concerned about exporting jobs overseas. Economic isolationists are waving a surrender flag rather than an American flag. And I have been feeling for a long time that those individuals who disagree with policies of this administration-and you're entitled to your views and we're entitled to ours-are characterized often as unpatriotic, as-and now as waving a flag of surrender.
And I am offended by that on behalf of Janette (ph), someone in Illinois who lost her job when the McLeod USA Publishing exported 278 of its jobs to India. I don't think she is an economic isolationist. So what do you call hardworking Americans like Ralph who worked hard his whole life and lost his job when Premier Auto Finance closed its doors in the Bush economy, whose unemployment benefits are going to end soon since the Bush administration has refused to extend them, and who is faced with the daunting prospect of now losing his healthcare? I don't call him an isolationist. I call him a hardworking patriot.
Or what about the one out of six manufacturing jobs that has been lost in the state of Illinois during the Bush economy? A hundred and thirty-nine thousand just manufacturing jobs; a total number of 258,000 jobs. In January of 2004, Mr. Secretary, there were 25 percent more people unemployed in Illinois than in January of 2001.
These are hardworking Americans. These are patriots. These are people who are concerned about exporting our jobs overseas. These are not people waving a flag of surrender rather than an American flag. These are people who proudly salute our flag, whose children pledge to their flag every morning in school, and whose parents are out of work right now. I think it is so wrong to characterize people who embrace our country, our great nation, want full employment as somehow less than full Americans and that we're waving some sort of flag of surrender.
Your administration said that-the president said that in 2001 the tax cuts would create 800,000 more jobs by the end of 2002. In February the claim was that new tax cuts would create 510,000 new jobs in 2003, 891,000 new jobs in 2004. We've lost 2.3 million jobs. I think that this administration needs to be held accountable for the loss of 2.3 million jobs, a net loss rather-in the private sector, rather than talking about how the state of American industry is strong, or the resilience of the American economy when so many people are suffering right now. Patriotic Americans who are suffering, Mr. Secretary. I thank you.